Employment contracts

Working in Germany, I have learned about the importance of having strong legal knowledge in HR. 

The employment contract is one of many examples where - even if you don’t want to fix every single detail - it quickly gets complex and the contract gains weight in pages. 

No wonder employees feel insecure when having to sign a new contract. Either they change employers and receive a totally different version than what they were familiar with. Or they get promoted and might need to sign a new contract within their organization. 

I dare to say that even many HR professionals cannot explain a German employment contract line by line. Legal language is not easy to understand or interpret. Some lawyer might have designed the template and HR does not fully own the content. Or they wrote something themselves, but don’t have the knowledge to assess whether it is legally accurate and will withstand German ruling. 

So it happens that the new contract would be sent to the candidate or employee without further explanation. "Please read and sign it. And call me if you have any questions."

This does not feel good! Whether you want to join a new company and still have to decide about the offer or whether you are supposed to be promoted: 

You want to feel good and confident about any legal relationship you are about to accept. 

You don’t want to risk any trap. 

And even if there is no trap, you want to make sure that you understand the mutual commitment you are about to enter. 

There are voices who say that you should not care too much about the contract. That it is a good company with a good culture and the relationship should always be based on trust. 

I agree in general. There is no need to get picky about minor details that could have been written differently. Candidates who go into too many details and don’t dare to accept a contract which was not 100 percent individualized for them personally, will have a hard time working with compromises and accepting uncertainty in general. (Sometimes it is only during the contract phase that I realize why it is better not to bond with a certain candidate.)

However, a contract is a contract. If you spend many years with a company and see management or supervisors pass, chances are high that no one will remember what had been promised to you many years ago. And that is when it matters to have crucial points fixed in written form. 

So here is my advice for any HR professional regarding the presentation of a contract:

Take enough time. Of course, it is easier and more efficient to just send out a draft and let the candidate read through it. 

Your goal however is to create lasting relationships built on mutual trust and confidence. 

For that, you take as much time as necessary. Ideally, you will invite the candidate or internal employee to sit with you in a room. If that is not possible (the candidate might currently live in a different region), you will invite them to an online meeting and present the document on the screen. 

I know what it feels like for HR to repeatedly go through a contract which has 18 pages and most of the content seems uninteresting to even talk about. 

But this is the moment for differentiation! 

Seriously. Even if you have to go through the same conditions every single day, make it is as interesting and informative as possible for the recipient. 

Sit down and read every single word to them. I mean it. Read every line on every page out loud. Don’t omit anything: not the company name, not their name, not the date. 

You think it is superfluous? Not at all. Because those are the little signals that build trust!

The candidate is worth your time and you use the occasion to show that you value them. 

You invite the person to interrupt you and ask questions whenever needed. And if they don’t ask anything, you pause between topics and ask if they can follow you. 

Moreover, I would not only read what the words say, but repeat or comment each topic in my own words. 

And I would highlight what is important for them and what is "general legal stuff". 

Here is another point for differentiation. Be very honest! 

Being honest means that you also share difficult or negative points with the candidate. No one wants to think about what could go wrong in a relationship when it is only to begin. However, this builds trust. If HR is open to share with you what you need to know when maybe separating from the organization or when becoming severely ill, they will be there for you in difficult times. With respect. 

Moreover, you will always have the candidate sleep over the contract. There might be urgent exceptions where both sides are fine with quickly signing, but in 99 percent of all cases, there is enough time to give some days or even a week. 

This being said, you will offer the person to ask any remaining questions at the end of your conversation, and you will add that they take the contract with them, reread it at home without any pressure and reach out to you in case of unclarity or doubt. 

You sure don’t want to lose the candidate due to the paperwork or maybe because of a misunderstanding line. 

And if the individual has a very complex contract to sign or if they feel very insecure, you proactively invite them to contact a lawyer to double check what they are about to sign. Of course, you don’t want the signing phase to be too lengthy - and therefore you will communicate a clear deadline which could be 3 to 14 days in total - but you again try everything to build trust with the candidate and value the time they need to feel good about the contract. 

In most cases, you will have a feeling whether they will sign it rather quickly or if they are hesitant. Make sure that you know if they have another offer in parallel. 

If you don’t hear back after a week or if the agreed deadline has already passed, give them a call and ask, if they need more information before signing the document. Some people are slow with life-changing decisions, so you want to be the one helping them without adding unnecessary pressure. It is important to differentiate between talking someone into an employment contract and guiding them towards the right decision (which is not necessarily joining your organization). 

If you like the candidate, I know how difficult it can be to accept that - after having invested so many hours in them - they finally don’t want to work for you. Or that they prefer another offer. However, I am convinced that the individuals who met with the candidate either did not do a good enough job to represent the organization well and to bond with the candidate. Or that it is better that the contract did not work out. Whatever it is, accept it. 

You may even tell the person that you are disappointed that they won’t join the company and that you had wished for them to come and join the team. But you will always add that you accept their decision and thank them for their application, for getting the chance to get to know them during the hiring process, and that you will always gladly hear again from them in the future. Maybe they even want to share with you what made them decide against your offer. 

(I will not write about counteroffers here, as there is some complexity to that topic as well.)

From my experience, most candidates will sign the contract, if both sides have made it that far and have been honest and transparent during the entire process. This means that you will soon onboard a new individual to your organization and I wish you all the best and a long-lasting employment relationship.