Fair Or Not? Employer Makes You Pay Them Back For Training Taken?

Every so often, an integrator mentions to me that their employers require them to pay back trainings if they leave.

For example, if the person goes to Milestone or Cisco training and then they leave after 9 months, they will have to pay back a percentage of the training costs (maybe 75% or 50%).

Personally, I think this is nuts, like some sort of indentured servitude program, especially when the training costs thousands and the employee is not making all that much.

Also, it creates crazy incentives. I knew guys who refused to go to training because they didn't want that payback hanging over their heads.

In your experience, how do companies normally handle this?

I can certainly see the employer's point - how would you feel if you paid for an employee to gain valuable skills, only to have them immediately take those skills to a competitor? I don't see a problem with them pro-rating the payback, although to stretch it over a year may be a bit much.

Actually, the concept shares a foundation with no-compete clauses, which are there to prevent a leaving employee from immediately taking their skills, knowledge, and contacts to a competitor within a set time frame (I think the last time I was subject to one, it was six months).

This sounds like something that needs to be included in the employment contract right from the start, though - it's a bit sketchy to spring on existing employees, as it would be if no-compete rules were unilaterally introduced as well.

Matt, thanks. Related: Non-Competes For Integrators: Love 'Em Or Hate 'Em?

The big issue I've seen is that for a guy making ~$50k, if he needs to pay back $1,000 or $2,000, that can be a small fortune, especially if it's not some fundamental skill that he definitely will use in the future.

For example, the company wants you to go to Honeywell access control training because they picked up a large account. They are going to clearly benefit from this, but how valuable is that for you if you leave? Is it worth having to pay them ~$1,000?

Well I suppose that's why it's fair to pro-rate it - as long as you don't leave the minute the training is done, you're not on the hook for the whole amount.

Of course, if the training is really valuable to a new employer (or even if the new employee is that valuable, assuming the training itself isn't transferrable), I suppose it would be worth it to them to reimburse the employee.

Of course, there are a thousand what-ifs we could toss around to argue both sides of who it benefits and who it hurts... on the whole I don't think it's an unfair thing to include in an employment contract, providing, again, the reimbursement isn't held over the employee's head for an excessively long time. I certainly wouldn't want to have to repay the training two years after the fact, especially in a technology field where it may be largely obsolete at that point.

Not mentioned is the practice of giving pre-defined automatic raises on certification. This incents the employee to achieve, while at the same time reduces the likelihood they will bail , though of course at the added expense of the employer. It also can have the somewhat undesirable effect though of making 'book smart', highly paid flunkies, who are actually less competent than others out 'in the field'.

While not related to attrition or turnover, I know there have been several IPVMU students tell me if they do not pass and earn the certification, their employer expects them to repay the tuition cost of the course.

I did not know that. At least ours are vendor independent fundamental training and fairly inexpensive (typically $299 for the course).

That's not uncommon either. My wife's previous employer paid for all their employees' certification training up-front (she works in insurance, where certification is required to do pretty much anything besides answer the phone), but if they failed the course, they'd have to pay for any re-takes themselves. They weren't expected to reimburse the initial cost... but again, in that industry, NOT having certain certifications sharply limited their "usefulness", and ongoing training "points" are required to maintain that certification annually, so that opting to not complete the courses meant you probably wouldn't have a job much longer.

I’ve seen this in the early days of Lenel where a tech would go to New York and get rack up obnoxious amounts training and then leave the company for another buck per hour. To get a guy master level certified takes around 15K – especially when you consider travel and expenses.

Today, they have a pretty cool way of combating that. If the certified employee leaves the company and goes to another VAR, their certifications have to be transferred by the hiring company. The transfer fees are pretty hefty. I believe that my master cert is somewhere around 5K just to transfer (still cheaper than the full deal). Then the manufacture (Lenel in this case) provides the former VAR a credit to be applied to their overall training funds.

Companies offering to pay for boot-camp CCNA or MCSE’s deserve to be screwed by the employee. The classes are worthless to the company paying for them.

Mike, very interesting feedback on Lenel and the transfer fee approach!

Absolutely. I forgot to mention that when you leave, your certifications become void. No tech support etc… unable to claim them on reference resumes… It’s like you were never certified.

Of course they cannot take knowledge…and that is where the real value is.

...unable to claim them on reference resumes...

Are there really people who will not list a certification, that they fully earned, on their resume after being fired? Does the cert. agency pretend like they were never were certified ever? Don't you get to print a physical one?

