Tuesday, March 30, 2010

The Offer Letter

Do you give actual offer letters when bringing on someone new? Of course you do. Yes, even when you've reached a verbal or email agreement, you still go through with all that old formality.

Don't get me wrong, no one should find out about an offer in an offer letter - it should have already been discussed it in detail. But the letter does make it official - like a referee with a whistle. Candidates like that. And you like that. Folks (sometimes you) forget or misunderstand what was agreed on. Not only can you use the letter to welcome your newest hire but it also ensures you are on the same page with all the details, and it prevent arguments in the future.

Here's what to include:
  • Expected start date
  • Supervisor's name
  • Job title - list exempt/non-exempt and FT/PT status
  • Primary job tasks - make sure to say these may change, expand or evolve over time)
  • Earnings (I think listing annual salary is fine, but some argue to only list earnings per pay period in - order to avoid any arguments the letter represents a contract). Stick an At-Will statement in their to cover all your bases. And definitely don't say any incentive payments are guaranteed.
  • Equity - include just the basics here, like # of options, strike price and vesting period
  • Benefits - Holiday, vacation, personal, FSA, 401(k), etc...
  • Expiration date - give a date they need to get back to you with a decision -typically this is a week, but listen to their needs and make your own call. Give time for, and encourage, discussion with family and friends.
  • Non-compete - add a phrase that by signing they are indicating they are not part of any non-compete or similar agreement that would preclude them from taking this job.
  • Contingencies: State that offer is contingent upon completion of an I-9 form as well as any other background checks, screens, or confidentiality agreements that you require employees to complete.
I know .... several of these items seem like too much. Well, they are until you have a problem and wonder how it could have been prevented. The whole thing should not exceed 2 pages and you should create a template to work from next time. Add some personal touches - like the writing about the importance of their hire, the exciting things on the horizon, or by delivering the letter via singing telegram or with a sweet present.

Did I miss anything? Do you have any offer letter success or failure stories?

Friday, March 19, 2010

Start-ups and Holidays

I know you don't want to think about it. Your start-up is cool because you don't have to designate Holidays. You don't need to. But, alas, I'm here to say you need to write down and distribute the Holidays your company is closed. It's good for recruiting, good for employees, good for the company, and good for you.

Do you give the Friday before the 4th of July off? The day after Thanksgiving? Imagine being a new employee recently completing a move to Boston. You head in to work on Patriots' Day to find out you are the only one in the office. Or worse, you come into work on Patriots' Day and only half your team is there. Do you get angry that nothing gets done? Do you give the staff that showed up an extra day off?

want to know in advance so they can plan that bbq or ski trip. And they'll remember when they work a day when others are 'off'. For your part, if an employee actually asks, you don't want to have to think about days off on the fly - especially when your answer is no. Worse yet, you don't want to get irked when 3 of your team don't show up on President's Day because they thought it was a Holiday.

In the US, on average, companies usually provide 10 paid Holidays.

  • New Year's Day
  • Martin Luther King, Jr. Day
  • Washington's Birthday
  • Memorial Day
  • Independence Day
  • Labor Day
  • Columbus Day
  • Veterans Day
  • Thanksgiving Day
  • Christmas Day

Source: 5USC Sec. 6103.

If you want to give more days, fine. Give 'em. At a moment's whim you can still declare National Administrative Professionals Day or International Talk Like a Pirate Day as a paid day off. You can decide at the bar that you'll shut down if there is enough snow to go sledding. It will even feel like a cooler place when staff get days beyond what was expected. But you'll also be laying the foundation of a strong company (think audit and legal), giving yourself a starting point to address problems, and employees want to know.