Recouping Costs Lost On Newly Trained Staff Who Leave Your Employment

Peninsula Team

April 20 2012

“I have recently had 3 members of staff leave my employment within two months of joining us. How do I recoup the money I spent advertising and training and how can I prevent future employees leaving once they are fully trained?”

When you invest money into training and developing your workforce, the benefits should be felt by both yourself and your employees. You will benefit from having a more able cohort of staff and your employees should feel valued and may even end up with a career enhancing qualification. It can therefore be very frustrating when an employee resigns shortly after being trained or recruited and before you have had a chance to feel the benefit of the time and money you invested in them.

Recruitment can be quite costly, but unfortunately the money you spent on advertising for new members of staff is part and parcel of the recruitment process and is not something that can be recouped now, just because the new starters happened to leave after a just a short period of time. Conversely, you may be able to recover all or part of the money you spent on training, depending on the type of training completed and what you agreed with your employees before they started training.

The costs of your standard in-house training that is given to new starters would not be considered a type of work-related training from which employers would seek to recover costs at a later date. The cost of on-the-job training is something that you should budget into your normal expenses and is not something you will be able to recover, even though your employees left after just two months.

However, if you paid for more formal, work-related training that your employees chose to undertake, such as training that has enabled them to gain a professional qualification that will prove useful outside of your employment, you may be able to recover some of the costs if you entered into a formal training agreement. A training agreement is a contract between employer and employee that sets out the terms and conditions for paying for training. This will usually stipulate that the whole or part of the cost of training paid for by the employer will be recoverable should the employee leave within a certain period of time. A sliding scale is usually used which provides for a decreasing payback provision corresponding to the length of service the employee has after the training is completed.

There is no legislation specifically related to an employer seeking to recoup training costs; it is purely the training agreement or contract of employment that will set out your rights to recover costs. So, unfortunately, if you did not enter into a formal agreement with your employees before they started their training, or did not obtain express agreement from the employee before they left to deduct the monies, then you will not be able to claim back the money you invested in training your employees.

If is important to note some deductions may affect National Minimum Wage (NMW) calculations. Whilst this will likely not be an issue if the employee is a high earner, if the employee is a low earner, employers will need to make sure that some deductions do not take the employee’s gross pay to less than the NMW.

For any further information on anything in this article, please call our 24 Hour Advice Service on 0844 892 2772.

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