Is It Necessary to Include Package Details in Job Offer Letters to Prevent Job-Hopping?

Dear HR Friends, I hope all are safe and doing well. I need some suggestions on providing an offer confirmation letter along with package details for the selected candidate. Is it mandatory, or can we send a job offer letter without package details? Nowadays, job-hopping is a common problem that HR faces in every company. Can someone provide some suggestions? Thank you.

Job hopping and salary package disclosure

Job hopping is not contingent on the mention of a salary package, though disclosure of the package could be used by the candidate to bargain for a better package elsewhere. Even otherwise, once the candidate is not satisfied with the job offer, he/she will always be on the lookout for greener pastures. While disclosure or non-disclosure need not be a uniform solution for all, you can use it as per your judgment.

Dear Shashipriya, yes, you need not write the salary break-up or even a consolidated salary amount in the offer letter. The practice of withholding this amount has been going on for a long time for the reasons mentioned in your post.

However, please be cautious. There should not be confusion regarding the salary break-up or take-home salary for the prospective employee. Occasionally, I have found that misunderstandings occurred regarding the salary break-up, and the employee was frustrated after joining. Please find ways to avoid such situations.

Thanks,

Dinesh Divekar

Dear Colleague,

It is sound HR practice to issue an offer letter with all essential conditions such as salary package, designation, probation period, and joining date. Your written commitment will lend great credibility to your intentions to the candidate.

Addressing candidates backing out after accepting the offer

To address the issue of the candidate backing out after accepting the offer letter, you may include a clause stating, "This offer is made subject to your accepting the same by returning the duplicate copy of this letter duly signed as a token of your firm commitment to join the company on the committed date. If you fail to join after acceptance of the offer, the company shall proceed legally against you."

This clause is suggested to safeguard your legal rights and also to instill some fear in the mind. However, this is not a panacea to the problem but will facilitate nipping the problem in the bud.

Yet there will always be one or two who may intentionally or out of some compulsion ditch you at the last minute. This clause will give you a handle to invoke it in fitting cases.

Regards,
Vinayak Nagarkar
HR and Employee Relations Consultant

Dear Shashipriya,

There is a suggestion by a learned member to include a paragraph in the offer letter stating that if the candidate fails to join, the company is free to take legal action against the candidate.

However, we must consider the opposite perspective as well. If such a deterministic warning is included in the offer letter itself, the candidate may perceive it as a threat and think that the company has a coercive work culture. Such threats might deter talented or confident candidates. What if the candidate declines the offer? When a talented candidate declines the offer, what will be the loss to the company? The company will suffer due to the opportunity cost, which is incalculable.

Filing a Suit

Suppose the company files a lawsuit against the candidate for failing to honor the condition of the offer letter. Nevertheless, the case could drag on for at least a decade, and what will be the cost even if the court rules in favor of the company? Secondly, it will distract from the primary goal of business expansion or customer satisfaction.

By the way, how many suits can a company file? A few suits will burden your company with the weight of lawsuits.

The Changing Job Market

Gone are the days when there used to be an employer's market. For the last 20 years, it has been the employees' market, and they have more sway in the job market than employers! Therefore, while making a decision, one must be mindful of the results, usefulness, advantages, and disadvantages of one's actions or procedures.

Addressing the "No Show" Problem

Nevertheless, the problem of "no show" or backing out by the candidate must be addressed. One suggestion from my side is to show a short video, say of 5 minutes, highlighting the positive aspects of the company. Do not send this video via WhatsApp or email. In the video, you can showcase how the company helps employees grow, examples of employee growth, the autonomy given to employees, how your company differs from competitors, and so on. This will make your company attractive. However, avoid painting a false picture in the video. Otherwise, the newly joined employee should not feel cheated.

Thanks,

Dinesh Divekar

Coercive clause in the offer letter

A coercive clause in the offer letter incorporating penalty/damages for non-joining, to my understanding, is unlikely to be upheld in legal proceedings, if at all instituted.