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How to Extend an Offer
After all the effort both your team and the candidate have put into the process, letting a candidate know they are formally getting an offer is a fun and celebratory occasion—second only to having the candidate accept that offer, then join and thrive at your company! We recommend you deliver the news in person if possible, or over the phone if necessary.
A common question, at this point, is who should deliver the offer, which can be unclear, especially if a hiring manager and recruiter have been partnering together on the process. Ideally, the hiring manager delivers the good news in person or over the phone. After all, they will be the one the candidate is likely working with and will be best equipped to build the candidate’s excitement about joining the team.
Here are a few things to do when delivering the offer:
Clearly state that you’re extending an offer. A lot of times, you might start by saying things like “the team really enjoyed meeting you” and “thank you for sitting down with us.” But keep in mind that common niceties like these are the same things you say to begin letting a candidate down politely. Don’t bury the lede or be anticlimactic! Keep it simple and straightforward: “We’re thrilled to offer you a position of Software Engineer at Acme Technologies.”
Convey your excitement about the prospect of them joining. If you need to pump yourself up, remind yourself of all the effort you’ve both put in so far, and think about how fulfilling it will be for you and how impactful it will be for your company if the candidate joins and succeeds. (If you’re having trouble doing this, it could be a sign you didn’t make the right decision, but it could also be coming from nerves that the candidate will say no.)
Give them specific, positive feedback from the process. You want the candidate to feel uniquely appreciated. Make it personal. You want them to think “these people really get me,” and not “these people designed a recruiting process that happened to spit out a decision to hire me.”
Build on the excitement. Translate your own excitement into the concrete reasons why you’ll be thrilled to see them in the position. Tell them about real challenges the team has been facing, why they are the person who can help meet them, and what they’d get to work on as soon as they join.
Ask them how they are feeling. Even if a candidate is clearly expressing some amount of happiness, dig deeper to try and get a sense of how close they are to accepting the offer and what questions they might still have. You can remind them of considerations they brought up earlier in the process and offer information that can help them or access to your team to answer further questions. For example, you could say something like, “I know when we talked earlier you had some questions about our product roadmap, so our Product Manager would love to hop on a call with you later this week to talk through that in more detail.”
Be aware of other decision-makers. For many couples, decisions are made together, or by a whole family. Changes in employment and livelihood can bring up strong emotions that cut to the heart of a family’s security and stability.
If you are a startup trying to close a candidate, you must understand how the family is evaluating risk and whether the spouse may be taking a lead role in determining that risk. Without being pushy or obnoxious, you can offer to help talk to the spouse. This can be particularly helpful and appropriate if the family has questions about complex things like equity, logistics and costs of moving from one city to another, and work-life balance at the company.
Check in on competing offers. Do they have other offers yet? Do they expect to receive other offers, and if so, when? It’s wise to get a sense whether getting more offers is essential to them, or are they willing to make a decision primarily based on this offer.
Provide a confidant for the candidate. If you haven’t already, make sure there is someone the candidate can talk to privately. There might be issues that a candidate is uncomfortable discussing with their future potential manager or teammates. These can include potential cultural conflicts, reporting structure issues, confidential information around health benefits, or even compensation. Often, the recruiter plays the role of confidant, though it could be a member of HR or a manager of a different team.
Go the extra mile. There are a few other ways you can add some extra care when you extend an offer. For instance, at some companies, the entire team will be on the call to break the news and show excitement (though after breaking the news, usually the team will step out so the hiring manager can have a more intimate discussion with the candidate). Other techniques include sending the candidate a gift basket with company swag.
Answer compensation questions. Explain to the candidate that you’ll be following up with a written offer letter, which will detail the candidate’s compensation and benefits package. If you know the candidate’s expectations, and feel like your offer will meet them, you could walk through compensation now.
Follow up. You want to stay top-of-mind, and be aware of any changes in the candidate’s status or thinking (for instance, new offers they get, or evolving decision-making criteria). After extending the offer, maintain regular contact. You don’t want to be pushy, but strong lulls in communication are your enemy here. Try to aim for a touchpoint every 2–3 days. It might seem like a lot, but you don’t want to be caught surprised by the news of them signing another offer. Simple emails or short calls will do to stay top-of-mind.
caution For a lot of companies, as soon as the offer is formalized, they may feel a shift in power dynamics. While throughout the process it may have felt to them like they held more cards than the candidate, once an offer has been extended, suddenly the candidate has more power. If you feel this strongly at this stage, the way you run your process needs work. It could be that you aren’t doing a good job getting the candidate excited about joining earlier in the process, that you aren’t invested in the realities of the technical hiring market, or that you have not focused on the candidate’s perspective throughout the process. If you’ve made the entire process a two-sided evaluation, there’s little in the way of a “power inversion,” even if technically you are waiting on the candidate’s decision.
An offer letter is a formal, written document inviting a candidate to join a company and outlining key details about the terms of that employment. A typical offer letter includes the candidate’s job title; who they will be reporting to (name and/or position); compensation information (base salary, equity, bonus if offered, et cetera); a summary of their benefits; the start date; and how long the offer is valid for. A company may wait to send an offer letter until the company and the candidate are already close to agreeing on the offer’s terms.
It’s standard practice to send a formal offer letter via email. It’s a good idea to use a template for this, and some recruiting tools can help automatically generate these letters. It’s also a good idea to make sure that all offer letters are reviewed by a few pairs of eyes before they go out—this isn’t the time for a typo (especially on compensation or title).
Also check with your legal counsel to confirm you’re presenting all the necessary details properly (an offer letter is not a legal contract* but it should be consistent with the ultimate employment contract). In general an offer letter should include the following:
Description and title
Reporting information, including full-time or part-time status
Compensation (salary and stock/equity details, if applicable)
Any conditions such as background checks
Benefits and eligibility, including:
Paid time off
Flexible spending accounts
Flexible work hours
Work from home options
An acceptance deadline, if applicable
Acknowledgement of offer and confirmation of acceptance
Most ATS tools support creating and sending offer letters, and here are some templates or other resources that can help generate them:
Earlier we explained how providing equity compensation can be a great way to incentivize and reward potential and existing employees, especially for startups. But understanding the value and purpose of equity can be really difficult and often intimidating to candidates and the managers tasked with explaining equity to them. It’s worth dedicating special attention to equity when communicating an offer.
Make sure the candidate is sold on the future of your business. If you’re an early-stage startup, it is not possible to know how much a share of the company will be worth or how long it will take for ownership to become valuable. The candidate needs to believe in the future of the company for an equity package to be enticing; hopefully, they believe the company will be more likely to succeed when they join the team. And hopefully, you have been working on this throughout the process, but if the candidate still has concerns at this stage, you, your team, or even your investors can help make sure they believe in your company.