Training agreement 1

[paultaylor04]

My employer makes me sign an agreement with them whenever they send me on training

which basically states that if I leave the organization within 12 months, I would have

to pay them back the costs of the training. If I leave after 6 months, I would have to pay up 50% so it's proportionate. The cost of the training includes:
a) the actual fee paid to the training company (in this case, it's free)
b) travel and lodging costs (approximately $800 for 5 days in this case)
c) opportunity cost (this comes to a very high number since we charge $1300 for an engineering resource, it's 1300 X 5=$6500)

1) Can somebody tell me what's this training agreement exactly called?
2) Do all companies do it?
3) Is it fair to even charge the opportunity cost since it's unlikely that I'll be sent out on training if there is project work due.

 

[gpastorelli]

I had the same thing happen w/ my last job. I worked at a well known IT bootcamp. I was REQUIRED to take there A+/Net+ class & certification. Yet I was also required to sign a contract stating if I quit within 1 year from either a test or class I was to reimburse them. Which was out of line b/c they're the school, they weren't laying any money out, I set up my own machine and my own books. Only real cost to the m was the vouchers (which they get at a HUGE discount and books).

When I left (several certifications later) they didn't try to envoke the agreement, but only b/c I had a good relationship w/ them and they realized I was leaving for a better paying job b/c I'm having a kid and they weren't willing to give me a large enough increase in salary.

 

[paultaylor04]

I think I'm inching in a big way towards what paterson has to say.

Also, this training is no way needed to perform my job and the company is simply getting some free training from a partner and want to make use of it.

Hence, I think i have better bargaining power

 

[jsteph]

Also, this training is no way needed to perform my job...

That's the key piece of information. In this case, I wouldn't sign the agreement, and simply ask if you could opt out of this unneeded waste of your time and waste of the 'opportunity cost'--which seems to be their per-diem billing rate for you.

The opportunity cost is a real kicker here--if you're actually billable 100% of the time, and actually having to cancel client time due to these 5 days 'training', then they may have a point with the $1300 per day.

However, if you feel forced to do this, and your not directly billable and losing client time, I'd at least negotiate the per diem down to the 'true' opportunity cost--what it really costs them on a per diem basis for you doing your daily tasks. A typical perdiem cost is more like $400-$600 per day for a salaried engineer, including bens, etc.

But even then that's not fair to you--you're being asked, if you leave, to pay them back for time as if it were a paid vacation--but you weren't on vacation and couldn't do whatever you wanted in this training--it's still work. So, as suggested by others, it's a win-win for them, and a lose-lose for you, since the training is of no value and now you're locked out of other opportunities that may come along.

Bottom line though, as said before by other posters, it's a free market--and that goes both ways. They have every right to ask you to sign this agreement, and you have every right not to.
--Jim

 

[juliane26]

In a large IT company I worked for this was also part of the contract.

But, when I quit, nobody asked me anything.

Not sure about legal or not.

I think it is only the case if lets say somebody receives a very special and expensive training for really lots of money; to ensure the person is not educated for another company. May be an really expensive certification (Project Management or whatever usually are 6 weeks classes with huge certification fees) is actually a requirement for the new job, I can imagine here it would apply and they can ask you to pay back.

I do think at least here in the EU the condition was whether the education you received was useful for your next job. If you go off selling shoes - nothing to worry about the fee for a database or network admin class.

Juliane

 

[aarenot]

Opportunity cost is just a way of making you pay for the opportunity for them to make more money after the training.

The training increases their opportunity to make more money, it increases your opportunity to take on more liability. Make sure with your increased liability, it increases your opportunity to make more money. Get a pay raise commensurate with your liability, and their opportunity to make more money. Do not allow this to be an opportinty to pass on the cost to you.

 

[CajunCenturion]

As is usually the case, the reason such contracts and stipulations exists is because someone got burned by not having them.

No one -- personal, business, or otherwise -- wants to make any sort of investment without some reasonable assurance of return. When a company sends you to training, they are making an investment, and it is quite reasonable for them to try to protect that investment. In fact, one could argue they have a legal and feduciary responsibility to protect that investment.

Training can be be a win-win situation for both the company and the employee, especially if both parties respect the position, needs, desires, and obligations of each other.

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[aarenot]

These contracts are usually designed to put the employee at a disadvantage. It black mails the worker into a position where they financialy can not leave the company, so the employer does not have to pay the employee, based on the accomplishments they achieve. If the training increases the revenue of the company based on a new billing rate as you have mentioned, get you raise up front, or do not sign it. Do not put yourself in a liability position, in order to make the employer more profit, unless they are willing to share that profit by giving you a raise.
I agree the employer needs to protect their investment, but they also need to know who butters their bread, and compensate their people.

