Left: Email from FDM’s CEO Rod Flavell… Right: Graduate Fog’s founder Tanya de Grunwald celebrates the news
SCANDAL-HIT FIRM PROVIDES ‘CLARITY’– BUT NO APOLOGY
Update: We’re in the Financial Times! Big recruiters drop ‘exit fees’ on newly hired staff who quit early
*Not an FT subscriber? See the screenshot here
Up to 2,000 graduates have been told they are free to leave their job at FDM Group thanks to Graduate Fog’s campaign to Stop Exit Fees Now.
The company’s top boss has given a guarantee that current FDM employees will not have to pay ‘exit fees’ if they leave in less than two years. Some graduates feared they owed as much as £15,000.
FDM has always claimed the fees were to reimburse the company for the investment made in the graduates’ training, but graduates have disputed that the sums demanded match the quality of the training provided. As a result, they say they have felt ‘trapped’ in roles they were unable to escape.
Many have told Graduate Fog they suffered extreme mental and physical ill health as a result of their predicament. Particularly impacted were those stationed far from family and friends as a result of FDM’s ‘geo-flex’ policy, which requires them to work wherever they are placed in the UK, often with little notice.
Graduates from disadvantaged and ethnic minority backgrounds seemed to be particularly vulnerable to the company’s persuasion tactics, as well as being among the least likely to be able to afford to buy their way out. Despite this, FDM continued to promote itself as a champion of social mobility and diversity, shocking graduates by securing a place for themselves on the Social Mobility Foundation’s Employer Index for 2021.
What happened on Wednesday?
On Wednesday evening, all graduates received an email from FDM’s CEO, Rod Flavell, assuring them that new contracts will soon be provided for all graduates, with the controversial repayment clause removed:
UNAPOLOGETIC: FDM boss Rod Flavell fails to use the word ‘Sorry’ (but remembers to include a photo of himself)
It is understood that the final decision to was made as a result of mounting pressure from FDM’s clients, including Sky, KPMG and Santander, who were increasingly unhappy about being dragged into a scandal created by one of their suppliers.
The final straw was a Graduate Fog story on Wednesday, in which it appeared that FDM had told Sky several weeks ago that exit fees had been scrapped – yet this message had not been communicated to graduates, making the gesture worthless. We understand that teams at Sky felt mislead by FDM’s assurances.
It is unclear whether two of FDM’s other big clients, HSBC and the Department of Work and Pensions, have done anything to help the situation. It is believed that 400 FDM graduates have been on placements at HSBC for several months and that links between the two firms go right up to the top. Graduate Fog has previously reported that HSBC has known about FDM’s use of exit fees for two and a half years, yet failed to condemn the practice, or remove FDM as a supplier. How do we know that they know? Because we told them, in December 2019.
It is also thought that a highly critical report in the Sunday Times 10 days ago was a big factor in FDM’s decision to confirm that graduates’ contracts were being changed and tell them they are free to leave if they wish. It seems that FDM had not expected Graduate Fog’s founder Tanya de Grunwald to be able to secure mainstream press coverage for the story, and they also underestimated the scale of the backlash they would receive from it from the public and clients.
What have FDM graduates said?
Since the news broke, Graduate Fog’s founder Tanya de Grunwald has received dozens of emails from elated ‘FDMers’ thanking us for our four-year campaign to raise awareness about the corrosive impact of exit fees, which have caused misery to so many young people who have felt ‘locked in’ to their jobs because they could not afford to buy their way out. One said:
‘I’m on a placement at HSBC and I’ve been thinking about leaving for a while – but I can’t afford the fees so I’ve felt stuck. I can’t explain why it’s such a horrible feeling. I haven’t felt in control of my life. Today’s news means I finally feel at peace – thank you thank you thank you! For the first time in months, I will sleep well tonight.”
A second graduate said:
‘Thank you Tanya – this is AMAZING NEWS! The general public won’t be aware, but every single FDMer knows that this is literally all down to you. You campaigned for us and supported us when nobody else bothered, because you knew it wasn’t right. You are the driving force behind all this. You have no idea how much of an impact you have had on all of us for graduates’ mental and physical wellbeing, for graduates that were so scared to leave in case they’d be chased for money they don’t have. Thank you for everything you have done to secure our release!’
