A Guide to the Offer Letter Approval Process

With 63% of the recruiters facing a talent shortage today and the job market largely being candidate-driven, recruiting the perfect candidate is no less than a feat achieved for recruiters today. A standard recruitment process involves hiring managers receiving hundreds of applications for a single opening. 

These applications are screened, and suitable profiles are shortlisted. Next, the recruiters conduct tests and interviews, set up communication with the candidate, and conduct the due diligence and background checks before the right candidate is selected for the role. 

Also, the average hire time spans over a month and requires continuous efforts on the part of the recruiters to keep the candidates engaged and the experience enriching. Candidate engagement is crucial, especially during the time between the selection and the onboarding. 

Ghosting by candidates, or the act of bailing out before the hiring process concludes, is also becoming an increasing concern for recruiters. In 2020, 28% of job seekers who had been interviewed ‘ghosted’ recruiters owing to a counteroffer from another company or the hiring process taking too long to complete. 

Given the state of affairs, recruiters need to make the hiring process quicker and more convenient than ever to move the candidates efficiently through the recruitment funnel. For a streamlined hiring process post-selection, defining a standard procedure for getting through the offer letter approval process is necessary. 

An offer letter process involves the hiring managers informing the selected candidate about the selection, making the verbal offer, writing the official letter of employment, securing the acceptance, closing the offer, and the final onboarding. 

The offer letter process should not be rushed but navigated with care. Otherwise, an offer letter process going wrong can also result in legal repercussions and losing the candidate. This offer letter approval guide lays down significant benchmarks in the offer letter lifecycle and suggests ways to navigate them smoothly. 

What are the steps in the offer letter approval process?

For hiring managers and recruiters, hiring remains a competitive task, given only 4 to 6 candidates get interviewed for the job out of the 250 applications received on average. 

Consequently, when a candidate gets selected after a hiring process extending for 39 days, on average, recruiters can celebrate and look forward to setting up an offer letter approval process and ensuring the selected candidate signs the offer letter and stays in the loop until the Day 1 to onboard the candidate comes. 

Depending on the candidate, the job role, and the kind of business, the offer letter approval process may have different steps. However, we can divide the steps into three broad phases, namely:

1. The Pre-offer letter phase
2. The offer letter approval and negotiation phase
3. The post-offer letter phase up to onboarding

The Pre-offer letter phase 

#1 Communicate with the candidate

Communicating with the selected candidate before the verbal offer or the written offer letter can help navigate the time and formalities between the selection and the final signing of the letter. Communication at a personal level can help break the ice, bring in familiarity, and make the candidate more assured about the role they are about to undertake. 

For the hiring manager, such genuine conversations can help build the company image and lead to better offer letters and fewer negotiations and rejections until D-day arrives. The foundation for the upcoming employer-employee relationship is set even before your perfect candidate gets onboarded. 

To initiate such calls, decide a proper time and begin on a cheerful and congratulatory note. The call can also include questions regarding the joining date, salary expectations, and preferred perks and bonuses. 

Reciprocally, the hiring manager must share their budget for the role, the most recent compensation and the bonuses and benefits offered, and the advantages of the new role over the previous employment. 

As add-ons, managers can also seek the candidate’s views on work-life balance, the work culture, the motivation behind the application, etc. This information can be crucial in designing more competitive and personalized compensation and benefits packages for each new hire.    

The conversation should be authentic and engaging while simultaneously focused on deriving as much information as possible, including the candidate’s background checks, medical history, competitive advantage, and conducting due diligence, if any is required at that stage.   

#2 Present with a verbal job offer first 

A verbal offer before the actual offer letter serves the preliminary purpose of informing the candidate about the job offer, the roles, and responsibilities, compensation, benefits, perks, leave policy, and other related details. 

Once a recruiter knows the candidate is a perfect match for the job, they must consider extending a verbal offer and getting the candidate to commit to it verbally. Such an acceptance prior to the bona fide document can accelerate the job letter approval process substantially. 

Getting commitment on the verbal offer is also referred to as pre-close in the corporate jargon. Pre-closing candidates effectively increases the chances of final acceptance. 

The verbal offer call can begin with the manager excitedly informing the candidate about the formal offer and how they want to double-check the terms with the candidate. The details may include the job title, salary, benefits, and other concerns. At this stage, the candidate is free to ask queries and raise concerns. 

After solving the queries, the hiring manager can wrap up the call by asking if the candidate is ready to start. The verbal call can further recall to the manager the candidate’s needs, wants, and unvoiced concerns, conduct due diligence, and seek verbal commitment. 

The offer letter approval and negotiation phase

#3 Write the offer letter 

After the initial vetting and securing the verbal commitment, it’s time to ink down the terms and conditions and the official contract in the offer letter. An offer letter is, ideally, a written agreement or an official contract that binds the employer and the employee in the employment contract. 

The offer letter also contains the details regarding the employment – whether full-time, part-time, or internship offer letters. Offer letters are generally typed and sent via email to the selected candidate. 

