Unpaid Probation In A Bad Economy

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When times are bad it's an employer's market, so this new tactic on the part of employers (or driven by market pressures) comes as no surprise. It is a good way to weed out all but the truly motivated candidates and saves money at the same time.


For the companies that are still in business, they put out one job ad and get over 700 applicants. In addition to that overwhelming response, they get 300 solicitations from headhunters, including some from out of the country. How do you weed through all of that? If you are one of the hundreds of applicants, what can you do to stand out?

In a buyer's market, the price of commodity items goes down. With so many unemployed chasing so few jobs, the wage levels have dropped dramatically. Some years ago in the high tech industry in our area, the employers lobbied the government to remove a number of labor laws and restrictions that were seen as anti-competitive. This meant that minimum wage and a number of things were no longer applicable to the high tech industry, in order to compete with workers in countries like India and China. Since the dot-com crash and now the depression, the high salaries for high tech employees are all but gone for good.

So what is next? Well in our area we noticed some employers offering an unpaid probationary period, of three to six months. In the past you got paid while working your probationary period, but could get let go at no cost to the employer if you did not perform to expectations. Now, job ads ask you to 'indictate if you are willing to work an unpaid probationary period'. With all things equal, you can expect that only those who offer to work for free will be shortlisted.

If you are a candidate, I would advise to offer up front that you are willing to work an unpaid probationary period. At least until other candidates catch up with the trend, you will have a competitive advantage. After that I guess you will have to offer to pay to work!

With companies struggling to make payroll, this is a nice bonus - it is even better than co-op students. If they have a short project that can complete before the end of the probation, they get free labor. You can let workers go before the end of the probation, and start again for the next project. If the worker trully is a keeper, you can make an offer after that. In some jurisdictions you may have to offer a nominal one dollar payment for the entire probation, so that the company has a legal employment contract. Please check with your company lawyers on that.

And there's more. If you have an existing employee performing marginally, or if they are just costing more than other employees, you could put them on probation, and make that unpaid as well. If they choose to quit then you save the company from paying severance. Just make sure you document their poor performance and reviews in case they sue the company.