And a third said:
‘Get ready for a mass exodus from FDM! Graduates stuck in placements in the middle of nowhere will be the first to quit. It’s going to be a nightmare for FDM to lose so many people in such a short space of time. Their whole model relies on us all staying put and keeping quiet. But those days are over now. We are free!’
Who else is happy?
Tanya de Grunwald, founder of Graduate Fog and the Good + Fair Employers Club, said:
‘This triumph is reminiscent of “David and Goliath” – I am so happy that so many graduates have been released from these horrible contracts. It speaks volumes that FDM has not offered an apology for all the damage and distress that their exit fees policy has caused over the years it has been in use. It is impossible to believe they were not aware of this, when we have been campaigning on it for so long.
‘I also note how this statement casually implies that graduates were silly to have been afraid of the fees clause in their contract. The recipients of this email know all too well that the devastating power of exit fees lies in the fear that they will be chased for the money. To pretend that was somehow their mistake is disingenuous and insulting.’
THE GRADUATE CHAMPION: Activist and journalist Tanya de Grunwald refused to give up on graduates who needed help (Photo taken at the Good + Fair Employers Club ‘Leadership Lunch’ on 4 May 2022)
Although de Grunwald expressed pride at being thanked for her work, she said the struggle to get justice for graduates reveals bigger, systemic problems with the way employment contracts are drafted and distributed to young and/or vulnerable workers:
‘It’s nice to be thanked for my campaign work – but the fact that scandal fell to me to fix shows that other systems and agencies have failed to protect these young people. We see that in the UK today, employers can put whatever they like in a contract. Once a person signs it, their only way to test the contract is to break it, and risk their employer taking them to court. That is far too heavy a burden to place on the shoulders of people who were desperate enough to sign the contract in the first place, and already blame themselves for the mess they are in.’
De Grunwald added that this story s not just about FDM and the other firms that have been charging large exit fees – their clients have questions to answer too:
‘This is a corporate scandal that has been going on within some of the UK’s biggest and best-known employers for years. That’s tens of thousands of managers who have turned a blind eye. All these firms must now reflect on how that happened.
‘Big companies need better ways to scrutinise and dump bad suppliers that don’t fit with their values. They accept responsibility for international partners – yet ignored a scandal right under their noses here in the UK.
‘They must also look at why whistleblowing failed. Several junior managers within client firms have reported being unable to escalate concerns about suppliers like FDM, because the decision to use them was made at a much higher level. When your boss’s boss plays golf with the owner of a bad company, how likely is it that they’ll be dropped as a supplier?’
What next?
Although FDM is by far the biggest employer that uses exit fees, others are still at it. It is important that we don’t forget all the graduates still trapped at the other firms that charge large exit fees – including Kubrick Group, who were still chasing graduates for their full fees of £19,800 as recently as January 2022.
Several Kubrick graduates who disputed the fees are believed to have been given non-disclosure agreements in exchange for (slightly) discounted fees. ‘It’s quite creepy – they just vanish,’ said de Grunwald. Earlier this year, we reported that 60 Kubrick graduates were working at AstraZeneca under exit fees contracts, and we have not heard that this has changed.
Other firms that graduates have been warned to steer clear of are Revolent, Ten10 and Geeks Limited. We have also been concerned to hear reports about similar contracts offered by a ‘new generation’ of exit fees employers including Grayce, Nology, Futureproof, Digital Futures and IQUAD, which we also advise graduates to avoid.
De Grunwald said Graduate Fog will continue to pressure these firms to change their policies on exit fees, warning: ‘Dragging clients into this scandal has proved to be the most effective strategy by far, so we’ll just keep doing that until all these horrible companies finally cave in.’
She also has plans to campaign for the creation of a Fair Work Ombudsman, a panel of experts who make common sense judgements about what is reasonable and right in employment law cases. She hopes that a Fair Work Ombudsman could also challenge employers over unpaid internships, and other bad practice that is more common among young employees, saying:
‘This system works well in Australia, so why not do it here? In the post-Covid jobs landscape we are likely to see all sorts of bad behaviour from unscrupulous employers. The UK’s young people need a better, fairer way to challenge their employers.’
* WHY DID FDM FINALLY SCRAP EXIT FEES?
Attack of conscience – or fears that their clients would abandon them? Have your say below…
They scrapped fees years ago, I know this for a fact as I was on their program back then. You’re taking glory for something you had no hand in, you’re shameful.
