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The Almighty Buck

Company Paid Training? 46

screenbert asks: "My employer has just dropped a bombshell on me. He's offered $50,000 in training over the next year to each person in our group. Yes per person. Normally I wouldn't think twice about it, but he's having legal draw up contracts that will require us to pay for the training if we leave. I'm not really happy with my current employer due to changes company-wide. I've worked for companies in the past that had programs like this, but never with that kind of money, usually 5-10K. Should I take the training and stick it out for the 3 years, or just put it off?" That's a lot of money to drop in training, but given that it's always wise to keep up your skill set, might this be worth it.
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Company Paid Training?

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  • Watch out (Score:3, Insightful)

    by thened ( 530582 ) on Sunday April 28, 2002 @10:51AM (#3424510)
    I'd be afraid of a situation like this. It is nice to get some training, but it could seriously put you in a nasty situation. Let's say the company has some financial problems in the near future, and they decide they need to get some money somehow. They could make you do something you would absolutely hate doing in order to get you to quit so they could take money back from you.

    Although I doubt this kind of situation would happen often, it is something to keep in mind when taking training with a condition like the one mentioned. $50,000 seems a little excessive to me.

    • Re:Watch out (Score:3, Interesting)

      by tzanger ( 1575 )

      I agree. What the company I work for does is urge you to take courses related to your job or where you want to be in the company and, depending on your grade at the outcome, reimburse you based on that. IIRC the scale is something like A-B - 100%, C - 70%, D - 50%.

    • $50,000 seems a little excessive to me.

      A little excessive? $50,000 is the best part of 2 years full-time undergrad tuition at MIT! It's more than the total cost of most MBAs! What on earth sort of training costs $50,000 over one year, especially considering it's for employees who presumably will have work to do and can devote only a few hours a week to it?!

      Make sure these aren't Mickey Mouse courses at a training unit run by another part of your company where the fees are theoretical (i.e. internal to the company so no real money changes hands) and bear no relation to the market cost of the courses. And make especially sure it isn't a not-too-covert kickback arrangement between the trainers and your management. And make damn sure that if you get made redundant or dismissed, you aren't liable for the cost!
  • Call a lawyer (Score:4, Interesting)

    by m_evanchik ( 398143 ) <m i c h e l _ e v a n> on Sunday April 28, 2002 @11:03AM (#3424545) Homepage
    Don't be a dumbass.

    Find a competent labor lawyer and ask his advice, and absolutely don't assume a potential $50K liability without having a lawyer look at it. Don't let them fuck around with you on this.

    This is serious money. You have a right to know your options from a competent source.

    As far as I know, there is some precedence for this sort of arrangement. On the other hand $50K is a hell of a lot for one year's education and training for one person. If the training would be easily applied to another job, like a Harvard MBA (which is a hell of a lot cheaper, by the way), then you should be more willing to consider it. On the other hand, you have a right to not become an indentured servant.

    This sounds kinda fishy.

    Talk to a labor lawyer! Try calling your local bar association. They should be able to refer you to one. Or just look in the phone book. An initial consultation should be less than $100.
    • I wouldn't sign a contract with anyone unless I was sure it was fair. If I have any doubt, I get a lawyer.

      A company offering you lots of training and then requiring you stay is either trying really hard to retain you (almost to the point of indentured servitude) or wants an excuse to get rid of you on 'technical grounds'. "He didn't take the in-house training we provided, therefore he's not a team player". A lawyer can tell you if it's coercive.

      You never have to accept a contracts as written. I've negotiated contracts with employers before and if you can't get an agreement, at least you're free to say "no deal".

      I recommend the book "Getting To Yes" for anyone who has to do some negotiating, especially if you're never done it before.
  • by AndyDeck ( 29830 ) on Sunday April 28, 2002 @11:10AM (#3424577) Homepage Journal
    Questions on the topic of employer paid training have been asked before: quite [] a [] few [] times [].

    Some of the details covered in the previous discussions apply here in spades due to the amount and duration in question: The reimbursement MUST be only required in cases of voluntary separation, and MUST be pro-rated down over time (i.e. quit after 1 year and owe 2/3, after 2 years and owe 1/3).

