Who should pay for employee training?

Dear Bob …

I’m the head of IT in a nonprofit situation — read: limited funding and getting worse.

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We recently hired a new technician, and we are paying him much less than he was earning at his prior job before he got laid off. His total compensation is also much less than the starting compensation package of the person whom he replaced. He has a fantastic work ethic, he’s dependable, he comes in earlier than I expect him to come in, and he stays later than I expect him to. He is also a self-starter, and he shows initiative. He’s not afraid to make decisions on his own. All of these are great traits, and he’s a good employee.

Unfortunately for me he doesn’t have several skills I consider essential, and I don’t have the time to train him in-house. I found a one-week “boot camp” course that’s being held locally that would give him a jump-start, and I do have the budget to send him to it.

My manager (the executive director) has decided to impose a condition: He has to agree to pay us back in full if he resigns within one year and 50 percent if he resigns within two years. He isn’t willing to agree to that, and without that agreement, she (my manager) isn’t willing to invest several thousand dollars in his training in case he turns around and resigns the next day.

His position is that he doesn’t want to be on the hook for training we’re asking him to attend. When we hired him, we knew he didn’t have certain skills and he’d have a lot to learn. If we want him to go to this training, which we knew he’d need when we hired him, he shouldn’t be responsible for reimbursing us for the cost of the training if he leaves.

I’m expected to be as productive with him as I was with his predecessor, and that’s not possible until he gets up to speed on specific skills. I’ve taken time to work with and train him, and I’ll continue to do so — even if he goes to this training that won’t bring him fully up to speed. It will, however, give him a jump-start on what I need him to know.

He was the best candidate we interviewed who was willing to accept a compensation package that’s lower than what similar organizations in our area offer to their entry-level technicians. He was laid off, and he has a family to support, so he accepted the offer. Now we want to send him to training and he’s happy to go, but not if he’s going to be obligated to pay us back when he leaves.

What are your thoughts please?

– Stuck

Dear Stuck …

Here are a few thoughts, for whatever they’re worth:

• As is so often the case, this is in danger of becoming a moral issue — one that’s focused on who’s right and who’s wrong. That’s a bad direction because once it’s a matter of right and wrong, someone will have to compromise on their principles in order to resolve this impasse. Do everything you can to stop that train; once it leaves the station, you’ll no longer be in a position to find a constructive solution. Focus everyone — your manager, your new employee, and yourself — on this being a negotiation. There’s no right and no wrong, just what everyone can agree to.
• As you describe the situation, it sounds as if your manager has made a huge mistake with respect to how to conduct a negotiation, which is that she’s put you in the position of starting with your final offer. That’s never a good idea because your new employee is going to feel like he’s the one doing all of the compromising. That’s bad psychology. Even if he accepts the deal, if he’s like most people he’ll resent it, especially as I’m sure he’s aware that by most standards he’s underpaid. If at all possible, go back to your manager and make it clear you need some wiggle room so that you can give something in exchange for what you need to get.

• Speaking of which, does your manager understand that once your new employee acquires additional skills, he’s worth more in the marketplace and she’ll need to recognize this at some point in the next couple of years? It doesn’t matter who pays for the employee’s training, and again, there’s no ethical issue at stake. Compensation is a matter of supply and demand, and as employees gain skills the demand for their services increases, changing their worth in the labor marketplace.
• Your focus is on the means, not the end. This area is probably your best opportunity to break the impasse. Refocus your discussions with your new employee. Make it clear you need him to acquire the skills you’ve identified. You’re offering the boot camp as one avenue for him to acquire them. If that’s how he’d prefer to go about it, the deal is as described. Your purpose (and your manager’s) in offering this avenue is to make it possible for him to do so without incurring a financial burden. He isn’t obligated to attend the boot camp, though, and if he has some other means for acquiring the same skills — books, for example — then you’re completely open to the alternative, and you’ll provide the same 40 hours of paid time for him to make use of it that you would have provided for the boot camp.

I’d suggest making it known that whether or not you were sufficiently clear about this during the hiring process, you recognized that he’d need to acquire the skills in question fairly soon after coming on board. Not having those skills was a factor in the compensation package you offered him. His professional development will have an impact on how his compensation changes in the future — which, of course, you can say only if you and your manager come to an understanding regarding potential promotions and raises.

Short version: By focusing on the goal, you can make the boot camp an option that’s available to your new employee rather than an ultimatum you’re threatening him with. That’s much better for both of you.

If none of this is possible — if funding is so tight that raises aren’t going to happen under any circumstances, your manager is intractable about giving you any negotiating room, and there is no practical way for your employee to acquire the needed skills without attending the boot camp — then you’re in a pretty constrained box. You can’t, of course, tell your new employee you agree with his position but your hands are tied. In this day and age, I also sympathize with your manager, as I imagine she’s underfunded and doing everything possible to stretch the budget.

I don’t sympathize with her completely, though, as she’s trying to double-dip on savings: She got the employee at a bargain price, which should mean she’s willing to do without a desirable skill or two in exchange. Now she wants you to compel the employee to undertake training in a way that would confer a potential financial obligation should he decide to depart prematurely.

In my book, compelling someone to accept a financial obligation in exchange for continued employment isn’t playing according to Hoyle. It might not even be legal, although I’m the first to tell you I don’t know employment law well enough to offer anything beyond a concern on the subject.

I presume your organization has a general counsel or other legal representation. If so, it might be worth your time to discreetly ask the question. (Speaking of which, I don’t know that I’ve ever mentioned this in print: CIOs should always cultivate their relationship with the general counsel. He or she is a good person to have in your corner, as well as to have available for casual questions about what is and isn’t kosher.)

My opinion is that compelling attendance would be a bad idea under the circumstances, which means you’re going to either have to bend on your new employee’s pace of learning.

Alternately, you can terminate him and go fishing for a replacement who does have the skills — which I’d call a very bad bet to place.

– Bob

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