Recoup your hiring investment


Daniel T. Bloom SCRP

You have found the candidate of your dreams and they have said that yes they would love to join your company. They start and in this crazy world, we call employment, they get a better offer within weeks of starting with you. So what do you do now?

Many corporations in the marketplace have found the solution. The solution is to implement a "payback agreement" for training and some salary costs if the employee leaves the company within a certain period. This period varies with each corporation. With the help of corporate counsel, many corporations have extended this to relocation benefits.

The payback agreements, state that if the employee leaves the company, on their own accord, before a certain period of time has elapsed they will be responsible for reimbursing the corporation for the costs of relocating the transferee. The agreement could state that it is a full reimbursement or of all costs. It may also be a pro-rated basis depending on the time employed by the corporation. You need to also be aware in this era of tight employment markets, that there are some employers out there who have made the decision that it is worth pirating employees from other firms. They consider the reimbursement of the payback costs as part of the recruiting process. In other words, they will steal your employee and pay you the payback amount in order to get whom they need.

If you are going to implement a "payback agreement" for relocation expenses, several issues need to be addressed:

Legality -We highly recommend that the agreement be written with the complete

Involvement of the legal department within the company. There are some views out

There who believe that the payback agreements may be on shaky legal grounds.

Notice - The employee should be asked to sign the agreement at the onset of the

relocation. Specifically, it should be part of the offer package that the transferee

receives at the time of being asked to move or is hired.

Term - You need to lay out the exact term of the agreement. Currently most

payback agreements are for the first twelve months. There is a trend to increase

the time to two or three years.

What Expenses? - The agreement should outline which expenses are covered by the

agreement. You may want to limit reimbursements to the most costly of the items.

How much? - How much are you going to ask for in terms of the reimbursement. Is

It a whole dollar involvement or a percentage of the expenses.

What constitutes on own accord? - Obviously it is very clear cut, if the person up

and leaves fairly quickly after reporting for work. However, what happens if the person

reports for work and then your company is acquired or mergers with another

corporation. If in the process of completing that affiliation, their job is essentially

eliminated even though the title is still in place does that constitute leaving on your

own accord?

Payback agreements can be a valid way to reduce your relocation expenses. The only holdback is that there are certain conditions that need to be met in order for them to be successful.

Daniel Bloom is President of Daniel Bloom & Associates;Inc, a company who specializes in providing custom designed relocation services to corporations nationwide. By going to our website at you are welcome to join our relocation-issues mailing list. Ask your peers about your relocation questions. You can contact Dan Bloom at or by phone at 727-581-6216.