Don't forget to review your job offer letter BEFORE you accept or reject the position.
Congratulations! After all the hard work polishing your resume and sweating through interviews, you are finally beginning to see the payoff. You have just received an offer letter — or maybe even more than one. It's time to breathe a sigh of relief and be done with the job search, right?
Unfortunately, the answer is, “Not yet.”
Instead, you must begin the work of carefully reviewing the offer, negotiating it, and making your ultimate choice: to accept or reject it. As you navigate these waters, here's our guide to help you understand the anatomy of the job offer letter, next steps to take, and mistakes to avoid.
9 elements of a job offer letter
Not every job offer letter will have each of these components, as some are specific to the position and the candidate's personal situation. For example, the relocation clause speaks specifically to those candidates planning to relocate for the job. Yet, overall, these are the main components you should be analyzing closely:
Job title and employment classification
This section spells out the official name of the position you are being offered, as well as whether it's a full-time, part-time, or contractor role. Make sure that the written offer matches your understanding of the position.
Is it negotiable? Probably not. In a smaller company, you may have some luck tinkering with the title, but in larger companies, the hierarchy is usually more rigid.
Job description, responsibilities, and reporting structure
This section should line up with the job description you reviewed before applying for the position. Scan it to double-check that there is nothing unexpected there, paying attention to travel expectations and work hours. The offer may also mention the name and the title of your immediate supervisor, which should look familiar from your interviews.
Is it negotiable? Parts of it may be. While it's unlikely that you can shift the listed responsibilities in a major way, it is OK to ask for tweaks like specific projects you would want to work on, the size of your sales territory, or the amount of business travel expected.
Virtually every candidate's eye skips right down to this part of the offer. And, yes, the starting salary is important. However, no matter what the number is, remember that you must accept, reject, or negotiate the whole offer — not just one number. Consider the salary in context with other benefits, the work environment, and your quality of life.
Is it negotiable? Yes! In fact, starting salary may be the most negotiable element of the job offer, and positions are usually opened with a salary range in mind. For a high-quality, perfect-fit candidate, the company may be willing to go to the top of the range — or even slightly over. Tip: If you try to negotiate the salary and the employer won't budge, consider asking for a re-evaluation of your salary at the six-month mark.
Depending on the company and the position, you may see a signing bonus and/or a performance bonus mentioned in the job offer letter. A signing bonus is usually paid when a candidate starts with the company, while a performance bonus is contingent upon the company's financial results and the employee's performance.
Is it negotiable? It depends on the company. Some companies have a fair amount of flexibility when it comes to bonuses. Others have a more rigid, company-wide bonus structure. For example, if the company growth exceeds its goal for the year, then each employee gets an X-percent bonus.
This one is self-explanatory: The offer letter will usually include your start date (and end date, if your employment is temporary).
Is it negotiable? Sometimes. There are situations when the company has to hold a firm line on the start date, usually because critical projects depend on it. Other times, an employer may be flexible, especially if you have a good reason to be negotiating this point. The start date should allow for the hiring process to get finalized and for the candidate to give at least two weeks' notice at their current job if needed.
Paid time off
This part of the offer will list the number of paid days off you receive. Some companies treat all time off as a single bucket while others differentiate between vacation and sick days. Keep in mind that time off (especially vacation) is usually earned. That means that for every day you work, you accumulate a fraction of an hour toward your paid time off. Some employers will let you “borrow” against earned time off or take the time you haven't earned yet, however.
Is it negotiable? Not typically, although there are exceptions. Most companies have a set policy for paid time off. However, if you are willing to part with the “paid” part of “time off,” you may find some flexibility. If you have an existing obligation that requires time off, whether for a wedding, surgery, or time with family, be sure to mention it.
Perks and benefits
An offer letter may mention several types of benefits including child care, health and dental insurance, group life insurance, disability insurance, 401K, etc. Look for other options important to you, such as tuition reimbursement, car allowance, professional dues, conference attendance, or continuing education.
