While this can be beneficial in many ways for employers, this can also cause issues that may not be predicted. A PEO can be helpful in directing you in navigating these waters to determine what kinds of contracts are right for your business and employees.
Benefits of Employment at Will
Most employees are under an employment at will agreement, even if it is not explicitly spelled out in their contract or offer letter. In fact, every state except for Montana has a law denoting that unless otherwise stated in a legal document, all employees are assumed to be at will. For an employer, there are several benefits to this type of relationship.
First – and most obviously – is the fact that you can dismiss employees without having to provide just cause.
This means that for any reason that is not discriminatory, you may fire someone. In other types of contractual agreements, it is legally much more difficult to let someone go without opening yourself up to the risk of legal repercussions.
Another benefit to this is that you are able to change the terms of employment at any given time without incurring any consequences. This means that benefits, vacation time, and even salary can be changed without advanced notice or reasoning.
The potential negatives of employment at will
Accompanying the ups to this type of employment, there are also downs. A recent Forbes article highlights several reasons for employers to consider when making decisions about the kinds of relationships they would like to maintain with their workers. One of the cons of this type of employment that was highlighted is that there is a sense of instability for these employees.
This means that – most likely – if there is any kind of turbulence in the work relationship with their manager, they will immediately start looking for other jobs in fear of losing their current position. This could lead to losing more employees than if they felt originally comfortable and stable in their position.
Another potential downside of this relationship is that it can create an “Us vs Them” mentality among your team. Your employees could develop an unhealthy fear of their managers and HR team, which can cause conflict, lack of communication, and lack of evolution. This kind of environment can lead to people being afraid to speak up regarding ideas or issues they are experiencing and can stunt the innovation of your company as a whole.
Finally, a con of this kind of employment is that it can prevent people from focusing on their actual day-to-day role and instead prompt them to focus on keeping their manager happy out of fear of being fired. Again, this could result in a lack of communication if there are issues
– which has the potential to be dangerous and damaging for your company.
How your PEO can help you navigate this issue
While this is a complex issue with obvious pros and cons, using a PEO to help determine what works best for your employees and what is most economically sound is a must. Using your complimentary competitive analysis, we can help identify which PEO can best assist you in understanding what kinds of contracts work best in your workplace and will implement them on your behalf – lessening your stress and workload!