NOW FACING A £15,000 BILL IF HE QUITS, SAM* EXPLAINS WHY HE DIDN’T ASK MORE QUESTIONS WHEN SIGNING HIS CONTRACT
(*Not his real name, to protect his identity)
Last week, we asked why the IT outsourcing firm FDM Group has been given a platform to speak at the annual Institute of Student Employers conference, given the company’s use of large ‘exit fees’ to lock young job seekers into their graduate scheme. Participants are told that they will owe up to £15,000 if they quit the programme in less than two years.
While the legal situation regarding exit fees remains unclear until a test case is brought before a judge, we are calling on good employers and other leaders in the world of student recruitment to stop turning a blind eye to the companies in our midst – of which FDM is only one – that are using this pernicious practice.
In response to our story, we received dozens of emails from graduates thanking us for shining a light into this dark corner of the recruitment world, and begging us to keep going until exit fees are banned.
Among them was Sam (not his real name), who is currently employed on FDM’s graduate programme. He understands he will not be able to leave until December 2022, despite starting his training contract in December 2019 (yes, that’s three years) as FDM extended his contract due to Covid. If he left today, he has been told that he would owe £15,000 to FDM (scroll down to see his training agreement).
Importantly, Sam’s account provides answers to the question that critics of our campaign have asked in recent days: “Why are graduates signing these contracts, when they know what they’re getting into?” It also gives context to the “deep concerns” voiced by Sarah Atkinson, chief executive of the Social Mobility Foundation. Yesterday, she told Graduate Fog that she feared that disadvantaged graduates may be particularly vulnerable, as they “don’t always have the knowledge and confidence to recognise when an opportunity may not be what it seems.”
You’ll read in Sam’s own words how excited he was to be offered a job after months of searching, how fearful he was about asking questions about the exit fees clauses in his contract – and how he didn’t even realise he could show the contract to a solicitor, as the paperwork stated the agreement was strictly between him and FDM.
For obvious reasons, we have withheld any details that could lead to Sam being identified by FDM, including his exact age, degree subject or location, but we can confirm that he is in his mid-20s and this is first professional job after university. This is his story…
When did you join FDM, and why did it appeal?
I graduated in July 2019, and was keen to start a career in IT. The FDM graduate programme came up during my online job search, and I liked the fact that they offered such a well-structured scheme. Ironically, the training part of the offer was what attracted me. Now that graduates are usually expected to pay through the nose for any education or training that we receive, the prospect of what appeared to be free training was appealing. Of course, I now know that it’s only really free if you stick with FDM for two years after that, but that wasn’t clear to me at the time.
Did anything you found online suggest that FDM might not be a good company to work for?
No — quite the opposite. I was really impressed by their clients — including HSBC, Barclays, BP, Aviva, Sky and the Department for Education, many of which are in the FTSE250. It was exciting to think I might end up working with one of them, and that all added to the sense that FDM was a good and reputable company. I also saw they seem to do impressive work attracting female and ethnic minority graduates so I thought it sounded like a friendly place to start my career.
How did you feel when FDM offered you a job?
Excited, relieved and — again, ironically — valued. They were really, really nice to me — telling me how impressive my application and interview had been. I felt great about it, especially as I’d had more than 10 rejections from other employers, which had really knocked my confidence. I knew that the salary – £23,500 in the first year, rising to £25,000 (outside London) in the second — wasn’t great, but I figured that the excellent training I would get would make it worthwhile.
What paperwork were you given?
A welcome pack, including a formal offer letter, and my training agreement. They also included a letter from FDM’s CEO welcoming me to the company. I knew they gave this to everyone, but — at the time — I thought it was a nice touch. When I read it now, I feel a bit sick, especially now I know how rich he is, having benefited from the hard work of so many graduates.
How carefully did you read the training agreement and contract?
I read every word of it. Everything looked fine, apart from the mention that I would have to repay the fees for my training if I left less than two years after my first client placement had started. This was the first I’d heard of that. Initially, I was confused, because I’d thought the training was free.
Did you ask FDM any questions about the training fees repayments?
No. I didn’t want to question it too much, for fear of them not accepting me when I actually had a chance to get started in a fulfilling career.
Did you show the contract to a parent or solicitor?
No. I didn’t think I was allowed to show anyone else, as it makes a point to state it is a contract between them and myself.
If you had concerns, why did you sign?
