Key recruiters lower ‘severance pay’ for new hires who quit early

Several prominent graduate recruitment firms have scrapped “severance pay” which threatens new hires with thousands of pounds if they quit after being criticised for “trapping” young people.

FDM, QA Talent and Sparta Global, previously recruited, trained and supplied thousands of workers for organisations such as HSBC and government contract issued This can cost employees thousands of pounds in training costs if they quit before the end of the initial two-year contract.

But under pressure from campaigners, FDM and Sparta said no one was responsible for paying the fees, while QA Talent said they would only apply in exceptional circumstances.

The decision could spare thousands of employees from the threat of fines for leaving, temporarily ending what activists have described as a “scandal” for graduate recruitment.

However, several other companies known to charge, including the Kubrick Group, which is hiring new staff at AstraZeneca, have not indicated any changes in policy.

Kubrick said it assesses individual circumstances before deciding whether to require recruits to pay “part of the cost” when they leave. AstraZeneca declined to comment.

Tanya de Grunwald, who campaigned against tuition refunds, said over the past four years she had heard “hundreds of graduates stuck with refunds in jobs they hated”.

Firms such as FDM employ a “recruit, train, deploy” model, recruiting young graduates or career changers, training them in in-demand skill areas such as technology, and placing them as consultants in larger companies.

FDM says it fills the skills gap for employers while giving trainees a pathway to lucrative careers. However, they have been criticised for a “severance pay” clause in the contract, which means that if a new employee leaves within the two-year contract, they are responsible for repaying part of the training costs.

In a petition signed by more than 6,000 people and calling for government action on exit fees, one FDM employee said they were “not free to leave” without paying the fees.

The FDM disputed some details of the petition and said it had not charged graduates for several years.

De Grunwald said tuition refunds had a detrimental effect on graduates’ mental health. “It’s always about fear, convincing graduates that they’re trapped,” she said.

In letters seen by the Financial Times, FDM wrote to graduates on Tuesday saying all consultants who joined from April 1 had signed new contracts and that if they left within two years, FDM would no longer be allowed” Request a share of the training costs.

It said contracts issued before April allowed FDM to demand repayments, but “several years” without payment.

“The opportunity to join FDM and become an IT professional continues to attract record applications,” the recruiter said in a statement. “Over the years, we have been improving the way we work with our employees and changing the way we work.”

Sparta confirmed that former and current employees are no longer required to pay severance pay and have made it clear that they will no longer be enforced.

“Removing the exit fee is just part of Sparta Global’s growth into a socially impactful business that wants to remove barriers to entry for all individuals wishing to work in tech,” it said.

QA Talent blogged in March that it “no longer charges an exit fee for repayment”. . . except in exceptional circumstances”.

De Grunwald said more needed to be done to improve oversight given so many managers were “blind” to exit fees.

“Big companies need better ways to vet and jettison bad suppliers,” she said. “They accepted their responsibility to their international partners – while ignoring the British scandals under their noses.”

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