Competing for Talent? Consider Your Offer & Reward Letters

Engaging offer and reward letters help organizations lead with transparency and stand out from the competition.

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Offer letters set the scene for potential new hires and give them an idea of what to expect if they join your company. And reward letters allow you to share comprehensive compensation details, building on the positive foundation you laid during recruitment.

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Keep reading to learn the ins and outs of offer and reward letters and how, when used effectively, they can give your business a competitive advantage.

Offer Letters & Reward Letters

What is an offer letter?

Let’s start with the basics. Offer letters are a means to communicate total rewards to potential new hires. 

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They provide a complete picture of your compensation package and include information, such as salary, bonus, benefits, and health insurance details. Some offer letters may even include compensation frameworks and the candidate’s position in the salary band. 

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Many offer letters also contain new hire equity grant information, but the level of granularity varies. It’s common to share the number of options/shares and the vesting schedule. However, some organizations also dive deeper and outline the latest preferred price, the preferred price for every round, and the current post-money valuation.
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A well-laid-out and detailed offer letter enables candidates to quickly and easily understand their potential earnings and evaluate if the company is a good fit for them. And, sharing all aspects of compensation helps facilitate open and honest discussions.

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What is a reward letter?

Reward letters share compensation changes with employees. Typically, these letters are distributed once the compensation planning cycle is finalized. 

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They typically include information such as an employee’s current salary, salary increases, and any new equity grants. These letters provide clarity and specificity on total rewards packages for current employees.

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Why are offer and reward letters important to your business?

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Spending time perfecting your offer and reward letters will pay dividends later. While offer letters need to meet certain requirements (consult with counsel to make sure you’re ticking those boxes), delivering letters that go above and beyond can make all the difference in the candidate experience. 

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Here are three reasons to invest time and money into designing great offer and reward letters.

1. Exceed Candidate and Employee Expectations 

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Choosing an employer is a significant decision, and many individuals want to make sure they’re selecting one that leads with transparency.

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According to Withe, 93% of job seekers say it’s important to be informed about all aspects of a company prior to accepting a job offer. Articulating your company’s unique benefits helps drive clarity and boost trust, which brings us to our next point.

2. Increase Trust and Boost Motivation

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Being communicative and transparent with candidates and employees gives you a competitive edge. Sharing important compensation information, like equity details, helps employees understand the value of their package over time and better visualize what they’re working towards. 

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The more your team trusts the organization, the more likely they are to deliver top-notch work and stick around for the long-haul.

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“We’ve seen pay transparency build a culture of trust, which increases employee satisfaction and engagement, as well as confidence in our leaders and the direction of the company.”
– Tatyana Levit, Director of Global Compensation at Affirm

3. Show Candidates and Employees You Care

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Offer and reward letters are an opportunity to share benefits beyond typical compensation details, like a 401(k) match or a work-from-home stipend. It’s also a chance to share in-depth information on wellness benefits or health insurance perks. These benefits aren’t directly tied to salary, but they show employees and candidates that you’re considering their holistic wellbeing—which can lead to improved loyalty and employee retention.

How can you level-up your offer and reward letters?

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Using an end-to-end compensation platform like Pave can help you create visual offer letters and reward letters, and better communicate total rewards packages. 

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Pave makes it easy to attract and retain top talent by providing the tools for you to:

• Showcase total compensation: Clearly detail benefits in addition to traditional salary and bonus information 
• Demystify equity information: Share current and potential equity earnings
• Integrate with your existing stack: Seamlessly connect with your ATS of choice 
• Customize offer and reward letter branding: Choose your color palette, upload images, and craft unique copy  

Ready to learn more? Request a demo of Pave today.

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