Tired of New Employees Abruptly Quitting? Here’s a Novel Solution for Recouping Your Training Costs

One of the most costly and infuriating aspects of running a business is training new employees only to have them up and abruptly quit. It takes a lot of time, effort, and extra expense to onboard new hires and get them familiar with practices and procedures. When they depart shortly after their training, it means having to fill that position all over again. Since this is such a huge hassle and a costly one at that, some companies are actually billing employees who quit. The strategy is to ensure new employees don’t receive critical industry training only to leave and use their new skills at a competitor paying higher wages and/or offering more enticing benefits packages.

Companies Recovering Employee Training Costs through TRAPs

Healthcare, retail, trucking, beauty, and more companies are adopting a new approach in order to reduce their workforce losses. Known as Training Repayment Agreement Provisions or TRAPs, these clauses are included in employee contracts. Nearly 10% of all American companies are now using these provisions, according to a recent report by Reuters News.
When a valued employee quits, the loss can have a detrimental effect on the person’s team and department and maybe even on the entire company. Not only can an unexpected departure lead to lost revenue, but it also could lower the morale and productivity of remaining employees. —Society for Human Resource Management
Other industries may follow this emerging trend if it proves successful and legal. There are already federal and state government agencies looking into the practice, and it appears to be legitimate. If it continues to grow in popularity, it should be not only a big benefit to businesses but to employees as well, as both parties will know precisely what’s expected of them and how to proceed accordingly.

How to Use Employee Training Repayment Agreement Provisions

Because this is somewhat new, it’s very important to take thoughtful, measured steps in order to implement such a practice. Here are some suggestions for how to use an employee training repayment agreement provision in your business:
  • Consult a labor law attorney. The very first thing you should do is to speak with a lawyer who specializes in labor law in your state. Even if a future employee willingly signs such an agreement, there may be something on the books that does not allow you to enforce such a provision. So, be crystal clear it is legal and actionable in your state.
  • Speak with your human resources department. Obviously if you are able to include an employee training repayment agreement provision in your hiring contracts, you’ll need to get the right people in your organization on board and in the know. You can help to develop a new section in your training process that discloses and advises potential hires and new team member about this provision.
  • Make sure new hires are made fully aware of the provision. When you’re recruiting someone new to your organization, be sure this is made abundantly clear before you proceed with follow-up interviews and probably before the very first, initial interview. Any job candidate should be made aware of this provision well before you get deep into the hiring process.
  • Include a mechanism to recoup new employee training costs. Of course, you’ll need a way to actually recoup those training costs. So, if you offer a sign-on bonus, that may be one way to recapture the expense. Here again, you’ll need to consult an experienced, licensed labor law attorney in your state to establish a recuperation mechanism for the provision.
What else would you suggest business owners do to deal with new hires who quit shortly after being brought on? Please share your thoughts and experiences so others can benefit from your input! Interested in learning more about business? Then just visit Waters Business Consulting Group.

Like this article?

Share on Facebook
Share on Twitter
Share on Linkdin
Share on Pinterest

Related Posts

Business stock photo

If You’re Too Nice, You’ll Hurt Your Business, Here’s Why

Just be nice. You’ve heard it from your mother. You heard it in kindergarten (and through school). It’s on tee-shirts and bumper stickers. And, it’s good advice, for the most part. But, it’s a recipe for disaster when it’s always your default disposition. Sure, you should be nice to people as it’s the polite thing to do. But, being too nice will cause all kinds of unintentional issues. Read on to see why. How Assertiveness can Hurt You On the flip side, being too assertive can also be quite harmful. Don’t get the wrong impression. You do need to be assertive, just at the right “temperature.” If you are too assertive, you’ll come across as overbearing. And, downright mean, in some situations. People also might think you too coarse and possibly aloof or antipathetic. Leaders are placed under a tremendous amount of pressure to be relatable, human and … nice. Many yield to this instinct, because it feels much easier to be liked. Few people want to be the bad guy. But leaders are also expected to make the tough decisions that serve the company or the team’s best interests. Being too nice can be lazy, inefficient, irresponsible, and harmful to individuals and the organization. —Havard Business Review Assertiveness can also be taken as overly self-serving. Basically, it’s an attitude that can easily come across the wrong way in more ways than one. Although, assertiveness does have a purpose and when it’s used strategically, it’s highly effective. That’s because striking a balance gives you the best of both worlds and a positive perspective. Which ultimately helps you to see things more clearly and make better decisions. Top Ways being Too Nice is Harmful Conversely, being too nice, is at best, problematic. It creates illusions that simply can’t be sustained. In essence, it’s a false impression, even if you’re being genuine. How? Well, here’s how being too nice is harmful in business: You project weakness. When you’re overly nice, you’re perceived as a pushover. It’s that simple. People who have this impression will try to take advantage, when and where they can. And, that sets-up a bad scenario. You attract the wrong people. Another problem with being too nice is that it does attract the wrong sort of people. Some others will take this as a green light to burden you with their own problems. Which means, you’re inviting unnecessary stress and drama into your life. People might feel distrustful. Niceness can bring out negative feelings in others you interact with. For instance, someone could sense you’re actually concealing your true feelings and merely putting up a front. So, they manifest a sense of distrustfulness. You bias your own expectations. When you’re constantly nice, you might make others feel better. But, you’re also inadvertently warping your own expectations, thinking everyone else should treat you the same. How do you balance being courteous and polite with also being assertive? What other advice would you offer? Please share your thoughts and experiences! Interested in learning more about business? Then just visit Waters Business Consulting Group.