CCNAs and MCSEs are one thing - they look good on paper but there's not a governing body that says "no no, this person is no longer certified because they changed companies" - as Mike notes, the actual knowledge is what's important.

In other fields, however, you must hold a valid, current certification with an overseeing body to be able to work in the field. The practice of law is probably a good example, where a lawyer must have valid standing with the relevant bar associations. Revoke a lawyer's bar status, and despite his knowledge, skill, or record in court, he won't be allowed to practice. Most fields of medicine work this way as well. Doesn't matter if you have a framed certifcate on the wall.

Actually, I was referring to project references. In my market space, there is a lot of creative “specmanship” going into these specification requirements. Vendor must have X number of X level certified technicians in X region within X number of miles from project site. So unless the certification is transferred, the company is not able to claim that person as a certified tech. I would absolutely claim manufacture achieved certifications on a personal resume. Absolutely.

People are your greatest asset, and at the end of the day it's your responsibility to support and develop them. In a world of commodity, they will make the difference between a 'me too', and a stand-out organization that earns customer trust with their recognized 'value', and excellent customer service.

You would want your people up to speed on the latest trends and technologies, while continuing to develop professionally and personally. A great company (in my opinion) does not ask their people for a do-not-compete, nor would they require training payback (which has clearly benefited both parties), but instead they'd make sure their people were challenged, happy, and see a path to success.

At the end of the day, if you do your job well, you'll have logevity with dedicated happy employees making it extremely difficult for competitors to steal them away. This will come across loud and clear in their interactions with customers, and participation in industry events; which will most certainly be noticed by other top 'resources' who are currently being underutilized, and under appreciated by their employers.

It depends on the training. If it is training that the company requires, such as Manufacturer product training, we pay it. We require it, we pay for it. If they leave, well, tough for you. If it is training that the employee is not required to get, such as NICET, we pay for it after he passes the course. Written policy.

Mark, good approach, thanks for sharing!

I agree with Mark, and that's how companies I've worked with have handled it.

I do believe in some cases employees owe the company something. At my last place, one Audio Visual engineer had the company pay thousands to get his CTS-D, which is a pretty well respected design credential in that industry. About two months after he got it, he told them he was leaving. They asked for him to pay him back.

Now, nothing was in writing, so he didn't technically have to, but he also couldn't see why people thought he was sort of an ass for doing this.

On the flip side, my first employer wanted me to sign a two year contract for a $500 training on some phone system we rarely sold. Hell to the no.

Happens with distributors as well. We got bought over by a bigger company 3 years ago and that's the policy now. First prize is to get the vendor to pay for the training (which happens more often than not for distributors).

There are various other things larger companies enforce which smaller ones don't. Whether it's fair or not probably depends on your mindset and motives.

Personally I have no qualms if a company requests that I do service for x amount of months to make up for expenses on training/education I requested in a personal capacity. When the training is required as a function to fulfill my job I find it less fair - especially if you're not allowed to move into a similar position at a different company.

Do you make the technician pay for the electric tape and screws they use? How about depreciation on the drills and ladders?

If the company benefited from having a certified employee, either by being able to bid on a job or by the employee being able to better perform their job because of their increased knowledge, then the company got a return on their investment, even if it isn't as big as they'd hoped.

If the employee quit with no notice the minute they walked out of training, I could see the company trying to go after the tech for the cost of training, but not otherwise.

Ari, in fairness, the employer argument is that training, unlike tape, screws or ladders is something that goes with the employee. If the employee quits, he returns his laptop, phone, etc. unless he's unethical. But the employer can not remove the knowledge from the employee.

I am not arguing for this practice, as I've explained above, but I do think the employer will focus on the training being an asset that the employee 'takes' with him/her when they leave.

I think the employer would be have to pay an already certified technician more in wage/salary than one they have to train so it seems the employer is going to have to pay for certification one way or the other. If they see value to thier company in having certified techs (and I think there's no question there is value in that), they should have it factored in as a cost of doing business. Then, establish a company climate and policies that encourage employees to stay with the company. In my experience, while wage is one of the issues in losing good techs, I hear more often that it has to do with a perceived lack of respect, ability to have meaningful input into daily operations, opportunity for advancement, stability of the company etc. I've seen a lot of very good technicians leave companies I've worked in for these reasons and offering them $1.00 hr more wasn't enough to change thier minds.

Try this. My employer not only pro-rates the training over year but also includes the cost of your salary for the duration of the training. So if you take a $500 course for a week they tack on a week of salary as well.

B, can you elaborate?

So you have to pay back the salary for the work time you attended you training if you leave?

If you leave yes.

