Can we make employees pay for quitting?

On September 30, 2019
Can we make employees pay for quitting?

In the October 1, 2019 Ask The Headhunter Newsletter an HR manager complains about the cost of employees quitting right after they complete training.

Question

quittingCan we charge new hires a penalty when they quit and leave us short-staffed? Can an employer state in an employment contract that if the new hire does not stay for a certain number of days, we retain the right to withhold $X to reimburse us for the time we spent training them? This Generation X and their job-hopping is costing this hospital tens of thousands and we are trying to find ways to teach them – work or lose money. Use us – lose money. We’re having a tough time with it. I did research. You came up.

Nick’s Reply

It’s troubling that any employer would ask this question, but even more troubling that you signed your e-mail with PHR after your name, which means you’ve passed the test for a Professional in Human Resources certification. Really: GenX is costing you money?

I’m not a lawyer. I suggest you reach out to a good employment and labor attorney for advice. However, my guess is that an employer can include any terms it wants in an agreement as long as they are not illegal. After all, no one is required to sign it. The question is, do you — a PHR — really want to go there?

Costs of training and quitting

Now I’ll give you my opinion: An employer should never require reimbursement for its time training new hires. It’s part of the investment we make in people. (This is different from a company offering paid education benefits – e.g., cash to help earn a degree relevant to the job. Education benefits are optional and usually granted under a separate written agreement.)

Quitting is an overhead cost. Not all people will stay, and you can’t make them pay you. Training on a new job, new skills, and time to come up to speed are all components of compensation — all of which they get to keep.

Training is part of what entices a person to accept a job. Who wants to make a move to a job that’s not going to improve their skills, knowledge and expertise – not to mention pay? (Some people will wisely trade higher salary for training and new skills. But in this market, I think they know they can expect both!)

If you don’t see my points, try this: Advertise jobs that require applicants to cover their own overhead costs. Tell them they must pay for training if they get hired. Lotsa luck.

The training investment

Training its employees is how every company helps improve and develop the overall worker pool. It’s an investment in the economy that everyone benefits from, even if in some instances it causes a loss due to worker mobility. If every company insisted on “owning” the training and experience it gives to new hires, how would the labor pool keep up with changes in technology? More to the point, how would you attract the best workers with nothing more than salary?

Of course, you should not hire anyone that you suspect plans on quitting after training is done. (I don’t think many job seekers play that game. More likely, some other factor is making them move on.) But it’s HR’s job — and the hiring manager’s — to assess and judge job candidates. Are we ready to take a risk with this particular candidate?

There are of course no guarantees to any business decision. Or, for that matter, to personal decisions. For example, can we get our money back if we decide to marry someone that decides to move on?

Who pays for quitting?

Your job in HR is to make good judgments and hiring choices. If the new hire quits too soon, should your pay be docked? Should the hiring manager’s pay be docked?

Let’s take this to the next logical step. If a new hire isn’t as productive as expected, should a company be able to recover the difference from them as restitution for lost profits? Where does this end?

You asked whether an employment contract might be the solution, by making reimbursement explicit. But, are you really prepared to give new hires an employment contract? Unless it’s for a C–suite position, I doubt it! If you in fact use employment contracts for all your hires, then I say more power to you – and include any terms you think you can get away with! Just remember that sound contracts are designed to benefit both parties. (See Employment Contracts: Everyone needs promise protection.)

For example, I’d advise any job candidate to consider signing your contract only if it includes compensating terms. For example, the hire will agree to reimburse you for training only if you agree to a severance package of $X if you terminate the hire at any time for any reason other than “cause.” Seems fair, doesn’t it? What fault of the new hire’s is it if your management team makes decisions that lose money and force a downsizing? Shouldn’t you be on the hook for the hire’s lost income?

Competitive edge

Quitting and job hopping are symptoms, not the problem. The problem is jobs and employers that don’t satisfy workers. People hop because you’re not being competitive. Your competition offers them a better deal that might include new skills and training in addition to higher pay. That’s why we refer to it as a job market.

Consider this analogy: If your company’s customers “hop” to a competitor that offers a better product, whose fault is it? Or, is it actually a signal telling you to improve your product? I suspect that other problems are triggering employees to hop after they complete training at your company. Your competitive edge is understanding why people stay.

