12 Jun 2019

Negotiating Notice Periods...

In the past 6 months, I've seen an increasing number of individuals with longer notice periods than I would traditionally have expected to see.  In the past, only senior agency employees who were critical to the business would have a notice period of longer than one month and it was pretty rare to see anything longer than this.   However, I think that over the past few years, agencies have found that recruitment of new staff to be costly and it is usually easier to retain an existing member of staff than it is to find a new one.  Thus gradually, we're seeing new contracts being issued and new employees being brought in on increased notice periods.  Whilst extending a notice period is unlikely to retain an unhappy member of staff, it will likely impact on the time taken for a) the employee to find a new job as employers faced with two good candidates will generally offer to the one who is available soonest...and b) for the employer to find a new employee to replace the one who is leaving.  Ultimately they want a minimum impact on their clients and a longer notice period gives them time to replace with the right person.  

Of course, increasing notice periods does come with potentially higher costs for employers too.  If they seek to make redundancies then they will be affected by this so it's a calculated gamble for them to increase a notice period.  We're seeing as many notice periods for 2 months as 3 months so I wonder if the 2 month is a 'happy medium' for several clients.  6 months thankfully is rare - typically only at board director level and these individuals don't tend to leave their roles very often.

When signing a contract for a new role, it's typical that initially there will be a probation period where usually there is a notice period of a week on either side for both employee and employer.  We're actually seeing longer probation periods too - historically these were 3 months but more recently we're seeing 6 months become standard.  After a probation period, it is common for more benefits to kick in - pensions and healthcare etc and also for an extension of notice period.    Probation periods to work both ways.  Occasionally, employees find during a probation period that it's not the role they were sold or that they hoped it would be, thus they will aim to secure a role before the probation period comes up and they will be tied in for longer. These individuals will also be available quicker to new potential employers which may be advantageous.

Anyway, I digress.  

Most employees will sign their contract and even if there is a notice period of 3 months, they don't tend to question it.  After all, they would imagine that worst case scenario is them taking gardening leave whilst being paid if redundancy did affect them.  What they don't consider (being in the euphoria of signing up to a new role that they will love), is that if they do want to leave the role, 3 months can feel like a lifetime when searching for a new position and often, new employers either don't want to or can't wait 3 months for someone to start in a new position.

A further complication is that in these straitened times.  Employers will only make a new hire absolutely when they need to - they will not increase their costs until a new client is generally signed, sealed and bedded in....by which time, the existing team may be squealing and the new hire is required quickly....only for the employer to find they need to wait 3 months for the right candidate.

In the old days, it was pretty much true that a new employer will wait for the right person.  If they really want you on board, and you're absolutely right for the role....yes, they'll wait.  But it's less true than it was.    Employers searching for new staff do have choice, generally speaking it's a buyers market and as I said earlier, if there are two good candidates and one is available in one month, one in three....the three month candidate would have to have a significant edge for the employer to wait.   So the point of the blog really (at last she gets there...), was to talk about what to do if you do have a longer notice period and how to approach an employer to see if this can be negotiated.

The first thing I'd recommend is that you are always honest with the new employer from the outset (of the interview process) about what length your notice period is.  Manage their expectations from the get go.    Most individuals know how flexible their existing employer is re' notice periods as it's likely they'll have seen colleagues in the same situation previously.  You can, of course, give your new potential employer an idea of how likely it would be to flex that notice period based on prior knowledge.  

It's quite a complex debate.  Often candidates ask me if they should talk to their existing employer when they start to hunt for a new job and ask in advance if the notice period can be negotiated.  I'd say 99% of the time that this isn't a good idea.   I'd wait until you have a concrete offer and you know how and when your new employer wants you to start.  Most new employers know that worst case scenario, they'll have to wait for you to work your notice period, however, if it's a three month period, they'll probably ask you to see if you can negotiate.  It's always worth asking!  I'd say in 50% of cases, a shorter notice period can be negotiated. You may find that your existing employer was looking for ways to cut costs or that they don't want someone who is leaving to negatively influence the rest of the team. However, they may also need you to stay to give them time to replace you and legally, you are contracted to do that.

I rarely see the situation where a new employer issues an offer and a contract stipulating that the offer is conditional that the individual can get out of an existing contract earlier.  New employers, if they are aware of your notice period from the start of the process will be able to work around it if they can.

I wouldn't recommend calling an existing employer's bluff or just walking out of a contract.   Of course, only you know your employer and what the repercussions might be.  Yes, it's rare that any agency would take you to court (unless you are absolutely pivotal to the business or that you are taking clients with you) but it's a small world that we work in and you will need references in the future.  It's a personal gamble though and only you can make that call. 

There is a whole other subject around this one - that of non competes in a contract.  Again, I can't remember a time when this was ever brought as a case in court but it's very worth being aware what you have signed as it might come back to haunt you.  It's most likely that you'd just get an official looking lawyer's letter but restrictive covenants are rarely enforceable (unless again you are critical to the business or taking confidential information). 

Generally speaking, it's best to ask for a conversation with your MD or line manager. Explain that you have an offer you will be accepting and that you would appreciate a reduction in your notice period. Whilst you may be able to reduce it a little with any due holidays, you are relying on them being reasonable and sporting about it.  It'll be a decision based on costs, client continuity, impact on team and is rarely personal.  Ultimately, you don't know until you ask the question...Good luck!

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