How-To

What is an Employment Verification Letter and When Should HR Issue One?

Our global workforce looks a lot different today than it did before the world gradually went into lock down from early 2020.  As businesses try to adapt to the post-Covid marketplace, they’re simultaneously trying to anticipate how the “new normal” will impact their recruiting and hiring processes. 

 A part of this new environment is the widespread adoption of remote workers as organizations try to tap into the significant cost savings that can be achieved with a hybrid workforce. 

The intensive competition for talent and the torrid volatility of our current job market has only escalated the importance of employment verification in modern hiring.  

As HR professionals try to understand the dynamics of this new job market, the steps involved in employment verification have never been so important, considering how our workforce has become so geographically dispersed.  New HR technologies, including advancements in artificial intelligence and robust applicant tracking systems (ATS), are emerging to make the vetting process of new employees less risky and less time-consuming for HR professionals, including the steps involved in employment verification.

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Employment Verification Defined

Bad hires can be tremendously costly, especially in a job market that’s so hyper-competitive.  Having to rehire someone after discovering they aren’t qualified for the job, after all, equates to approximately $50k or between 30-100% of the position’s salary.  With such a significant amount of money and resources at stake, HR professionals and recruiters are being held to the highest levels of accountability for properly vetting job candidates beyond just reviewing their resumes - employment verification is a critical component of ensuring that accountability.

Employment verification, or verification of employment (VOE) as it is sometimes called, is a process that verifies the credibility of a candidate in terms of absolutes during the interviewing and onboarding process.  Many organizations have an internal HR staff that can handle the VOE processes capably enough, though some organizations rely on third-party relationships to administer thorough employment verification steps and background checks.

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What is an Employment Verification Letter?

The employment verification letter is simply a one - or two - page document furnished by a former employer verifying a previous employee’s dates of employment and job titles while with the former employer.  In most cases, these letters also provided details about the role the employee had while with their former employer.  

 Also called a “job verification letter” or “letter of employment,” these documents sometimes also provide information that’s a bit more comprehensive about the organizations issuing the letter, such as information about the industry they’re in.

Purposes

There are a variety of purposes that merit an employment verification letter – they’re quite common amongst auto lenders and apartment owners to ensure their applicants have the income to pay their monthly bills.  

Mortgage lenders also use these letters to help them more accurately assess borrower qualifications.  However, in the world of recruitment, HR professionals obviously have their own need for accuracy when it comes to assessing the employment history of candidates they’re considering for hire.  The employment verification process isn’t always as easy as verifying things with a few phone calls.  Employers can run into roadblocks if previous employers go out of business or if candidates show reluctance at any request to contact their previous employers.

The fact is that the employment verification letter can serve as an official source of information that comes directly from a former employer, and it eliminates any need for HR professionals to chase down former employers.  

Ultimately, the endgame of the employment verification process is that it’s administered to reveal any inconsistencies between the real employment history of a job candidate and the information they furnish on their resume or on their application form.

There’s one primary reason why employment verification letters have become so important today:

In 2020, a survey involving 400 job seekers and 400 hiring managers was done to find out just how often job seekers misrepresent themselves when searching for a job.  According to the survey, almost 80% of job seekers either misrepresented or considered misrepresenting themselves on job applications and resumes.

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What are the Components

While these documents are vitally important in verifying the work history of job candidates, an employment verification letter itself doesn’t consist of much more than a few basic bits of information.  If you’re ever asked to prepare one, here are the key components that you need to include: 

  • Include the name of the company requesting verification
  • Full name of the former employee
  • Date(s) of employment
  • Progression of job titles
  • Description of duties
  • Employee salary
  • Reason for separation / termination

Of course, you can find a swath of resources and templates online that suggest other elements be included, but the best strategy is to acknowledge specifically what was included in the original request for the letter.

How to Write One

The best employment verification letters are written to be brief and concise.  They should always be distributed using your organization’s official stationery or letterhead – preferably one that features your organization’s logo.  

Upon receipt of a request to write an employment verification letter, verify with the person or organization requesting it whether an emailed version of the letter is acceptable or if a physical letter is required for their purposes.  Employment verification letters are commonly written using a standard business letter format - your organization’s contact information, the date, and the recipient’s contact information in the upper left-hand corner.

For your letter’s opener, identify who you are and define your title (role) with the company.  List the name of the company you work for and detail the reason for writing the letter.  

There may be cases where additional information is requested to verify employment.  For example, you may be asked whether you would ever consider re-hiring the employee in question.  What you decide to share in the letter depends largely on what HR-related information your organization permits you to share about former employees with other organizations.  

If there is something that your organization deems confidential or sensitive about its business and doesn’t permit you to share, simply and briefly explain that in the context of your letter that it’s not your organization’s policy to reveal this kind of information.  It is not recommended that you ignore such requests entirely which may reflect poorly on your own organization if an explanation isn’t provided for information that is requested but not provided.

The important thing to remember is to only provide the information that’s being requested; nothing extra should be included.  Don’t turn an employment verification letter into a promotional piece.  Finally, you should close by offering to answer any questions that may have gone unaddressed.  Remember to always share your contact information in the letter.

LEARN MORE: Click here to learn how Manatal can help you provide superior candidate management within a few clicks. 

When are Employment Verification Letters Issued? 

There are myriad scenarios today that might merit the issuance of an employment verification letter.  The most common scenario that HR professionals will run into is a need to verify the work history that’s provided on a prospective job candidate’s resume or application form.  

In a financial sense, organizations might be asked to issue one of these documents when an employee wants to buy or rent a home.  If an employee wants to apply for a loan or a credit card, these situations might also require an employment verification letter to be issued so that financial institutions have a way of verifying employment status and can have confidence that new loan recipients will be able to meet their financial payment obligations.

Lastly, there are people who may need one of these documents to apply for their immigration status or for a working visa to successfully locate employment overseas.  In these scenarios, it’s likely that a government office will request an employment verification letter.

Conclusion

Employment verification letters may seem like a small, maybe even trivial, piece of the hiring puzzle, but we’ve hopefully shown you why they’re such an important part of the vetting process for potential hires.

It’s important to understand that the geographical barriers of the job market we once knew are slowly eroding away.  As more organizations trend towards the adoption of a hybrid workforce, they’re leaning heavily on innovations in HR technology to serve as the platform they use to administer a reliable and thorough employment verification process, of which verification letters play one small, albeit crucial, part.

Today’s forward-thinking organizations are winning the talent war by investing in HR technologies that can reliably expedite and simplify the employment verification processes all from within a simple online dashboard.  

Cloud-based ATS systems with enhanced AI recommendation engines, candidate relationship management (CRM) software and applicant database analytics are at the heart of every organization that’s presently attracting the market’s best and brightest.

If your organization would like to know more about how Manatal’s ATS platform can support your employment verification and candidate vetting efforts, you can take advantage of the 14-day free trial that the company is currently offering.

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