Warning: Your employer might charge you for training if you leave
While there are many reasons employees stay in their current role, in research conducted by TalentLMS and the Society for Human Resources Management (SHRM), 76% of respondents agree that they are more likely to stay with a company that offers continuous training.
And according to online learning platform Udemy’s 2022 Workplace Learning Trends Report, employers are investing in their employees through career development and learning opportunities to keep them engaged in their current roles, encourage staff retention and ultimately, grow revenue.
Statista has identified that corporate training expenditure in the U.S. increased by almost $10 billion in 2021. The average training budget for large companies in 2021 was $17.5 million, while midsize companies allocated an average of $1.3 million, and small companies dedicated an average of $341,505.
Broken down, this equates to $1,433 per learner on training in small companies with a workforce of 100 to 999 employees, $902 per learner in midsize companies with 1,000 to 9,999 employees and $722 per learner in large companies with staff numbers exceeding 10,000.
While it’s difficult to quantify the exact amount an investment in learning and development can yield –there’s the cost of the training itself and the time spent away from your desk coupled with the value your training could add to the company’s future revenue — Udemy also found that 85% of HR leaders find training beneficial for organizational growth.
So are employers entitled to recoup whatever losses they incur if an employee that has received training leaves?
According to research by the Center for American Progress, replacing a highly trained employee can cost 200% of that employee’s annual salary. And then there’s the fact that your employer has invested in your skills, only for another company to benefit from them.
Legally, there’s no hard and fast rule about learning and development remuneration obligations if an employee leaves. Generally, if the training was compulsory, an employer doesn’t have grounds. An increasing number of employers use training agreement contracts that set out the terms and conditions of any training provided, including the cost and how long it will take the employee to repay this.
But if an employee engages in voluntary training to advance their skills and career and there’s no training agreement in place, the company could still be entitled to recover what they spent. In USS POSCO Industries v. Floyd, an employer was awarded $108,000 ($28,000 in awards and $80,000 in legal fees) after an entry-level employee resigned and refused to repay the employer back, despite signing a training agreement that stipulated they would pay back $30,000 if he was fired within one month or resigned within 30 months of employment.
Conversely, the Consumer Financial Protection Bureau is currently reviewing this process, so legislative options could come into effect in the future. The bottom line? There’s no real way to tell what your current employer might do if you’ve received training and now want to move jobs.
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