Your assumptions may be the problem

I appreciate your company’s difficulties, but I think your attention is misplaced. Peter Cappelli, a labor researcher at the Wharton School, suggests that employers themselves own the problems they blame on workers. (See Why Companies Cannot Find the Employees They Need.)

The “talent shortage,” says Cappelli, is actually a problem of affordability. Employers are not willing to pay market value for the talent they need. (Just look at the paltry increases in pay reported by the Department of Labor, in a time when unemployment is low and demand is high.)

More relevant to your question, Cappelli’s findings suggest the real problem is a “training shortage.” Attracting and keeping good workers may be more difficult today because employers have drastically cut their investments in training and employee development. Employers seem to insist on “just in time labor” – people who’ve done the job for five years, already possess the requisite skills, and are willing to do the same work for a new employer for less pay. But who aspires to such an “opportunity?”

Your organization is doing the smart thing – providing training. But I think your assumptions may be incorrect. My advice is to offer training without a catch, then make sure something else isn’t triggering quitting. Use training as an enticement to attract the best workers. But also look at the other factors that help you keep your new hires. I’m not going to tell you what they are. You should figure it out and act to keep your employees happy. Isn’t that what HR’s job is?

I see you sent your e-mail after you viewed the Talk to Nick section of my website. If you’d like to schedule a consultation, I’d be glad to talk with you.

I wish you the best.

Who owns what you learn at a job? Should employers be able to recover employee training costs? Should you ever be penalized for quitting? Do job-hopping GenXers need a lesson?

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Should I let HR do it?

On September 23, 2019
Should I let HR do it?

In the September 24, 2019 Ask The Headhunter Newsletter an entrepreneur wonders if HR is necessary at all.

Question

HRI am starting a company. I have an absolute disdain for HR as a general rule and wanted to get your thoughts on a company running without an HR department. I feel like HR has hoodwinked so many executives into thinking they’re a necessity for any business, but there’s only a subset of things they do that are actually required. For example, making sure you’re not in violation of labor laws.

Which would you recommend: to have no HR department, or to severely limit HR to only those responsibilities that actually help the company (and hence reduce its size considerably)? One thing is sure: HR should never be involved in hiring decisions. I’ve never seen them help there.

Nick’s Reply

Good luck with your start-up. I’m sure HR folks will have something to say about this.

HR options

I think I would try a hybrid of no HR and limited HR. You can cover the compliance bases by contracting with a good HR consultant and by defining exactly what you want them to cover. But be careful – there are a lot of HR hacks out there. The good ones, however, will cost you and are worth what you’ll spend because they’ll advise you as well as do the work.

I understand why you’re so down on HR — you feel it’s not very helpful. You’re not alone — see FastCompany’s excellent Why We Hate HR. Make sure your HR consultant understands that they will have no decision-making authority, that they report to you, and that their scope of work is narrowly defined. Use them as you need them, just as you’d use any good consultant.

Limiting HR

If you find an HR consultant that’s actually good at recruiting, interviewing and managing the hiring process, you’ll be really lucky. There are some very good HR folks out there who work closely with managers to get jobs filled. They will embed themselves in a manager’s operation to learn how it works and what makes the manager tick. A good HR person will help the manager recruit and hire — but will not do the recruiting or hiring. They will process documentation and ensure the process is compliant with the law.

I think you can take care of important HR functions with just a good consultant for quite a while before you need to worry about hiring a full-time HR person.

HR & Legal

Keep in mind that many HR responsibilities are legal in nature, including  compliance. If you hire lawyers to advise you, make sure they have labor and employment expertise so they can backstop your HR consultant when necessary. Just be careful not to let the lawyers and HR gang up on you and rack up huge bills — or hobble your ability to run your business!

There’s a good, simple rule for managing HR, lawyers and other experts. Explain to them what your objective is; that is, what you want to do. They will often respond with myriad reasons why you mustn’t do it, or why it’s illegal, or why it won’t work. Thank them for their advice and cautions. Then instruct them to find a way to do what you want without violating the law, because that’s their job. If they push back, tell them to also provide you with a risk analysis, because that’s their job, too. Your job, as the principal of the company, is to decide how much risk you want to take — legal or otherwise. Never let a consultant make your decisions for you.

Do it yourself

I agree that HR should not control recruiting and hiring. (See Why HR should get out of the hiring business.)