So imagine the training cost is $1000 for a week. Then your salary is $2000 for that week. They consider the cost of the training as $3000.

Oh boy, that's crazy...

With that type of mentality I'm surprised they don't 'ding' you for the hours billed that they lost while you were in training...

Please do not give these people any ideas...

Btw, in the poll above, 52% of integrators think this practice is fair while 82% of manufacturers think it's unfair.

Quite a huge difference in perspective.

This conversation blows me away. First let me say that I have fallen under this type agreement when I was a field tech and today (as an owner) I have the agreement in place with my employee's.

Training staff (field or any other) is not a charitable act. As an owner I spend money so my staff can be taughted new skills. These skills will be something they can take with them to any future posistion. These skills willl directly effect their future value, but again it is not charity. It is at its heart a very simple contract.

So why as an owner to I spend so much money on training? So that I can also utilize that skill! To untilize that new skill though I need two things, time and interest.

I need the employee to have enough interest to participate in the learning process. Enough to practice this skill and become proficient. Last enough interest to share this skill with coworkers.

The other item I need for this contract to be fair is time. I need the employee to stay with my company long enough to practice, become proficient and share this new skill. A year is not long enough to do this for most skills but frankly our society dosen't feel that a longer period is fair to the employee (except of course in the exceptions I mention below)

If an employee doesn’t give me their interest or time then they simply are not living up to their end of the bargain. In its most basic form they have broken a contract with my company and should have to pay for part (if not all) of the training.

In the case of our company we pay for training in full as long as you get the equivalent of a “B”. If an employee gets a “C” the company only pays for 90%, “D” we pay for 80%, and if you fail the program we will not pay a penny. This simple system helps to assure the employee does their part by maintaining interest during the training.

After training is done the employee needs to stay with us for a year. If the employee leaves by their choice then they owe the company the full value of the training. Simply put they can take the training and use it for the rest of their lives but they owe for it.

In closing let me say that I did not make this system up, I borrowed it from my first employer. The United States Army. Every one of our military branches have a similar system. You might also find that there is another contract simular to this in marriage.

I am not sure how anyone can say it is unfair.

Robert, thanks for sharing. It's great to get your experience.

For training, do you treat all types the same? For example, above we have been differentiating general training from product training. For example, if you train someone in general computer networking, it seems fair to expect them to pay back or stay some time. But if you train them in a specific product you are selling / supporting (say DM DVRs), it seems less fair to expect this, as it has high value to the employer but low to the employee for future jobs (i.e., not a lot of companies demanding DM DVR techs). What do you think about that distinction?

Doesn't seem unfair, since its just an understanding agreed to by both parties at wiil.

I have the agreement in place with my employee's.

Is it a written agreement signed before each course or a blanket one signed at hire?

Considering the costs of some programs, just pocketing the employee earned arrearage (unpaid pay period, unused vacation etc.) might not cover the costs. Have you actually ever had to make someone write you a check?

After a year do you typically give them raises commensurate with their new skills, so as to retain them?

Marriage 'contracts' on the other hand are notoriously weak and easily (in most cases) broken by either party. Many a man has married and become house-trained (at great expense), only to break such a contract and take his 'skills' elsewhere without repaying anything. ;)

@John Honovich

"For training, do you treat all types the same?"

Yes, frankly I think specific product training can be very valuable for an employee's future. I know that, in our market at least, finding someone that can work with a particular type of fire panel or access control system can be very valuable. Further I think that vendors do understand if their training has great value or not, so often for dated produts training can cost very little so the employee is responsible for a much smaller amount.

@Rukmini Wilson

"Is it a written agreement signed before each course or a blanket one signed at hire?"

Yes! What I mean is there is language in our employee manual (that every employee gets, must read, take a test about and sign acknowledging they have read). Then before every class an employee reads, signs and dates an agreement concerning training.

"After a year do you typically give them raises commensurate with their new skills, so as to retain them?"

Kinda! See we have a certified apprenticeship program that I wrote. Our field staff knows exactly what training they must take for their next pay increase. For other staff we do yearly goals (including training) and they get increases based on meeting those goals. Some training is simply a job requirement, you need to take the training if you want to continue in your current or new posistion.

"Considering the costs of some programs, just pocketing the employee earned arrearage (unpaid pay period, unused vacation etc.) might not cover the costs. Have you actually ever had to make someone write you a check?"

This is a great question. Answered simply yes, but let me explain. After a tech leaves we inventory their truck for the last time. Training is only part of their obligation at times.

They don't get to keep the truck either? So that's where 'slammers come from... ;)