You’ll Pay to Quit This Job! One Company’s Nightmare Hiring Policy…

by Brad Isaac on June 17, 2008

One of the best email newsletters I subscribe to is Nick Corcodilos’ Ask the Headhunter. 

It is a fun newsletter that’s very informative.  And today’s issue was especially so.  A reader wrote in asking about an email received by a recruiter.  Apparently, the company in question requires all employees sign an agreement to stay on for 18 months and if they don’t, they have to pay to leave:

XYZ company has all of their new employees sign an agreement to stay for at least 18 months. This is because of the importance of their projects and contracts and because of the investment from their part with new employees and training and so on. They have everyone sign an agreement to stay for at least 18 months. If you do decide to leave before then, you are required to pay a small percentage of the fee that they paid to the recruiter for your hiring. The percentage lessens each month and the longer that you stay with them, the less you have to pay if you decide to leave. Unfortunately, this is becoming more common among employers.

Nick rightfully blasted the recruiter. 

What we have here is a recruiter who is a maggot trying to attract flies to a dying company.

It should be obvious to all, that when a company stoops to such schemes to retain employees, that their employees are very unhappy.  The solution to unhappiness is not punishment.  It’s not a poor reference.  It’s not a bill.

This situation is almost laughable if it weren’t so sad.  The company in question has their philosophy upside down.  If they had spent half the time, money and energy treating their employees with respect and appreciation instead of trying to trap them into some jail cell for 18 months, they wouldn’t be so desperate to find workers. 

As someone who hires and is hired, I know the power of employee appreciation.  Just last night, I had a contractor who worked for me before emailing me multiple times excited to get my next project.  That’s not because I made him feel like a prisoner, I didn’t make him pay to work for me.  No, I focused first on keeping him happy to be working for me.  I worked hard on developing positive feedback milestones and rewards for a job well done. 

This philosophy paid off for the both of us.  He acted as if this project was his own baby.  Every last pixel was in place.  His work was brilliant and stunning to look at (You’ll see it soon).  At project completion, I paid him cash within the hour and then sent him off with a sparkling reference he could use for other contracts.

What the company above can’t get through their thick skulls is people don’t want to be slaves.  They don’t want to work for leeches who will use them up and throw them away.  Not when they can go someplace where they feel good, have fun and are rewarded.


Do you have any work nightmare stories?  Feel free to share them in the comments below…

Technorati Tags: job, career, happiness, work
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June 17, 2008 at 2:42 pm


I would agree with you 100% if it weren’t for people like my brother.

He accepted a very good job from a very good company (he does purchasing for large manufacturing operations) that included them paying to relocate him, paying to sell his old house, and giving him a signing bonus on top of a salary that was a big increase from his previous job.

Less than 12 months later he was approached by a headhunter with another offer that was back in the same town he lived in previously – he took the new offer.

They lost a huge investment in him and not because the treated him badly. My brother is just part of the new generation of workers who have no loyalty to any employer and job-hop as a way of life.

Ironically, about one year later the company he jumped too went bankrupt and he was offered a job at the company he had left – with a contractual obligation to repay them for relocation expenses if he quit again before 18 months.

The double irony is that he turned them down because he had two other offers (in a down economy within a severely depressed industry) and one of those made him a better deal.

Sometimes I need a scorecard to keep up with him!

Andrew Seltz
The Go-To Guy!

Brad Isaac June 18, 2008 at 8:16 am

Andrew, it sounds as though he has a very specialized skill? Either that, or he’s quite a salesman.

I can see having to pay back relocation expenses because to ask a company to pay me to relocate somewhere and then I quit after 1 month is unfair to ask of any company. I used to see educational contracts a lot 10 years ago. Where if a company hired me, paid for me to get additional education (like MCSE training) I’d have to agree to stay for 6 months or pay a prorate.

Why should they pay to educate me today just so I can go work someplace else next week?

But paying recruiting expenses back is just stupid. Finding employees is part of running a business. It’s like me having a party with the agreement that anyone who leaves early has to pay a fee. Who wants to willingly go to a party like that? Don’t you just know it’s going to suck in advance?

June 18, 2008 at 9:19 am

Brad draws the important distinction. When a company invests in a new hire’s education (or even relocation), that’s a negotiating point when an offer is made. It’s not unreasonable for a company to protect its investment — but only to the extent this involves a transaction directly between the employer and the new hire. A recruiting fee, however, is between the employer and a third party. To sharpen the point, it’s less like an agreement whereby the new hire reimburses the company for an education investment if he or she leaves early; and more like asking the employee to reimburse the company when a customer returns a product for a refund. Certain expenses are company overhead. The real problem is people who seem to believe that they must sign anything an employer puts in front of them.

B. Riley June 18, 2008 at 9:48 am

Unfortunately this is a trend in many businesses. Think about the cell phone company who makes you sign a contract saying you won’t leave. You should expect the service to be bad if they have to bind you to a contract with penalties. Same with this company. Expect the worst.

When I read this in Nick’s newsletter the other day, it literally made me nauseous!

Nick brings up a good point too that there are many people who believe they must sign anything an employer puts in front of them. This is another disturbing trend in our society today where people blindly follow orders from anyone without question. It happens too often, and I don’t need to explain to the intelligent readers of this site what the consequences are of living in a society that defaults to deference.

June 18, 2008 at 12:11 pm


My brother is both good at his job AND a good salesman, but his skills are not highly specialized – he just knows how to deal with people.

You make an excellent distinction between recruiting expenses and hiring perks. Trying to reclaim recruiting costs is a bad precedent to set – what’s next, demanding you repay them for the money they spent on help wanted ads? I wouldn’t do it.

My challenge is trying to harness my brother’s skills in my own business…

Andrew Seltz
The Go-To Guy!

June 19, 2008 at 7:00 pm

That’s a strong contrast to companies like Zappos that pay their new hires to quit. They’ve found that they spend less money to pay people to quit early than they spend training them. The employees that don’t take the cash payout are people that really like thier jobs and are worth a bigger investment of time and resources. Here is more:

June 29, 2008 at 8:08 am

Not quite sure if I follow this, but is it the same as recruitment companies (headhunters) demanding that the new recruits they found for clients, sign a contract with them saying that if they quit the client within a certain amount of time, the recruit has to pay back the amount of money the recruitment company would have to reimburse the client for the bad hire?

June 29, 2008 at 7:58 pm

Hi Brad, I think a distinction has to be drawn between your contractor (who is working for his own business, so he is self motivated) and employees (and often we are not). As Andrew said, loyalty is hard to find these days, which means higher employee turnover and higher costs. No matter what incentive scheme you come up with, as soon as your new employee has finished the training period, he can probably get much more with your competitor (you believed in them, you chose them, you took the risk, you trained them). And no one can force a recruit to sign an agreement they don’t like…likewise, the employer is free to keep looking if the conditions of the employment contract are not met.

August 6, 2008 at 12:22 am

Mo Dubai raised an important point here. I’d also like to add that employees will never see your business in your own eyes. They do what’s best for their own interest and while some rare diamonds do shine through, every now and then, most will never.

Dubai Ventures last blog post..Dubai attracts British holidaymakers

Brad Isaac August 6, 2008 at 9:17 am

I agree, most employees will not see your business the way you envision it. It’s up to YOU to make that vision clear. Not just so they understand, but so your company’s goals are met.

The burden is on the leader of the company to do that, not the employee. So this hiring policy is still bunk.

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