No one likes getting this type of letter but sometimes it’s necessary to send out, because applicants don’t like to be left guessing. A rejection letter after interview process is polite and lets the applicant explores other opportunities rather than be left guessing.
Let the applicant know that they weren’t selected for the position.
Let the applicant know why they weren’t selected.
If there’s any improvements the recipient can make to help improve their chances in the future, clarify them.
I regret to inform you that after careful consideration, your application was not considered favorable. We have instead decided to hire someone internally. Our internal employee we felt was more qualified to do the work and requested a substantial amount of less money. Your application was great but we just went a different way. In the future, I would steer clear of demanding a high salary right off the bat until an employer can see your skills in person.