I do not sign general agreements like this, but I will sign such an agreement for specific training, which includes a compensation element for myself, based on my new value, due to the greater revenue I generate. Any business man should be willing to negotiate this type of agreement, if they intend to be reputable.

 

[aquias]

aarenot,

I can't say I've read anything in this thread that I disagree with more. "Get your raise up front"???

The company is footing a bill for training, training that probably comes at the cost 1-3k to the company (possibly greater if there is travel involved).

To me, that's a pretty decent raise right there. Not to mention adding an additional skill set. Now if the company is making more money, at the end of the year OR during your review is the time to negotiate a raise.

 

[aarenot]

I mispoke, I mean by "get your raise up front" to negotiate an equitable reward for your effort to secure a higher profit margin for your employer. Some reward for succesful completion/ certification, and a raise in the document which you sign. Contingencies on when the raise kicks in, or demonstrated proficiency, or new product volumes are fair.
Get a commitment up front to compensate you for your new skill level, before taking on any liability for the training costs. Some raise is only fair, and commitments are nothing if not in writing. They want your commitment in writing with penalties for breach, get some raise in writing, even if the raise has contingencies, or time frames.

 

[Dollie]

If an employer offers paid training, that could be considered a raise. It's education that you do not have to pay for, therefore no $$ out of your pocket. Getting tuition reimbursed is the same. An additional benefit, a raise, a bonus... however you view it, I don't see why people see it as negative!

Company loyalty and the tendency to grow roots and stay at a company seem to be long gone. The urge to jump ship at any perceived "wrong" is more pervasive in today's society. Everyone seems to be looking for the next best thing, the greener grass (there's a great thread on this here:

http://www.tek-tips.com/viewthread.cfm?qid=1150371&page=1

While today's workers want protection and commitment from their employer, they are shocked/surprised/angry etc when an employer expects the same of them. If I were a business owner paying thousands of dollars for someone's training, I would expect at least a little benefit in return. I would *not* expect them to turn around and start looking for a better job because they now have this training. There seem to be many people that would consider this.

Frankly, I think that's a damn shame.

 

[jsteph]

however you view it, I don't see why people see it as negative!

I think the original poster saw it as negative because in that case--the training was of no use to him or his job, but it sounded (I'm delving into conjecture here) as if sending some of his people to training was some sort of payoff to some business crony.

But otherwise the training could be only be considered a raise 'on paper', that is, you don't really get monetary value from it unless you:
A: Get a monetary raise or bonus from the employer
B: Get a higher paying job (based in part on that training) from another employer.
C: Makes you so much more efficient in your job that you can go home an hour earlier each day and recieve the same pay.

From a 'spiritual' sense, education can be considered valuable--but I generally associate that with taking a philosophy class or ancient roman history or something. The technical details of, say, configuring a router don't qualify as 'spiritual'...to me anyway.
--Jim

 

[paterson]

From Dollie's last post:

****If an employer offers paid training, that could be considered a raise. It's education that you do not have to pay for, therefore no $$ out of your pocket. Getting tuition reimbursed is the same. An additional benefit, a raise, a bonus... however you view it, I don't see why people see it as negative! ****

You say to look at it as a benefit, raise or bonus. Do you expect employees to pay back their bonus or raises if they leave?

Almost all the training that I have received at work has been for the company's benefit. What I mean by that is, the company needs to have a certain number of certified trained employees in order to sell and maintain a particular product. In that sense, I do firmly believe that training is a cost of doing business that the employee should never have to bear.

If an employee is asking for training for personal development that the company do not really need, then maybe some arrangements should be made for reimbursement.

As to another one of your comments - ***I would *not* expect them to turn around and start looking for a better job because they now have this training. There seem to be many people that would consider this.*** I totally agree with you there, especially if someone plans to take said training for the purpose of finding another job as soon as it is over.

 

[svanels]

the training was of no use to him or his job

The original poster stated an amount of approx $6500 for 5 days.

We can argue that it is peanuts or not, fact is that a company is paying money for somebody to get some knowledge.

I dont think that a company would send a computer tech to an animal protection society course.



Steven

 

[aquias]

Almost all the training that I have received at work has been for the company's benefit. What I mean by that is, the company needs to have a certain number of certified trained employees in order to sell and maintain a particular product. In that sense, I do firmly believe that training is a cost of doing business that the employee should never have to bear."

I'm going to start with this. It's a bad argument. For everyone that is trained and/or certified there are MANY people who can do the same work as efficiently, if not more so. Certifications are nice, they give a "formal" training and on occasion may be essential to ensuring uninterrupted support (IE. Someone quits with little to no notice).

