Should You Ask Employees to Sign a Non-Compete Agreement? | #hrmanagement #hrexecutive

As a company, you wish to safeguard your secrets and any other confidential information from competitors. A sound solution is focusing on all the possible ways through which information leak. Competitors may capitalize on such details and know what you are planning or generally how you keep things moving.

Putting focus on the workers leaving your company to work elsewhere is therefore much more significant. As part of the HR department, is there anything you can do to make the workers not a threat to the company? The solution is to incorporate the non-compete agreements in the human resource management department.

What is a Non-Compete (Covenant Not to Compete)?

This is a form of the covenant between a worker and the employer on what happens after leaving work. Through it, a worker cannot go to the company and work for the competitors. However, this restriction usually is for a certain period. An HR department needs to have a plan which makes every new staff sign the non-compete agreement. It brings some sort of security to the company’s privacy even when a worker resigns, retires, or is laid-off.

Generally, when an employee is no longer working for a company, he or she may feel free to work with anyone. If this freedom is not there, some feel highly oppressed. The truth is, a non-compete clause benefits not only the former employer but the staff as well. This is because it shields them from exploitative new employers who may only be interested in gathering information from them rather than for the actual service.

What Are the Pros of a Non-Compete Agreement?

The main benefit is in ensuring no leakage of information to other companies in the industry. A long-serving worker typically knows every detail regarding the firm. It includes the recruitment procedures of the HR department. Therefore, such staff may be a potential threat to the employer when he or she sets to work for the competitors. The agreement is critical in making sure such a worker is not allowed to associate in any way with the competing firms.

It makes it effortless for an employee to leave fast. The document usually can dictate how quick the clearing will be. Some even require a worker to repay any training he or she has from the firm. This is when resigning is too soon after the training.

It brings about high employee retention. The worker’s understanding of the agreement makes them see the significance of bonding with the company more. Additionally, they end up appreciating the importance of loyalty. In the end, the HR department will receive few resignation letters from workers. This leads to the perpetual growth of the company.

What Demerits Are Associated with the Agreement?

Generally, such clauses may act as a deterrent to people wanting to apply for specific job positions. Sometimes, new workers sign the agreements without knowing their actual meaning or their true purpose. When leaving the place for greener pastures, this is when they realize the magnitude of the contract. It may make them more picky or cautious when applying for the next job.

Through the legal agreement, there is a likelihood of being in more legal battles with workers. As a company is growing, the task force will continuously increase. In general, the continuous increase in the number of agreements, may in the end, leave a firm with many cases to handle.

A company needs to safeguard its secrets in all ways. At times, the risk of information leak is always there, but the riskiest time is when a worker leaves. An HR department can secure a company from this by making workers sign the non-compete agreement. Such a covenant restricts an employee from working for the competitors for a certain period.

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