Wow – your persistence paid off. Well done Tanya.
Thanks for your support, it means a lot 🙂
Thanks Dan! It’s been so interesting to see who has stepped up during this campaign – and who has shrunk back. I certainly won’t forget who was in which camp!
Excellent news! this was definitely not scrapped and I was reminded of having to pay fees 2 months ago!! 9k to be exact!!
Your dedication to helping graduates is admirable but your articles are poorly researched and puerile. If you put more effort into constructing well informed, well written pieces instead of shouting about how great you are, I’m sure you’d get more respect within your industry.
Thank you for your kind comment – I really appreciate your support! Have a great day 🙂
Does this apply to US consultants too?
I wanted to provide some distinction between the some organisations in discussion as there is an umbrella categorisation of all firms with exit fees
As someone who has applied to FDM as a grad. The biggest negative component was that the 3 month training period is unpaid, you had to come into the office (before covid) up to another 3 months while their team tries to place you which was by no means a definite placement. That’s 6 months of travel costs. Starting Sal was 21k rising to 24k in year 2 which is hardly London living wages.
And as someone who was once affiliated with Kubrick, they offer a 32k year 1 and 40k year 2. With many consultants choosing to stay onto year 3 and even 4 past their 2 year bond. The entire training period is also paid as part of a year 1 salary a cost that Kubrick incur completely on their end as well as the period when the consultants are being placed. Consultants also have the option to be placed elsewhere if their initial placement does not work out. not to mention, Kubricks training is more on the technical side of the market, data engineering, machine learning, etc
I understand what your mission is and I commend it, but while the exit fees can be seen as exorbitant, I hope this provides more of a nuanced overview. If large waves of individuals leave the organisation, there wouldn’t be a business model, and with no business model, the hundreds of people who have had positive experiences would not be able to have a career in data
FDM Group’s CEO stated these changes will apply to all UK consultants. Does anyone know if US consultants will also be receive new contacts and be released from having to pay exit fees?
You make some great points here and you’re right. It’s much more nuanced. I too commend your efforts Tanya and they’ve clearly been needed. As you say however the business model needs to make sense or no one is going to invest in training all these young people. The real acid test is not exit fees however ( which no one actually seems to be charging anyway) but what the trained people feel. And this varies widely between different providers and doesn’t seem to be related to exit fees. Check out Glassdoor if you’re a graduate and you’ll find that scores vary between widely 3.4 out of 5 and 4.9.
3.4 is pretty rubbish and 4.9 is exceptional.
The quality of training, the salary level, where and who you are placed with, and how the firm supports you post training are all critical considerations.
Excellent work Tanya! Really pleased to see that your tireless campaigning has paid off and helped these companies to clean up their business models and offer graduates a route into a technology career without penalising them with a huge fee if they leave early.
Hope you will continue your campaigning against other large companies such as Kubrick (It looks like they running scared from one of the promotional comments added to this post). They also seem to have lots of negative reviews on glassdoor on how they treat their staff who are clearly unhappy being tied in with huge bond.
Looks like the long comment from Anon promoting how Kubrick are different to FDM was probably written by one of the Kubrick owners. The ONLY way you are different is that you still charge ridiculous EXIT FEES! Keep the heat on this horrible company so they do the right thing like the others who have changed their ways!
This is awesome and it’s a great win. Would this be translated over to the US as well. FDM also has a lot of consultants in the US.
Is anyone aware if this also applies to graduates currently in the program in Australia?
Hi, there has already been a ruling in Ontario that we think covers North America. It came down on the graduates’ side. We’d suggest you look up the details and ask FDM to confirm that this means you are free to go without paying the fees. Let us know what they say!
Please look up the Ontario ruling. FDM lost but appear not to have told existing US grads what this means for them. Essentially the ruling said the fees are unenforceable, which surely suggests to be that you are free to go? They just *haven’t told you have you’re free to go*… Which is pretty much what they did in the UK too…! Ugh, this company!!
You’re entitled to your opinion, but I’m not interested in ‘nuance’ here. I get emails at 2am from graduates who are distressed and desperate. Something is very wrong here, and the fact that this works out for *some Kubrick graduates* does not make it ok. Kubrick need a different model that doesn’t cause this much misery.
Please look up the Ontario ruling. FDM lost but appear not to have told existing US grads what this means for them. Essentially the ruling said the fees are unenforceable, which surely suggests to be that you are free to go? They just *haven’t told you have you’re free to go*… Which is pretty much what they did in the UK too…! Ugh, this company!!