Is it negotiable? It depends on the benefit. It may be difficult to negotiate health benefits, although you may have choices when it comes to plans and providers. Group insurance plans are usually sold company-wide with little flexibility. However, there's usually room to negotiate professional expense reimbursement. For example, you may ask for the company to pay for your CPA license renewal and continuing education, especially if being a CPA is a key job requirement.
The job offer letter will usually list your expected place of work. Depending on the job, you may or may not be expected to spend a lot of time in the central office.
Is it negotiable? Often, yes. Technology has made remote work more feasible than ever, so working from home (at least some of the time) may well be on the table. Some companies have different offices, which may give you work location options. Keep in mind that if you have supervisory responsibilities or on-site meetings, your ability to negotiate an out-of-the-office arrangement may be limited.
Relocation expense coverage could range from a few hundred dollars to paying 100percent of your moving costs, covering your rent at a temporary apartment in a new city, and even paying the mortgage on your house in the old city until it sells. Read the fine print to find out what they will do for you.
Is it negotiable? Yes. However, the end result will be highly dependent on the company and the circumstances of the move. For example, let's say you're offered a job that would uproot your family, even though you would prefer to stay where you are. In this case, you may have a strong position to ask for reimbursement of all expenses associated with moving and settling into a new house in a new city. On the other hand, if you live in Florida and would love to move to Denver for better snowboarding, then the idea of the move came before the job offer. In this scenario, it may be harder to compel the employer to pay for your moving expenses.
Keep in mind that if your offer letter is missing any of these (or other) components that are important to your final decision, it is OK to ask questions. Don't assume that things will work out or that the unseen and unstated benefit will magically turn out to be exactly as you had hoped. Get clear answers on everything that matters. Sometimes, the answer may be in an employee handbook that the hiring manager can provide, or you can get an important point added to the offer in writing.
3 things not to do when you get a job offer letter
Now that you have reviewed the job offer letter, you may be tempted to jump into action. Be sure to avoid these common mistakes that can be difficult (or even impossible) to undo:
1. Don't accept or reject immediately
By all means, do acknowledge the receipt of the offer right away. You may share that you are excited about the opportunity and need a little time to consider it carefully. This is especially useful if you are waiting on another offer, but it's still wise to take some time even if you are only looking at the one offer. Put a little time distance between you and the offer and reflect back on your experience interviewing. Remember why you were searching for a new opportunity in the first place and whether this offer would move you in the right direction.
2. Don't celebrate just yet
Some candidates may feel the temptation to throw caution to the wind. However, do not quit your current job or post about the new job on social media just yet. An offer is just an offer, and things could go wrong in the final stages of the process. Legal action against the company, an unexpected vote on your candidacy from the Board of Directors, or a snag in background checks could stall or even end the prospect of your employment. Before you say or do anything that you can't take back, be sure that the process is completed.
3. Don't just go with the highest offer
Yes, your salary matters, especially if better pay was part of the reason for your job search. However, your happiness at the new job will depend on many things in addition to salary. Rapport with future colleagues, managers, and bosses; your commute; the company culture — these factors and more should all be weighed carefully.
3 things to do instead
1. Do review the offer carefully
Read the entire offer and ask any questions you may have. If you need additional documents to make your decision (an employee manual, details of health insurance plans, etc.) be sure to request and review them. Ask the hiring manager to fill in any important points that may be missing.
2. Do check your priorities
Now is a good time to go back to your priorities. What about your next job is important to you? Consider your needs and your wants right now, as well as in the future. Look at financial and non-financial factors to be sure that you are seeing the whole picture.
3. Do pay attention to your gut
If your logical mind is saying “Yes” to the offer, but you're dreading making the call to accept, pay attention to that feeling. You may talk it through with a family member, a friend, or a mentor. You may sleep on it. No matter which path you choose, don't ignore that gut feeling.
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