    They really want to give you $50K? Does that INCLUDE the cost of paying your salary while you are in class? Otherwise I can't see what they expect you to take... even if a class costs $5K/week, is your employer really going to give you 10 weeks of training? Or is the amount a 3-year total, or intended for grad school, or...?

    In short, this sounds like a GREAT opportunity, but what will be expected of you as a result? What are the company-wide changes that make you question staying on? Is your employer specifying the classes? Be careful with this... and most especially be very careful with the conditions requiring reimbursement. You'd really hate to be stuck paying the company back a huge chunk of cash if they did a RIF, or re-assigned you as a janitor to force you to quit, etc.
    • Another good idea is to have your lawyer ensure that the contract terminates (without you owning money, of course) if your company (or group) is acquired or merges with another company. Three years is a *very* long time in this industry and you need to anticipate that new management would make an undesirable situation intolerable.

      On a related note, I would also make sure that the contract terminated if the company files for bankruptcy. I've heard some absolute horror stories about some sharks being creative about finding people who owe the company money. I have no doubt that some would love to find a way to hit you for a reimbursement of that "loan." If they don't have qualms about seizing the homes from under retirees (and if some people killed themselves because they lost everything at the age of 70, because some shark couldn't see that they were the victims of a Ponzi scheme, not a coconspirator skimming money, well life's tough) they won't hesitate to nail you.
  • by juju2112 ( 215107 ) on Sunday April 28, 2002 @11:32AM (#3424660)
    I'm not really happy with my current employer due to changes company-wide.

    If you dislike your job, it is my strong opinion that you should not stay for anything. It all depends on how much you dislike your job of course. But hey man, happiness is a hell of a lot more important that money.

    Find a cool job that you don't detest going to every day. Every moment that slips by you can never get back. Enjoy it while you can.

  • My opinion is to be very, very careful about this.

    You can certainly spend $50,000 on training. You may not be able to get $50,000 in value.

    The only people who are successful in computing, I have found, are people who teach themselves. The field is too fast-moving to have a good class in every subject. On the contrary, I have never seen a class that was excellent. Everyone has his or her own special needs. It is unlikely those needs can be met in a group.

    People in the field of computing need the skills to pick up a book of 1,000 pages and extract useful information in less than a day. Developing those skills is of fundamental importance to being successful in our field. You can only develop the skills needed to teach yourself by teaching yourself.

    Also, consider the business tactics here. Why would your company want this arrangement? It is easy to guess. They don't care about the training. They want to lock you in to your present salary for a very small amount of money. No doubt your employer has seen the cost of acquiring and keeping an employee with computer skills, and no doubt that cost is greater than $16,666.67 per year ($50,000 / 3 years).

    It is easy to guess that you will find yourself not getting raises when you should. It is easy to guess that the value of lost raises might be more than the actual value of the agreement.

    You say, "I'm not really happy with my current employer...". Take this seriously. It may be your brain saying that you don't like something that it, at present, quite well hidden, such as, for example, that your current employer is sneaky.

    Maybe you won't be able to spend $50,000 in one year. However, you will still be locked into the 3 years of the agreement, won't you? Maybe the company knows you can't spend $50,000, and would find some reason not to let you, if you tried. Remember, the arrangement requires you to do useful work in that year, also. They can reduce the amount you spend easily, by merely assigning you to a rush job.

    In reality, this arrangement may just reflect a desire to lock the average employee in your group into 3 years of unsatisfactory employment for much less than $50,000.

    The trick here is that the employer is guessing that the average employee in your group will not have the cash in the bank to allow himself or herself to change employers. Remember, anyone who tries to trick you is a crook. It doesn't matter if that person is successful.
    • The only people who are successful in computing, I have found, are people who teach themselves. The field is too fast-moving to have a good class in every subject. On the contrary, I have never seen a class that was excellent.

      I agree in part and disagree in part. You're absolutely right that being able to teach yourself is vital - if you're not able to suck down big thick books and keep it in temporary storage, then neither systems administration nor programming is the field for you. If you're not motivated enough (or interested enough) to learn in your spare time - i.e., if this isn't both your hobby AND your profession - then your potential is limited.