FDM Group is still enforcing exit fees in the US. Please campaign against their exit fee practice in the US!
Could you please help those of us stuck in the same contract with Vantage Point Global? There are 100’s of us who have been coerced into agreeing to repay £1,000’s in fees for training which is available for a few £100 from Intuition Learning if we leave within 2 years. They call themselves a ‘Financial Services Consultancy’, but really its a recruitment firm. We’re promised careers in consulting, but we placed into undesirable administrative roles that no-one else wants to do. They work with all of the major investment banks including HSBC, Bank of America, GFT, BNP Paribas. We are ‘encouraged’ by the management to post positive reviews on GlassDoor and forbidden to discuss the nature of our employment or remuneration outside of the firm. Those who try to leabe are threatened with legal action. Can you please help?
https://www.vantagepointglobal.com/about-us/advantage-academy
I replied to your email – did you receive it?
Hello Tanya de Grunwald,
FDM in Australia is still having $30,000 AUD for exit fee. They work with around 25 clients in Bank, Insurance, IT companies sectors. We sincerely need your help here.
Can you talk about grayce too?
And the fact that these companies doesn’t respect labor laws? And can just accuse you for anything as gross misconduct?
How do you deal with that?
I started FDM in Feb of 2022. I had no idea of this change. I did NOT get this message from Rod that the fees were removed. I wonder who they sent this to?
I can confirm that the updated contract has the fees section removed. When this contract was sent round there was no mention of the fees being removed either.
I am very happy for this news. This information needs more publicity.
Well done. I joined this on an ex force’s program and it had impacted my mental and physical health massively. I managed to escape 2 years to the date of my contract. I also had so many issues with the client I worked with that FDM would not help me or support me during my contract. Glad to be away from them. Would definitely not recommend them.
I had to pay > £13k back in 2016 for leaving prior to 2 years concluding.
I married my wife who was based in London during my employment and they placed me in Newcastle with a public sector client. I asked to relocate to London which the client had responded positvely to and was happy to consider. However upon conversation witb FDM, the client explained to me FDM was unwilling to consider it. Despite my best efforts with HR and ongoing dialogue, FDM showed 0 willingness to even consider relocation.
I recall confidently explaining my circumstances before accepting the placement in Newcastle, to which they verbally explained they would assess the situation at 6 months into placement, which they never did. Rather, the client was willing and advocated on my behalf, with no avail given FDM’s ill ethics.
I’m happy that graduates don’t have to go through what I did. It caused severe mental stress and had an impact on my marriage.
FDM refusing pre-booked leave to new joiners, despite the fact that when joining the dates of the holiday were given and had been agreed with, now being told that the training is too important and had leave refused.
The training is not great and could be self taught from youtube videos, there is nothing that couldn’t be self taught or if they recorded in teams could not be watched later. I struggle to see why the holiday, which had been booked and paid for, two months before applying to join the graduate scheme, which having read all the horror stories now regret joining, but needed to get work after graduating university last September.
This is not the first time that my holidays had been rejected, after being accepted, they also said another holiday, which was a long weekend was rejected, again after telling them at the start that this was booked and having the leave agreed, stating that there was an exam on the Friday, there was no exam and so now out of pocket as have to change flights to late Friday and missed Friends birthday.
Does this also apply to FDM South Africa?. I am facing the same suitation where my trainning was very poor and it has been valued at 300k Rand which equals 15k pounds.
Futureproof sadly started as a really nice company but overtime they’ve hust gone down hill.
15k for leaving is absurd! I can tell you it ruined over a year of my life staying in a dead end placement with no end.
I was hired by a company the company after hiring me through futureproof quickly changed their tune (due to changing business needs), and basically told me i can’t do the role they hired me for and I’d have to work in a different role (completely different).
Having spent 4 months of my life training without any salary on the misleading promise of a engineering role. Afterwards they do not care about you and see you as just a resource and if, like me, you happen to have the misfortune of being put with a chappy client. You have to shut up and get on with it or deal with enormous fees. It’s labor with the threat of financial ruin and its had a huge impact on my life
Exit fees are still being included with FDM contracts post June 2022, and we’re all still trapped 🙁
Can you drop me a line please? https://bit.ly/duLICY