Read More »
News photo

Here’s the Most Important Takeaway from the Trump ZTE Fiasco

ZTE who? What? Wait just a moment. There’s headlines all over and most Americans don’t know what to make of the situation. In fact, it’s a bit confusing since it deals with a very boring subject. But, it’s really not that difficult to understand. Ostensibly, it’s the result of bad business practices, and it’s causing real-world consequences for a very large company. At the most basic level, it delivers a great business lesson, which many entrepreneurs would otherwise avoid. It’s an uncomfortable topic but it’s also a never-ending threat — complying with the law. The Trump, ZTE Fiasco in a Nutshell Of course, very few business owners intentionally break the law. However, this doesn’t mean it’s not possible to accidentally cross the line. (In fact, it’s entirely possible to inadvertently make a mistake, only to realize it when it’s too late. After all, there are so many laws, it’s nearly impossible to always be in-the-know, all the time.) Basically, the Chinese company, ZTE, sold its products to Iran and North Korea. Now, what triggers the trouble is the fact those products contained American-made components. Today’s business owners have a wide array of concerns, not the least of which is turning a profit in what can be a volatile economy. However, financial success is of little consequence if the government compels you to dissolve your company for failing to comply with legal requirements. —Intuit Quickbooks The net result is a colossal fine of $1.19 billion. Yes, “billion, with a ‘B.’” That’s the cost of violating trade agreements and it’s one which will surely make every international company take notice. But, such a financial penalty will put ZTE out of business. That’s where the controversy comes into play. What to Do if Your Business is Out of Compliance Now, let’s look at the core lesson here — operating a business within the confines of the law. Sure, breaking the law is not something you set out to do. Although, this doesn’t mean it can’t happen. If it does, here are some helpful suggestions for how to deal with a compliance issue: Don’t try to hide it or ignore it. Whatever you do, don’t attempt to hide it or ignore it. The problem won’t magically go away. It will only worsen and that’s much more damaging. Face it, apologize, ask for forgiveness, take responsibility and do so humbly. Get sound legal advice, right away. If your business does break a law, it’s not necessarily the end of the world. Sure, it’s definitely unpleasant and uncomfortable. But, that means it’s time to tackle it head-on, as soon as possible. Speak with a lawyer, if necessary to learn about your options. Openly address the situation carefully. Chances are excellent your team members will learn about it at some point. Do yourself a favor and address it pragmatically. Just like when you fire an employee, there will be questions and you have a duty to provide answers. Learn from your mistake and move on. While it’s a bad experience, that doesn’t mean it’s worthless. Take the opportunity to learn from your mistake and then put it behind you. Have you ever experienced violating a code or law? What other advice would you offer about learning and getting past the experience? Please share your thoughts by commenting! Interested in learning more about business? Then just visit Waters Business Consulting Group.

Read More »
Coronavirus illustration

Coronavirus Presents an Opportunity to Teach Your Children about Business

The Sword of Damocles tells a very important story about the stark reality of being in a position of power. For those unfamiliar, Damocles is a court sycophant or flatterer, who pines for the power of King Dionysus II. The king gives his throne to Damocles, who in-turn enjoys fine food and drink, opulence, and entertainment, only to be surprised by a razor-sharp sword dangling over his head, held in-place by a single horsehair. In an instant, Damocles learns power comes with a price. That every leader is under constant threat of being replaced or worse. Crisis can Turn into Opportunity A pandemic was probably the furthest thing on any business leader’s mind prior to the outbreak of COVID-19. Now, hindsight being 20/20, it’s easy to see the sword comes in many forms. And, it’s a great time to teach your children about the inevitable ups and downs of owning and running a business. By becoming an entrepreneur — whether it is simply putting up a neighborhood lemonade stand, launching a landscaping business or developing a new app — kids can learn about budgeting, saving, spending and investing. —CNBC.com You can teach many lessons by having your kid(s) start and operate a small business. But, as we adults know, failure is where the hard but necessary lessons lie. Use this crisis to show your children how to cope and face adversity. It’s a terrific time because there’s no shortage of awareness about the outbreak and quarantines. Meaning, there’s a lot of context and therefore, makes it easier to use real-world examples. Three Lessons the Coronavirus Business Owners can Teach their Kids The moment we’re all experiencing as business owners, managers, and team leaders causes us to question a whole lot of things. And, that’s not a bad thing, especially when it comes to teaching business lessons to children who can later use that information. Here are three important business lessons entrepreneurs can teach their kids: Debt. Everyone knows the risk accumulating debt carries. But, it’s so commonplace, we just don’t appreciate how dangerous it can be when things go wrong. While debt is very often used by companies of all shapes and sizes, when there’s a disruption in the economy, it remains an obligation that can’t be ignored. Debt is sometimes necessary but when it’s used in excess, it can financially ruin a business and even personal lives in a devastating way. Hard choices. Another important lesson to teach is about having to make tough decisions. Being able to evaluate the circumstances, choose essential personnel, and identify where cuts can be made certainly isn’t easy. But, it’s a wonderful life lesson to relate that will make a life-long impression. Streamlining. Call it identifying redundancy or creating efficiency. If you take an honest look at everything inside your business, you’re going to find unnecessary duplication or just flat out waste. Use these examples and make them relatable on an age-appropriate level. What other lessons would you add to this list? Please share your thoughts and experiences by commenting! Interested in learning more about business? Then just visit Waters Business Consulting Group.

Read More »

Imagine Selling Your Business…

How Would Your Life Change?

You didn’t start your business just to stay busy—you built it to create freedom, security, and options for yourself and your family. Selling your business can be life-changing, but the real question is whether you’re intentionally building toward that outcome or simply leaving it to chance.

Sign up below for a free consultative session to learn what your business could be worth today and in the future! 

Thank you for your interest in learning what your business is worth. We will be in touch shortly.