      I agree that classes are often of questionable value, especially since they're often very expensive. I think System Administration 101 classes are a waste of time - learn on your own. Same for a lot of programming classes. The material is in books, usually in many books, and if you can't read and learn from the literature, forget it. It's one thing if you're pursuing a B.S. degree and it's part of the curriculum; it's another if you're expecting your employer to spend $3,000 to send you off to Solaris 101.

      However, that said, there are some situations in which training is invaluable. The first training I ever went to was on Auspex fileservers, where are specialized NAS hardware. There's no way I could afford a $200,000+ box to play with at home, no way to simulate one, and no way management would let me "experiment" on the production box. In that case, paying for a few days of instruction + lab access was worth it (and really, it was the lab access).

      If the class in question offers you the ability to work in a lab and break things (and fix them), then it may be worthwhile. If that lab consists of PCs, then it's not - yes, Virginia, you can learn Linux (or Solaris x86, or whatever) at home. You can't learn a Sun E10000 at home. Good post!

  • Is the training worth something to you, or is it only worth something to your employer? Is it something that you can reasonably transfer to another job? If not, why take the risk that you job will suck more than it does now?
  • It seems reasonable to me that the company wants you to stay for 3 years if you accept the $$$ for training. If you quit prematurely, they arguably have a right to get some of their investment in you back.

    However, the more important question is what happens if the company lays you off or terminates you? If they still expect to be reimbursed after terminating you, I'd be very cautious. Being unemployed is not fun. Having your ex-employer breathing down your neck for $50k would just make your life miserable.

  • worth it for me.
    Does the company have multiple locations. One stipulation may be that you have to be willing to move to other locations within the U.S. Read the fine print. The "possiblity" of moving to Kansas did not appeal to me. It was very tempting at the time. Being that the office's where I was at were laid off I wonder if they would have pulled that card, maybe not, but I never had to find out.
    Doing some math, if you quit and get a 15k increase, (pretty much my rule of thumb that says its worth changing companies), at a new job x 3 years is 45k potential, if your not at your top end already and there is something out there you can get.
    I've been places where it never fails that people don't like their job. I can't say I've worn their shoes or yours but you do have a bit of control on your outlook on work and wether or not you at least can enjoy it enough to want to go to work. I tend to value monetary (money) over un-measureable things (people) as I can generally enjoy shoveling anything if the pay is right and always tend to make a few friends wherever. What are your values, figure them out and get a job that meets 80%-100% of them.
    • "not appeal to me. It was very tempting at the time"........
      What the heck did that mean. Yes, I'm scizophrenic who can't spell and so am I.
      The money/training appealed to me at the time, not the potential of having to move.
  • by gnovos ( 447128 ) <gnovos.chipped@net> on Sunday April 28, 2002 @01:18PM (#3425040) Homepage Journal
    ...That you won't have to pay anything if THEY fire YOU. As long as that is true, you don't have to worry about things going sour in the future, becuase you can always just force them to fire you.
  • Because basically, it is - for them. They're making a bet that if they pay this fee, they can keep you for 3 years. And of course, if you take a good chunk of the 50k, it's going to make it that much harder for you to leave the company over the next 3 years, because I doubt they'd let you pay it back with a fair payment schedule and low interest rates. This actually might be illegal, especially because of all the ways they would be able to abuse you over the next few years - freeze your salary, trim benefits, make you work on unsavory projects. Of course, you should check on what happens if you're fired, and if they start abusing you, find a new job and then just stop coming in... that's a pretty good way to be fired.

    Of course, this also might be a litmus test of your loyalty: how much of the training are you going to take indicating how likely you think you'll be there for the next 3 years. Ttraining is generally overpriced, as it's geared for a corporate budget, not a consumer's. My recommendation is: see if you can get some hardware with that training budget, at least if you walk, you've got something truly tangible. If you can handle being there for a bit, I'd say take a class or two on something that you really think would help you find a new job (since it sounds like you're already looking, or should be) and then do so.
  • This whole idea scares me a little.

    What if you get fired? Do you have to pay back? Probably.

    What if you get laid off? Do you have to pay back?

    What if you don't want training? Can they fire you for not being a team player? After $50K is a lot to commit to, if you aren't going to be around long enough. This could be their way of getting rid of you.