A well-drafted offer letter contains the following details: 

• Recipient’s name and address, i.e., candidate 
• Hiring Manager’s name and address
• Date 
• Salutation
• Company name
• Job Title
• Type of role – Full-time, part-time, or internship 
• Salary
• Frequency of payment of salary and tax applicable, if any 
• Bonus 
• Benefits
• Commission structure 
• Stock options, if any 
• Terms and conditions
• Ending Note 
• Closing Salutation 
• Employment contract 

Here’s an example/sample of an offer letter for full-time employment. 

Dear [first name],

We are pleased to offer you a job as a [role title] at [company name]. We found your skills and experience would be valuable  for our company.

If case of acceptance of the offer letter, you will be eligible to the following as per the company policies:

1. Annual gross salary of $[total annual salary] paid in [monthly or semi-monthly] installments by check or direct deposit
2. Up to [percent]% of your annual annual gross salary will be given to you as a performance bonus
3. Standard benefits including:

• [vacation days number] days of annual paid time off
• [sick days number] days of sick leave
• Medical and dental insurance
• 401k/retirement plan
• Flexible working hours
• Tuition reimbursement for career development courses
• Childcare[more benefits]

Sign and date this letter as indicated below and email it back to us by [date] to accept this offer letter.

Your expected hire date will be the [date]. Your immediate supervisor will be [supervisor’s name].

We look forward to welcoming you to our team. Feel free to call [recruiter’s name]  in case of queries.

Sincerely,

[Sender Name]

Signatures:

_________________________________________

Company Representative (Sign)

_________________________________________

Company Representative (Name in Full)

_________________________________________

Date

_________________________________________

Applicant (Sign)

_________________________________________

Applicant (Name in Full)

_________________________________________

Date

While you can custom-build offer letters for each new hire, many websites provide downloadable templates that can be edited to add specific details related to the candidate and their employment type. These templates consist of pre-written exemption and non-exemption clauses, salary pay periods and benefits, the scope of work, terms of payment, etc.  

#4 Handle the negotiations 

Once the candidate receives the offer letter, the offer letter approval process can go smoothly and close with the candidate accepting the offer, or else, the hiring manager may receive a counteroffer from the candidate in response to the offer letter. 

The latter situation would require the recruiter to pull up their sleeve for a good round of negotiations with the candidate. The negotiations should be handled amicably for a great candidate experience. 

The manager must first look into what the candidate is trying to negotiate – is it the salary, work hours, or other expectations from the job? Once the manager understands what the counteroffer is all about, they should consult their internal teams to determine if the offer can be accepted with respect to the internal budget and other expectations from the team. 

If the offer seems acceptable, the hiring manager should move ahead with it. But if the manager wants to stand firm on the original offer, it can get tricky to handle the situation politely while keeping the candidate still assertive about the offer. 

The manager should acknowledge the candidate’s request before truthfully stating the reason why they cannot accept the counteroffer and would like to move ahead with the original offer only. The manager must restate the offer and affirm their enthusiasm about the candidate accepting the job offer and joining the company. 

An honest disposition, open mind, and friendly attitude in communication dealing with negotiation can leave a positive experience for the candidate. 

The post-offer letter phase up to onboarding

#5 Close the position 

Once the due diligence and background checks are complete and the candidate accepts the offer letter, the hiring manager should close the position. The manager should also make it a point to remove the job opening from the job portals where the opening was posted, the client’s website, and other places where it was posted. 

#6 Tackle rejection letters 

Rejected offers prove costly for a firm after the hiring manager has invested so much time and effort in screening and selecting the candidate. The hiring team would have to start all over again. 

There can be several reasons for a candidate to reject the offer despite the successful recruitment campaign and great candidate experience. The hiring manager should take the opportunity and look through the mistakes that might have led to the rejection or should take a break and start all over again. 

Instead of rejection of the offer letter by the candidate, there are also chances that the recruiter may have to rescind the offer letter due to unforeseen circumstances. In such cases, the situation must be handled delicately and communicated properly to the candidate.   

#7 Onboarding 

Once the candidate officially signs the offer letter and accepts the offer, recruiters can heave a sigh of relief and move from the offer letter phase to the onboarding and orientation process. The recruitment is finally complete, and hiring managers can move to fill in the next role or make preparations for Day 1 for the candidate. 

The hiring manager may also send the candidate a welcome letter in response to their acceptance. 

What happens after you receive an offer letter?

After receiving an offer, the candidate should carefully review the details in the offer including salary, benefits, start date, and other terms of employment. After reviewing the offer, candidates may want to negotiate any terms if needed or proceed to sign the document conveying offer acceptance. 

What is the process after the offer letter?

Following the offer letter stage, candidates finalize and sign the offer letter before sending it back to the employer. They may undergo additional background checks or pre-employment screenings as required. Following this, candidates will receive their onboarding schedules, which outline training sessions, orientation, and other necessary preparations.

Wrap-up

Good hiring doesn’t end with the selection process. Instead, the navigation from the selection to verbal commitment and negotiations on to the onboarding day marks the completion of the hiring process. Finding the right fit for a role is a long and tasking process involving several stages in the recruitment funnel. 

As such, recruiters should be masterful and committed to successfully getting the selected candidate through the offer letter process until the candidate starts working for the company. 

FAQs on Offer Letter Approval Process