I think the most important reason to limit any HR function is that being directly involved will force you to understand, grasp and grapple with the challenges of having others working for you. I’ve seen many companies fail because management left that to “experts.” So don’t “let HR do it.” Your people — your workers — are everything. They are your responsibility. The idea that someone else will manage your new company’s “human resources” is akin to suggesting that someone else is going to run your business. Perhaps that’s your goal ultimately, but until you learn the ins and outs of finding, hiring and managing people, you won’t have a business. (See Hiring Manager: HR is the problem, you are the solution.)

An HR function can be helpful if you, as head of the company, manage it like companies used to manage HR — actively. The trouble today is that HR is often left to its own devices because the C-suite sees HR functions as “icky but necessary, so let HR do it…”

Big mistake.

I wish you the best with your new business.

Can a new business operate without an HR department? If you could build an HR department from the ground up, what tasks would you have it handle — and which tasks would you never let it control?

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What brilliant interview questions should you ask employers?

On September 20, 2019
What brilliant interview questions should you ask employers?

Impress a Potential Employer In an Interview With These 3 Unexpected Yet Brilliant Questions

Source: inc.com

Although most candidates fear off-beat interview questions… they help interviewers better understand how candidates think and help assess for cultural fit… Here are three nontraditional questions that you should ask before signing on the dotted line:

1. How important is the company mission statement?

interview questionsWhen we don’t understand our company’s greater purpose, we view work as an item on a to-do list–a means to an end — and don’t feel motivated.

2. What are the best-run meetings here?

If your interviewer is able to describe meetings that have a clear sense of purpose… it’s a sign of a healthy meeting culture and that meetings serve a greater purpose than as a time sink.

3. Can you describe your relationship with the custodial staff here?

Asking your interview to describe his/her relationship with custodial staff can be a powerful and subtle means by which to assess overall levels of organizational justice.

 

Nick’s take

The problem with these “brilliant” interview questions is that they are indirect and too clever. They don’t get to the truth you need to judge an employer. I like Inc.’s #2 question, but I think the best questions you can ask in job interviews are about the work, the people, and the money.

  1. What’s the problem or challenge you’d like me to tackle if you hire me? I’ll show you how I’ll do it.
  2. Can I meet people upstream and downstream from this job, so I can see the quality of their work and cooperation?
  3. So, what’s the pay like? (Ask early. Save time.)

I like questions that prove you can do the work and help you decide whether you want the job — or further discussions.

What’s your take?

  • How do you rate the Inc. interview questions?
  • What are the dumbest questions that have been recommended to you?
  • What are the best questions you ask employers during your interviews?

 

 

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I want a live, breathing, credible headhunter

On September 16, 2019
I want a live, breathing, credible headhunter

In the September 17, 2019 Ask The Headhunter Newsletter a reader is looking for the good headhunter in hiding.

Question

How do you find a live, breathing, human and credible headhunter? Internationally? Nationally? Regionally? By State? The top “brands” of executive recruiters are as much of an abyss as job boards. Submit a resume, try to contact them directly — best of luck. Where are the “old school” professional headhunters that are proactive and follow up?

Nick’s Reply

headhunter

I’m afraid you’re dreaming of the good old days in your imagination, my friend. Good headhunters don’t do what you are looking for — and never have. They don’t find jobs for people. They don’t really want unsolicited resumes. They’re busy working on specific assignments to fill specific jobs. If you’re a good candidate for such an assignment, they will find you. That’s what they get paid for.

Headhunter =

Headhunter=“Head” + “hunter.” They hunt. They don’t gather resumes or candidates that come to them. That’s the good headhunters. You may be confusing them with the rest of people that call themselves headhunters. (See How to Judge A Headhunter.) The reason it might seem harder to find good headhunters today is that the explosion of online recruiting has spawned innumerable spammers calling themselves headhunters.

Like Human Resources (HR) people, 95% of today’s so-called “headhunters” aren’t worth spit. They’re keyword pushers dialing for dollars. They spam e-mail lists with “job opportunities,” pitching jobs to people they know nothing about. That’s not “searching” for the right candidates. That’s dumpster diving, and — as you suggest — it’s usually not done by humans anyway, but by spambots and algorithms. (See Suzanne Lucas’s excellent Inc. article, When a Headhunter Makes His Profession Look Bad.)

How to find a headhunter

The best way to find a good headhunter is to call the president, CEO, or manager you’d like to work for and ask what headhunter they use to fill key jobs. It’s the best way to get a credible referral — but even then, it’s no guarantee the headhunter will respond. I discuss this in depth in How to Work With Headhunters… and how to make headhunters work for you. This PDF book will tell you loads more about how to work with headhunters, how to vet them in detail – and how to avoid the charlatans.