    I wonder if they could force you to take $100K worth of training and get a certain gpa, and if you get less, then fire you and get their money back.

    For what it's worth, I think that it's good that they hold workers to a certain amount of accountability, with regard to training. After all, hiring a new worker is expensive and risky. Getting the new employee to take up *some* [not a lot] risk would make the work place more competitive.
    • >>For what it's worth, I think that it's good that they hold workers to a certain amount of accountability, with regard to training.
      >>After all, hiring a new worker is expensive and risky. Getting the new employee to take up *some* [not a lot] risk would make the work place more competitive.

      surely if a new employee is going to take some risk for a new job, they should be looking for bonuses, stock options, promotions, etc..... not training?????
      • surely if a new employee is going to take some risk for a new job, they should be looking for bonuses, stock options, promotions, etc..... not training?????
        Yes you are right. That's why I asked what would happen if you don't want training. If the new emloyee is taking some risk for a new job then he will want something in return, and it's probably not training. As I said in the quote that you quoted, a certain amount of accountability is good. I wasn't refering to training as a reward. I meant to describe it as something that would help competition.

  • $50,000 is a lot of money, do you make enough money to pay off that debt if you left?

    Would you be allowed to pay it back over time. What timeline?

    It sounds to me like someone is pulling a stunt. $50,000 is a heck of a lot of training.

    Will they sign an agreement saying you will be paid for 3 years work and cannot be laid off. (Ie: they would be forced to pay out the contract).

    I've signed an agreement in the past for $5,000. It expired 1 year later. By happenstance I never had the privledge of applying any of it. I later found out my employer paid virtually nothing for the training. They only paid for the trip itself. No training costs. (Trip expenses accounted for about $2000.).

    To me it sounds like your employer is attempting to get people 'dedicated' to the company. This may not be a good sign. Evaluate the value of the training to yourself. Would you be able to leave the company and make $50,000 a year more? If so then it might be understandable your employer is reluctant.

  • Training is usually paid for by the company because it's in their interest for you to have the skills in question. However, in situations like this, they're claiming that the training costs are a benefit to you, and hence you should give them something back in return (i.e., continued service). With this in mind, you are then well within your rights to refuse the training. If the company wants you to go on a course to learn about XYZ, then refuse unless you believe that XYZ is of sufficient value to you to make it worthwhile. If it is, so much the better -- go on the course, and increase your knowledge. If it's not, then refuse the course unless they remove the restrictions.
  • $50K per employee is no drop in the bucket, no matter how big your campany is. It sounds as if they have some cash and want to invest in their employees, but they also want their employees to "invest" themselves in the company. Without knowing who your employer is, I doubt your employer's plan is to give their employees training then "demand" it back by making you quit. It just doesn't make good business sense to do that to the people who work for you (unless your boss has pointy hair and your HR director is a cat:)

    Companies make money by investing and collecting in the future. If they are willing to give you $50k today, then they are probably expecting that over the next 3 to 5 years that you will return that and more by working harder and smater in producing whatever your company makes.

    Unless you really hate your employer and think there is no place to go in the near future I say take the training. When considering the average career spans 25 or 30 years, 3 years is not that long of a time. Heck, you don't even have to use all 50k. Why not take a few classes to fill in the gaps of what you don't know.

  • Have have to respectively disagree with most comments. Go for this. However remember what you are getting into.

    There is a chance that you will have to pay this off yourself, so make sure that you keep the cost in mind. Look at it as a student loan, with a bonus for using it at work.

    Now decide what training to get. I don't know what your goals are, nor do I know what your level is. however you can go to your local university and take some good classes to full your needs. You should take them.

    The worst case is you quit your job and have to pay $50,000, but if you took the right classes you would not have got that new job without the class so you are better off with them.

    Note that my advice is not to use up the $50,000 allowance just because you have it, but to take the classes you need to improve your marketabiliy. If you have to pay this off latter, just remember that you wouldn't have gotten as good a job without the classes.

    You might want to ask a banker if you can get a student load on short notice if you decide to leave to pay what is left off. It is an odd situation, but nobody can come up with $50,000 on short notice, but you should be able to get some sort of loan.

