Recently, I was speaking with a contractor who told me about his employee who handed in a two-week notice.

The employee had been with the business for over ten years and cited lack of growth as the reason for his departure.

The contractor was blindsided by the decision.

Per the employee handbook, the contractor notified the employee that he was to reimburse the business for two years’ worth of training and educational expenses.

This key employee was now expected to pay a few thousand dollars.

As owners, we make investments in our employees by developing their skills, operational experience, and abilities.

It’s a necessary expense on our end as we seek to provide better services and credibility to our clients and within our industries.

Is this contractor right to charge his employee this exorbitant amount of money?

What To Do
In contrast to the contractor, a family member of mine worked for an investment firm who offered an educational program that pays 80% of the cost of tuition.

This family member took part in this program to obtain her Master’s degree with the only stipulation being that she had to dedicate five years to the employer.

20% of the cost incurred by her employer would depreciate every year she stayed with the company.

Three years into the program, she decided to leave, which led to her paying 40% of the total cost of her degree back to the investment firm.

Every dollar spent educating, training, and improving your people is an investment in your business.
I wholeheartedly agree with the investment firm’s decision to recoup their lost investment.

A Master’s degree is a greater investment than a few thousand dollars of training.

What Not To Do
Despite what the employee handbook says, the contractor’s employee has benefitted the company over a long enough period of time, making the company thousands of dollars in the process.

Asking for the money back has consequences that far outweigh the amount owed, putting the business at risk.

The contractor is risking his relationship with his current staff.

His public image is tainted once word spreads within the company by the exiting employee.

Think about the scurrilous information any departing employee can write online, which can drastically impact hiring prospects and acquiring customers, potentially causing significant financial risk to the company.

After telling this contractor to bite the bullet, he grew upset. He’s deadset on getting his money back, even at a detriment to his company.

How would you handle the loss of an employee? Was the contractor right? Tell me your thoughts by tweeting me directly at @MoscaSmallBiz.

Straight Talk with Lou Mosca (June 7, 2018)

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