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Recouping Training costs


I am interested in views on recouping costs from employees who leave during and after a considerable education. I understand that a committment to training form would be a good idea, with a signature endorsing repayment of costs if employees leave within a certain period. Anyone experience of this and what this form should contain. I would use this in conjunction with the learning and development policy.
Nigel Bould

12 Responses

  1. Simple Form
    We used to use a simple form detailing the employees name etc. the course details, the cost of the course – the schedule for repayment – i.e. 100% if leaving during the course, 75% within first year and 25% if in second year (which could be amended depending on cost of course and whether it would actually improve their career opportunities elsewhere)

    This would be signed by the employee and their manager and a copy given to the employee and put on their file.

    Just remember to include how the money should be paid back (you can’t just take all their final salary unless they know that’s what you’re going to do, and if you do don’t expect the former employee to say anything good about you afterwards….)

  2. See previous discussions
    Hi Nigel,

    I’m a bit confused as to your perspective on this, you mention you are ‘interested in views’ ie. curious but at the same time you seem willing to instigate the form you are requesting. Looks like you’ve already made up your mind?

    As regards views.

    There is a debate here and I would certainly recommend investigating the CIPD discussion link contained within it.

  3. See previous discussions
    Hi Nigel,

    I’m a bit confused as to your perspective on this, you mention you are ‘interested in views’ ie. curious but at the same time you seem willing to instigate the form you are requesting. Looks like you’ve already made up your mind?

    As regards views.

    There is a debate here and I would certainly recommend investigating the CIPD discussion link contained within it.

  4. Good Motivational Technique.
    I too am confused.

    Is the object of the execise to train the workforce or is it to look for another way to demean them.

    If the object is to retain staff I don’t understand where a strategy like this fits in.


  5. Arian Associates Ltd
    Having shelled out considerable amounts of money to send staff to gain qualifications it is certainly NOT unreasonable to expect some loyalty from them, and for them to remain with you so your own organisation reaps the benefits of the training first. My own experience of this is similar to the first comment – 100% if during the course itself, followed by 50% in year one after completion and 25% in year two after completion, I had no complaints and it allowed me to add a couple of years experience to my CV post qualification, as well as the qualifications – paid for by the company.

  6. Training costs
    Hi Nigel

    Do be careful when trying to instigate this type of policy. I used to work for a sceintific laboratory which tried to bring this type of policy into force.

    The MD nearly had a ful blown mutiny on his hands. In-fact he lost 3 members of staff just for making the attempt.

    It goes against all good practice in so many ways.

    1. Investors in people, with this kind of policy no chance.

    2. Contracts of Employment, probably goes against any covenants that are attached to the contract.

    3. Takes away all loyalty of your staff. They just feel that you want money and not looking after them.

    I could go on, but I guess you catch the drift. By the way the policy was abandoned in my company after the near mutiny and loss of staff. Staff by the way would not come back even after the policy was scrapped.

    Cheers for now

    Tony Harvey-Bacon

  7. Be wary
    My previous employer tried to recoup training costs from me without any contractual procedure and lost a county court case because of it. My current employer asks for a payback agreement to be signed for any course that lasts longer than one day, effectively covers medium/long term professional courses. Payback is 100% if you leave on course start date and drops 10% each month. I refused to sign, arguing that if I’m required to attend training for my role I should not be potentially disadvantaged by a payback clause (what if I leave due to illness or accient?)

    I find the notion of payback fairly disgusting; if training is an investment, just remember that some investments mature and others will falter. If someone ‘uses’ your company for ‘free training’ and then leaves, perhaps its the recruitment and selection policies that need revising rather than introducing restrictive and demotivating payback clauses.

  8. Legal aspect
    Legally, if repayment of training costs has not been stipulated in the employee’s contract, and the employee has not signed an agreement in their contract of employment to repay training costs, my understanding is that it would be unlawful for an employer to deduct training costs from an employee’s salary.

    Deductions from salary are only permitted by statutory provision (generally speaking PAYE, national insurance contributions and attachment of earnings orders and the like) or if the employee has consented in writing.

  9. Questions to be answered
    There seems to be some ‘How long is a piece of string’ type questions that need to be answered. What is deemed to be a reasonable payback period in relation to the Company investment? 1 year, 2 years or a career lifetime.
    Who receives the training and why? Is the training for the benefit of the Company, individual or Company/individual.
    Many years ago an employer encouraged me to go for additional training, the previsor was I paid the fees and if I a passed I got the money back, if I failed I stood the cost. Due to the inflated cost of training now it probably wouldn’t work but it did then.

  10. Some suggestions
    There are some great responses here. The only things I would add are:

    Be absolutely clear about which kinds of training will be subject to a repayment clause. If it’s intented for all training generally, then it won’t work. It creates a risk for employees – why would they want to attend training if they may have to bear the cost of it? Further, if the training was required for the job, you may find yourself on (legal) thin ice if you try to reclaim the cost.

    If it’s intended for those circumstances where non-essential but valuable training and education is provied (eg. where the company may bear the cost of non-mandatory qualifications) then a contract is useful for the company to protect its investment. I understand that it will require an explicitly stated, declining term of commitment, so it’s worth getting your legal department/representatives to have a look.

  11. worse than trained folk leaving?
    If you were going to use any monies returned to train other members of staff then this makes some sort of sense – other than that it can only be viewed as a punishment. If you are set on punishing people for leaving what message are you sending to staff, customers and other publics?

    A smart organisation recognises that it needs highly skilled people, provides opportunities for training, rewards success and will lose good people anyway. And when these people have left they say good things about you.
    A risk-averse organisation puts a price on development, discourages ‘unnecesary’ training and complains that staff are always looking for a better job.

    What’s worse than training people and have them leave? Not training them and they stay!

  12. Thank You
    Thanks to everyone who has commented on this subject,I will take note from all and make a decision. Its great to see so many views on this subject, all have helped me to consider the methods, value, legalities and structures.


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