    Lastly, if you do decide to take a job elsewhere, remember when talking salery that you can negociate this point too. If they will not give you as much as you want (or after you got as much as you want, but suspect you might be able to get more), bring this up as a concern. They might be willing to paying part of your "loan" as a signing bonus.

  • he's having legal draw up contracts

    That part right there should give you the answer you need. If you're required to sign a legal document such as this, especially one that has questionable provisions in it, you probably need a lawyer. Most of here are not lawyers and thus can't really give you the advice you need.

    That being said, I doubt that you can go to $50,000 worth of training in one year and get all your work done at the same time unless the classes you are planning to attend are quite expensive or the employer plans to let you have as much time for training as you need. I doubt the latter is true because otherwise you could take 50 $1000 classes.

    I'd think that if this agreement is based on you staying three years you should get to spread the training out over three years and that how much you have to pay back would be prorated on how long you stayed. Think of how much will have changed between years one and three.
  • by tkrabec ( 84267 )
    Take the training.

    If you get a new job have your new employer pay for the training costs that you owe. And sell them on the fact that yes it is a lot of money in training but you do not lose my services for X weeks that I would be out training

    -- Tim
  • This used to be common practice at franchised studios for ballroom dance teachers (it may still be--I'm not sure). The idea is that the company will invest $X in your training over the next year (tens of thousands is common, and EASY to spend in our business), and they make you sign a promissory note for the sum, which they redeem if you leave.

    As it turns out, many of these "legal documents" weren't worth the paper they were written on, but anything with a signature and legalese can be a powerful motivator for the uneducated. My fiance (and partner) won in court when her former employer tried to sue her after she left, but she's more informed than most and pretty familiar with the legal system.
  • by dfreed ( 40276 )
    As a couple of people here pointed out make sure you get these guarantees:
    1. You should get to pick the training and the method. This makes sure that you don't have to take classes from the mangers cousin.

    2. You should also make sure that you could spend some of the 50K on computers/books/network equipment to use in experimentation / learning / self-training (at your home/work/whatever). And you should own outright any equipment you buy with the funds.

    3. Make sure that you can spend that money on travel to get to the training. It's great that they provide 50k for training but if all the classes you want are on the other coast you could end up spending 25k just to get your training. Also there should be not limit on the cost of hotel, otherwise you may end up still forking out a lot of your money to get a decent hotel.

    4. The debt should be pro rated on a daily/monthly basis. (i.e. after 1 year you only owe 2/3 of the amount you spent)

    5. This should clearly not be a loan to you, it should be a training budget. It should be considered sort of like an expense account, but for training.

    6. It should be clearly stated that there will be no interest, adjustment for inflation, or other form of upward movement in the total amount that you owe them.

    7. If they fire you / lay you off / downsize you, you owe them nothing (and it should be explicitly stated that the training package should not, in any way influence your severance package).

    8. If they cut your salary, you own them nothing.

    9. If they require you to move to a new office / location to remain employed, you owe them nothing.

    10. If they require you to change positions (go from programmer to manager, or programmer to janitor), you owe them nothing. Note the only problem here is if you want to get promoted.

    11. If they cause a significant change in your job description (i.e. you go from working 40 hours per week to working 60 hours per week, or if you suddenly become the only Sys Admin who's main tasks are scrubbing toilets, emptying trash cans, and moping floors), you owe them nothing.

    12. If they get acquired by another company, you owe them nothing.

    13. If they go bankrupt, you owe them nothing (and they forgive your dept).

    14. If your union causes you to go on strike it should not affect your training or payment schedule (if you strike for 25 days then 25 days get added to the end date of the training plan).

    15. If you separate from the company due to injury (regardless of if it was work related or not), you owe them nothing.
  • Sit back and think about it for a minute. If it is something you would personally use the money for, then go for it. If, on the other hand, you are just trying to get out of the office for a while and spend some of the company's money, then you probably shouldn't.

    If you received the training you expected and really got something out of it, then it was worth the money, whether it will come out of your pocket or your company's.
  • When you get your 200% pay raise, and your $10,000 signing bonus, paying your current boss off would be CAKE.

Disks travel in packs.