While it is easy to get an employee signed on a refund contract, it is more difficult to recover a refund. Often, the employee has gone to a new location. They can also change their address and contact information without informing the previous employer. Companies often rely on internal services such as accounting or human resources to try to collect refunds. This is an unreasonable burden for these employees, who may not be able to recover people`s refunds. The company should have a specific process to enforce the refund agreement if necessary, including how the company initiates the collection process, how it communicates with the former employee, and how and when the follow-up will take place. The question of whether a depreciation agreement could be a stumbling block for employees who will be forced to relocate arose when Exelon considered this option two years ago, said Gary Snodgras, senior vice president of human resources, but ”we decided to implement the policy anyway.” While this may be considered a ”painful disposition,” he says, ”we thought it was the right thing to do.” Before setting up a depreciation contract, consider the ease or difficulty of recruiting and retaining qualified staff for your company and industry. The more difficult your recruitment efforts are, the less likely you are to opt for a depreciation clause. If you decide that you need a depreciation agreement, try to look at the terms of these agreements used by other companies, especially those in your sector. In addition, standard forms are available to members of the Employee Relocation Council, an association of moving specialists and service providers based in Washington, D.C. Under a depreciation clause, a transferred employee agrees to reimburse the company for all or part of the employer`s transfer costs if the employee leaves the company within a specified period of time, usually within one year of the move. Arouh: ”These agreements are more often used in companies and sectors with high fluctuation rates” – those where workers do not hesitate to leave jobs for more demanding or better-paying jobs. These sectors, he says, include high technology, science, aerospace and communications.
It`s worth doing everything you can to protect your investment in your employees. From a mobility perspective, this protection usually takes the form of a refund contract that the employee must sign if he accepts an offer and before the company incurs moving costs. A refund contract allows the moving worker to know his direct costs in case he or she considers leaving his current employer. This is usually a significant obstacle for competitors and staff officers, who may be asked to cover the costs of a refund agreement. Since the employee generally does not wish to reimburse these moving expenses, this helps to keep them on assignment. If the worker decides to leave, the employer receives the refund and can use it for other moving or other investments. The aim, of course, is to prevent the policy from ever being implemented. Snodgrass says that experience shows that ”you can limit a lot of pain, torment and potential errors during relocations that would otherwise occur if you manage to a well thought out process upstream. … Think ahead about possible movements and do so in a thoughtful and sophisticated way by involving the employee in the process. The company invested heavily in moving management to Seattle, and it could have lost that investment. But it will recover some of these expenses because, like a growing number of employers, it includes a depreciation clause in its moving contract.
In a highly competitive market for talent, reimbursement agreements can also help to avoid the immediate departures of a competitor after the conclusion of a