The few good headhunters out there are worth their weight in gold. But one thing: The odds a headhunter will place you are tiny. Find your own job. That’s what the rest of this website is about.

The reader responds

I’m the President & CEO. Calling the manager is somewhat difficult.

Nick’s Reply

You didn’t say initially that you are a CEO or President. The odds are much higher that a headhunter would handle the search for such a role. But the idea is the same.

Where a headhunter looks for candidates

Headhunters are not likely to find you in their e-mail. That’s not where they look for good candidates, because there’s no more credibility in random incoming resumes than there is in the random e-mail solicitations people receive from spammers.

A good headhunter wants high-value referrals from business people he or she knows and trusts — the headhunter goes to them, not to the e-mail box. At your level, the searches they conduct are usually done quietly and confidentially. If you’re a good candidate, they will find you.

The board of directors

The suggestion I offered about how to find a good headhunter is still the same, but a C-suite executive would talk to members of boards of directors. This is actually more productive at your level, because board members often serve on multiple boards and have more and better connections — not to mention insights about opportunities. Ask them what headhunters they like when they need to fill a C-suite job. Their headhunter isn’t likely to help you directly, but might be a good conduit to a headhunter that’s working on a specific, relevant position.

What I’m really saying is that a good headhunter will find your name on the lips of other respected executives in your industry — because that’s who they’ll ask for candidate referrals. It’s better to invest your time being a respected and known member of your professional community than to chase headhunters. (See Shared Experiences: The key to good networking.)

How many good, credible headhunters do you know? Did you find them, or did they find you? How? What advice would you give to this CEO?

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Will new CA law kill your job and Gig Economy?

On September 11, 2019
Will new CA law kill your job and Gig Economy?

A controversial new law in California is widely referred to as protection for Uber and Lyft drivers in the “Gig Economy,” but it makes no references to ride-sharing services — and certainly isn’t limited to one industry.

 

California’s controversial labor bill has passed. Experts forecast more worker rights, higher prices for services

Source: usatoday.com

Gig Economy

A controversial piece of legislation passed the California Legislature late Tuesday evening, codifying and clarify a landmark state Supreme Court decision that limits whether companies can classify their workers as independent contractors.

Expected to have wide-reaching implications that resonate across the country — including posing an existential crisis for businesses built with independent, on-demand labor — the bill is now on its way to Gov. Gavin Newsom’s desk.

“This is one of the few times in recent history when so many people will be impacted by a single decision,” said Ryan Vet, an entrepreneur, and gig-economy expert who founded Boon, an on-demand health care platform. He said he sees positives and negatives in the new law, that is “good for the workers, but will also implode the gig economy as we know it today” with increased costs.

 

California Assembly Bill AB-5 will certainly trigger similar laws nationwide. The emphasis seems to be on the ride-sharing industry, but it affects everyone working as an “independent contractor” in any part of our economy.

What’s your take?

  • What jobs will AB-5 really affect?
  • How will it affect employers and consumers?
  • Is AB-5 a gift to third-party “contracting firms” that hire and rent Gig Economy workers to employers?
  • If this law is cloned in your state, how will it affect you?

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Should I tell employers I don’t have a smartphone?

On September 9, 2019
Should I tell employers I don’t have a smartphone?

In the September 10, 2019 Ask The Headhunter Newsletter a reader asks whether a smartphone is a credential.

Question

smartphoneThese days it seems so many companies expect you to use your personal smartphone for company business. I do not have a smartphone and worry it will impact my job search.

I have a basic flip phone for a variety of reasons, including what was basically a smartphone addiction that impacted both my mental and physical (neck strain) health. I am so much happier now with the simplicity of a basic phone, but worry potential employers will think I’m a Luddite. I’m not. I’m used to working in front of a computer all day, but I really don’t want to buy a personal smartphone for work, nor do I feel I should be required to do so. I am not expected to bring my own personal computer or desk chair to work. Why should I use a personal phone for my professional life, especially one where I’m in an office all day?

Should I disclose this to potential employers, and if so how?

Nick’s Reply

This is a bit thorny because we’re on the tail end of our society transitioning into a highly connected state. Most people want to be connected, so employers naturally assume you will be, too.