But as a way of doing business. I've never been in a shop where certifications were required. Nor have I seen a company actively require certifications (most recruiters will prefer them, but not disqualify anyone for lacking them).

Education as a "soft" raise. That argument is indeed correct. But there is something that has to be considered with this.

Marketability - You now have a greater knowledge base to stand upon. You are now more equipped to ask for raises and seek out new employment.

Lastly, in regards to immediate/long term negotiated raises. I don't get this still. What you're doing, in effect, is double billing the company for your training. You're having them spend 3k to improve YOUR skills (yes they also reap the benefits of this new skill set) and then asking for an immediate monetary re-reimbursement.

The contract protects the company from losing several things here...

1. Time
2. Money
3. An investment (that is what you become when they send you to training).

It's only reasonable that they protect themselves. It also reasonable to say that the initial cost of the training is YOUR raise for the new skill set. Negotiation for additional monies should happen at review time or at the completion of a major project where your new skill set was key.

 

[paterson]

What I meant by certified employees is that some product manufactures in telephony (Panasonic, Avaya, Mitel, Nortel, Toshiba) require that a company wishing to distribute their products need to have certified employees on thsoe product in order for the company to sell them. These product companies will also not support dealer companies on a technical support level either if those certs are not in place.

In this maner, the company cannot do the business they do without having product certified techs on board.

 

[aquias]

Alright,

Thanks for the clarification. In that specific instance, I'd still say you're required to sign a contract and you should not be asking for a raise. Two reasons...

1. You're still an investment. The company needs to protect itself

2. This is a "Cost" of doing business for this company. They should have disclosed the need for this training and you should have negotiated the higher pay rate in the terms of your hire.

 

[CajunCenturion]

These same companies will also not be able to do business if they have to constantly pay for certification and training when their competitors are hiring already certified employees. Look at the scenario.

Company A hires an employee and then spends $6,500 to get an employee trained and certified. What is to stop Company B from then hiring away that employee, thus saving Company B the training and certification costs? At the same time, Company is now out $6,500 and cannot do business because they no longer have a certified employee. Company A must protect itself, and its investment, from that type of corporate raiding.

Company A must also protect itself from employees who simply want someone else to foot the bill for their education before stepping out on their own, or who will without hesitation, jump ship seeking greener pastures, especially now that they have a new certification.

Some have said indicated that there are expenses and risk in doing business. No question about it. Other have also said that companies need to realize that their people are their most valuable asset. Again, no question about it. The flip side is equally true, the employee IS part of that risk, and not only are they as asset, but the employee is a liability as well. Would you, as a manager, invest in an employee that has indicated they are a flight risk, that they might jump ship without hesitation for what they might consider greener pastures? As a manager, how much money would you spend on that employee? What would you do, as a manager, to protect your most valuable asset - the employees?

If you don't spend the money on the employee, the employee will leave. If you do spend the money on the employee, then the employee wants more money or will leave. Remember Company A and B from above? At the same time you're spending all this money on employees, you have to remain financially competitive in the marketplace.

Please don't get me wrong. There is absolutely nothing wrong with constantly changing jobs always seeking something better for yourself. No one can blame you for that. But by the same token, that behavior makes you a risk to your employer. Your employer cannot commit you to a long-term project because your employer knows you may not be there next week. Whether it be from salary raises, bonuns, or lost training, your employer cannot afford to blindly invest in you. It would be foolish for your employer not to build in asset protection.

--------------
Good Luck
To get the most from your Tek-Tips experience, please read FAQ181-2886
As a circle of light increases so does the circumference of darkness around it. - Albert Einstein

 

[paterson]

I think that employees should be asking/negotiating for raises during their reviews. At that time you can approach the subject, not before or just after your training.

That is of course if you have regular reviews. I have worked in companies that did not have those reviews and I was required to bring up compensation when I felt the need.

By the way, you said a contract should still be signed. What would this contact outline? (in the instance I outlined).

 

[aquias]

What I would call a standard agreement. For a year after the training if you leave, you're liable for paying back all/some of the training. This is the only way for a company to protect itself.

 

[paterson]

Hey Cajun, I agree pretty much with what you say. It's just that as an employee, I need to protect myself. I am also not the type of person to willingly accept training with the knowledge that I am leaving or will leave for greener pastures. I know, you are not directing the comment at me. It's too bad that things have gotten this way. I think it really stems from the trends of the past 15 years. Those trends have been for, atleast the most part, massive layoffs and "right sizing". Employees have realized that for the most part, only they are looking out for themselves. As such, employees have to protect themselves as much as possible.

You mention Company A and B. Would Company A not jump at the chance to hire an already trained employee from Company B as well? Employees should not be caught in the middle.

I really don't think that this thread will really change much. It seems that this topic is a very polarized issue.