Contracts on start day: but what damage does it cause?
There’s a situation that’s quite unsatisfactory and easily rectified to benefit all parties. It’s that often documents comprising the contract of employment are ‘issued’ by the employer to the employee once the new hire has actually started in the job.
It’s lawful but unfair and risky. It also misses a huge opportunity to get relationships off to a flying start. Here’s why.
Precious job offer
Let’s look at what happens when someone applies for a job.
For most people a job is not just something they do in exchange for money. It’s part of a career. It’s part of their identity – who they are.
A new job is a big thing. Decisions made by applicants when going through a hiring process are hugely important and many job applicants make bad decisions, fuelled mainly by lack of information. Applicants naturally fill in the holes in their knowledge with assumptions built from previous good experience. So ignorance is replaced by trust in the hiring manager – trust that the new job will be what they hope it will be.
A job offer is a precious thing. It’s like a huge gift, wrapped up in glossy paper. Imagine the damage to feelings and beliefs if the reality is dramatically less than the expectations once the wrapping is off.
The law states that the Written Statement of Employment Particulars must be given to the new hire no later than the day they start. Those particulars comprise around 20 very basic pieces of information like start times and place of work – on no more than a side of A4 paper. It’s hardly a gift!
By meeting their bare minimum obligations, managers are not exploiting the opportunity of the moment, nor are they managing the risk.
Let’s look at a parallel example.
A new hire who is to be paid £20k costs the firm around £35k per annum. Over a three year investment period the firm would invest about £100k. So the manager is, in effect, discussing making an investment in a new resource and that resource is to cost £100k. The manager hopes that by making this huge investment the firm will benefit from, say, £150k of additional revenue and £20k of net profit over the period. No small monies.
Imagine how things might be done if the resource was to be a new piece of machinery.
The buying manager would build a tender document, invite three vendors to bid and select the one giving the best value overall – rather like searching and selecting as they would if recruiting. Then comes the contract.
It’s very unlikely that the manager would say ‘yes’ verbally a couple of months before delivery date, and then continue to negotiate terms up to and including the date of delivery. And it’s unlikely that the negotiations would result in an A4 side of paper with 20 bullet points on it!
The buying manager would risk dismissal for placing the firm under undue commercial risk. Under such a scenario, price would be fixed but specification and conditions of contract would be unclear until the machine actually came off the lorry.
In reality, the manager would issue a lengthy tender, accept bids and go on to negotiate the specification, price and conditions. The resulting contract for purchase might extend to 50 pages and be negotiated over several weeks.
And the deal would be done with a ceremonial signing of the contract and much handshaking many weeks before delivery. It’s a far cry from what some new employees experience with a verbal – or worse, texted - offer followed later by an A4 page of 20 bullet points when they walk in the door.
Now, there are significant differences. The machine would likely give greater returns and be in some way pivotal to business. And in employment there’s quite a standardised process with much of the contract already in statute. But that moment when the contract is signed – the moment when the wrapper comes off the present - is still there. The euphoria of a new opportunity, a new beginning, is still there for both parties.
When a manager makes a verbal job offer and follows up weeks later on start day with the main particulars, there is one big risk.
The employee has a set of expectations built during the recruitment period. They’ve been told stuff by the recruiter to build their positive views of the firm. They’ve been told stuff during interviews. And they’ve found out stuff from friends and on the Web. They’ll have made huge assumptions because the information they got was all positive but relatively scanty.
Weeks later, they turn up and open the gift and learn reality. And often reality is starkly different from their expectations.
We needn’t say how the new employee now feels. Nor need we discuss what likely happens.
So what should managers do?
Make something of it
The simple answer is to understand the importance of the new job to the new hire.
Firstly, the information made available during recruitment should be consistent, plentiful and accurate. Make sure that you are authentic all the way from tasking the recruitment agent to sending off the offer - that there's no cause for surprise.
Secondly, the offer made should reflect the seriousness of the event. There’s much to say about the job and the firm – maybe up to 120 A4 pages – so make the applicant feel special.
And finally, make something of acceptance. Understand that the offer made to the applicant is like a gift in glossy paper. Dress it up so.
In the end, the law demands only a verbal offer and a side of A4 on start day. But doing this, and only this, carries risk and misses opportunity.
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