Because I really needed a job! And the programme sounded so good that I didn’t think there was any chance I’d want to leave in less than two years. It sounds naÃ¯ve now, but the fact that FDM appeared to be such a well-run company, with such impressive corporate clients and was in the FTSE 250 were big factors in me pushing any doubts to one side. The awards they’ve won for being a good employer also gave me a sense of comfort.
You started your training in December 2019. What was it like?
I was surprised that the majority of the training was very basic, including ‘professional skills’ (such as what personality type we were, interview skills and how to dress appropriately in the workplace) and basic introductions to programming. A couple of weeks were more complicated training (Object Oriented Programming) and another week was a group project where we didn’t learn anything extra — we just put into practice what we had learned in the classroom.
Looking back, can you understand how FDM reaches the value of £15,000 for this training?
Absolutely not. Since finishing the training, I have found free tutorials online which I believe are comparable to the training we received, including a YouTube video that covers in four hours what we did in a week. Considering university tuition fees are £9,000 per year, for FDM to charge nearly £1,500 per week is ludicrous.
What happened when Covid hit?
Covid started to kick off just as I had finished my training, in March 2020. In normal times, this is when FDM would have started matching me with clients and sending me out for six-month placements, wherever I was needed. However, we were all told not to come into the office anymore but to continue our ‘upskilling’ and asking the account managers for roles. However, the account managers had very few roles. I guess the business wasn’t doing well. During that period, FDM hadn’t started paying me yet, since I hadn’t been placed with a client.
So, if FDM didn’t have any placements for you, what did they do?
In May, they offered a ‘short term contract’, designed to incentivize graduates to stick with FDM, on a salary of £350 per week. There was a good reason for this: more than 90 days had passed since our training had ended, and we still had not been placed with a client — so our contracts said we could have got out at that point, without any exit fees being due.
Wow — why didn’t you take your chance to escape?
To be honest, I regret it now. I decided to stay with FDM thinking that I would get an opportunity with them soon, as they kept saying things were getting better. So, I hung in. It wasn’t until December 2020 that I managed to get a placement and that’s when I received my formal ’employment contract’ from FDM.
What is your current situation?
I’ve been placed with a client and it’s going okay, but I’ve realised I’m really underpaid for the work I’m doing, so I’m starting to feel demoralised. I have also lost trust in FDM for several reasons (which I can’t go into here without identifying myself). If this was any other job, I’d be using my spare time to look for a new job. A lot of my friends have had false starts and moved jobs in the last year — and it’s frustrating that I’m stuck in mine, simply because FDM insists I owe such a huge amount of money for 12 weeks of training I received last year.
Wouldn’t FDM say that you’re valuable because of the investment they’ve made in you?
Yes, I’m sure they would — but I disagree. If I’m good at my job, it has far more to do with how hard I worked during the Covid break, and what I’ve learnt during my client placement, than to do with the basic training I received last year. Obviously, I can’t get hold of the £15,000 I need to buy my way out of FDM. Do I really have to ride this out for another 18 months, before I’m free to explore my options elsewhere? It just doesn’t seem right.
Would you consider leaving without paying?
Yes — particularly now I know about the Graduate Fog campaign, and the work that Tanya [de Grunwald, Graduate Fog’s founder] is doing to raise awareness about exit fees. I fantasise about telling FDM to stick their job — and if they want my £15,000 they can come and get it! But it’s a scary idea, as I know FDM have pursued previous graduates for the money.
Do you have a message for people working at other big companies, about how they can help graduates stuck in exit fees contracts?
Yes — check whether any of the companies that use exit fees are a supplier of yours. If they are, ask them about the terms they hire their graduates under. Most of FDM’s clients are nice — the graduates generally like them. It’s FDM that we don’t like. It’s great to hear that lots of big companies are starting to take note of this practice. It’s estimated that 10,000 graduates have been employed under exit fees contracts in the last four years. It’s amazing that people are finally seeing what has been happening under their noses for years.
NOTE FOR READERS: Graduate Fog has shared Sam’s story with FDM Group and asked them to respond, but they have not provided a comment.
* GRADUATES! BEEN CAUGHT OUT BY EXIT FEES?
We are collecting stories from those who have been impacted by the scandal of exit fees. Are you currently trapped on a scheme you want to leave — but can’t afford to buy your way out of? Or have you quit, and been chased for the money? If you paid up, did you have to resort to taking out a high-interest loan? And, whatever your situation, please tell us how exit fees have impacted your life, including your mental health. Of course, all emails will be treated in complete confidence. Contact us here.