Is a smartphone part of the job?

It’s almost an unwritten point in every job description that you will be available via your mobile device, and it’s probably assumed you’ve got a smartphone. Many companies have mobile apps not just for their customers, but for their employees, so they can conduct business more efficiently.

Don’t use company technology to store personal information. Tip: If the laptop and phone belong to the company, so does what’s stored on them. One of my HR friends tells me her IT department cannot selectively return e-mail or phone data that belongs to an employee.

From Parting Company: How to leave your job, p. 71

Some employers provide “work phones” to employees that really need them. Others provide a stipend that pays for your personal smartphone service since you’re expected to use it for work. (Keep in mind that if you accept a company phone for work use, everything stored on it is company property, and that your personal phone’s privacy could be compromised if you agree to use it for company business.)

So a smartphone is sometimes a necessity at work.

If your job description does not include an explicit requirement that you have your own smartphone, is it reasonable for fair for your employer to expect that it is implied?

Is the job 24X7?

Now we run headlong into a far bigger issue: What part of your time and attention does your employer have a right to, and what parts are they paying you for? Is it just the eight or so hours you’re bound to your office? Or does it include evenings and weekends across time zones if your company is global? Do you have to be available to talk to customers and respond to your boss 24X7?

Is it reasonable or fair that your employer require you to be available at any time, even after regular work hours?

Just a few decades ago the first widely-used mobile communication device was a beeper. It was a purely one-way device with a tiny display, clipped to your belt, on which you’d receive a phone number, and a beep to alert you. Your job was to respond by calling the number on a landline. It’s how you could be reached anywhere at any time. Beepers became very popular with doctors, who had to be available for life and death matters, and with IT technicians, whose employers’ contracts with customers guaranteed almost instant technical support even in the middle of the night.

With the advent of beepers, IT technicians starting a new job were shocked to learn they were expected to wear one at all times. This led to “beeper disclosures” on job descriptions so you’d know what you were getting into when you took such a job. I know many IT workers who wouldn’t even consider “beeper jobs.”

Make your own rules

So let’s go back to our two questions: Should a job description have to disclose that you’re required to have a smartphone, and that you’re expected to conduct business at any time of day?

An HR friend of mine says, “Are you kidding? If you don’t have a smartphone, how smart can you be?” On the other hand, a highly paid financial consultant I know will receive texts and e-mails from her boss on weekends, but will not respond to them until Monday morning. Another friend relishes being able to work any time, anywhere. So, where does this leave you?

I think you have to establish rules for yourself when you apply for jobs, but that doesn’t mean you must lead with a disclosure about your flip phone.

  • What technology of your own will you contribute to your job?
  • At what times will you be available to your employer?
  • How and when will you disclose your rules?

When to speak up

During the interview process, I wouldn’t disclose anything about your type of phone unless you’re told it’s a condition of employment. Let them assume what they want. To raise the issue is to admit you don’t want to work evenings and weekends — and that’s the real question. The job description either does or does not specify that you must have a smartphone or be available evenings and weekends. You must decide what’s acceptable.

Unless the job requires a smartphone to do your job during regular work hours, the kind of phone you have is no one’s business. However, an employer is free to expect you to have your own smartphone and to be available at all hours — but then I think it’s obligated to disclose this before hiring you.

And that’s why it may be prudent for you to raise these questions if the employer does not bring bring it up first, but I would wait until you have an offer in hand. Bringing it up too early could be construed as a signal that you’re a clock-watcher, when smartphones are not even an issue for the company. Don’t jeopardize a job opportunity over a non-issue.

Meanwhile, you need to look for signals during the hiring process about what the norms are at that company — and decide whether that company is for you.

How to take a stand

If the matter comes up, and you feel strongly about sticking with a flip phone, let people know you use your phone only to talk and text — and only during business hours. “Do you provide smartphones to employees who need them for their jobs?”

This could get an interviewer upset with you, but so could telling them you clock out at quitting time until the next day. That’s a lifestyle choice! It’s something to resolve before you accept a job.

For what it’s worth, I have a smartphone but I decide how I use it. I’ve trained both friends and people I work with not to expect instant responses. My time is too precious to spend it looking at a screen and being interrupted all day long!

What are your smartphone and work-hours policies? Are you a “Luddite” that doesn’t have a smartphone? Does your employer expect you to use your own mobile device, or does it provide a company-owned device?

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