Exam cost clawback clauses – friend or foe?
Exam cost clawbacks are becoming an increasingly common feature of accountancy training these days.
What are they? These are clauses inserted into trainees employment contracts which say that when they leave a firm, any training costs (including study costs, study leave and exam fees) incurred in the last 12 months (but it can be as long as 24 months) have to be repaid by the student to the firm.
I’ve never felt the need to use these clauses which some people will say is not commercial.
Yes there are students who sometimes move on quickly after qualification (such as me!) which can be disappointing, but in truth, large sized accountancy practice business models wouldn’t work if all trainees who qualified with them stayed with them - they would become far too “top heavy” and so a churn of qualified staff is often needed.
Picture this – a newly qualified accountant with below market salary and no career progression available wants to leave but can’t because they have a 12 month exam clawback clause. They feel trapped and start to lose respect for the firm they work for – is this the sort of employee you want working for you?
I’ve always found that to retain good staff post qualification, offering a good working environment, competitive salary and career progression is by far the best way to achieve this.
Some expert lawyers say that these clawback clauses are unfair and wouldn’t stand up in court but I’ve yet to see one tested.