New Grad Orientation Contracts

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I've seen older posts on this site about New Grad Orientation Contracts that require new nurses to stay on their unit for a set amount of time (up to 2 years) or else be forced to pay back orientation costs to the facility. Most of those posts told new grads to run as fast as they could away from the facility.

However, a lot of the places I've applied to all have those contracts. Is this becoming more common?

What happened to sign on bonuses in order to retain nurses?

To clarify, they require you to sign a "new grad residency" contract, which is 8-12 weeks of orientation. If you pass their orientation period you are required to work on that unit for 2 years (and in some cases required to stay at the facility for an additional year). Failure to do so, as stated in the contract, requires the nurse to pay back orientation costs of 10,000 dollars, which is pro-rated down slightly the longer you stay.

I understand that nurse retention is important, but this seems threatening and morale crushing. I completely understand having to sign a contract to pay back a sign-on bonus if you leave early, but having to "pay" for my orientation seems a little ridiculous. It makes me wonder what's wrong with the facility that would make nurses want to leave so badly that HR thought this contract was the only way to keep nurses working there.

Should I follow the older posts advice of running from these facilities or do I bite the bullet and just accept that this is what I have to do in order to get experience?

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Specializes in school nurse.

Is it a good hospital? is it a residency in a specialty that will benefit and further your career? Having a 2 year (or more) stint on your resume for your first nursing job is a good thing.

That being said, try to souse out if the facility is a hot mess before committing...

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It is a good hospital. Lots of high ratings on glassdoor and on Google (from staff and patients) and everyone there I spoke with or saw was friendly and cheerful, which is always a good sign. It's a smaller hospital though that does only cardiac issues (No ER, L&D), so I guess that could count as a specialty. And I do believe it will benefit me and my career to work there.

I am planning on staying at the facility for the 3 years required by this contract, it just seems scary having that contract hanging over my head. Especially since the "residency program" is nothing more than 8 weeks of orientation with a preceptor.

Working as an LPN, I never ran into having to sign a contract like this. Ever.

So it just surprised me that when they were going over the paperwork, the HR person went over every single piece of paper with me....except for this contract. She handed it to me and asked me to read it and then walked away. It was like she didn't want to talk to me about it at all. I read it and then told her I had some questions. She was more than willing to answer all of my questions about it and was friendly while doing so. It just struck me as weird that she didn't go over it to begin with.

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Specializes in NICU, ICU, PICU, Academia.

Not going to debate the merits of such contracts- but you must consider that it costs an AVERAGE of $60,000+ to replace an RN by hiring and training a new one. Facilities invest a substantial part of their budgets to nurse turnover.

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It all comes down to options. If you have better ones, takes them. If you don't and you want to be employed...

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Specializes in Adult Primary Care.

Is there an out if you have a partner/spouse that is transferred to another location for their job?

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There is no out for that on the contract. While my spouse is active duty military, he is retiring next March and won't be transferred again. We are moving to the area where this hospital is, so I'm not worried about getting moved and having to break the contract.

There aren't any better options since all of the hospitals around here are requiring similar contracts. So no matter where I go, I'm going to have to sign something along these lines.

I have read that a lot of new nurses seem to be quitting in their first year, so I can understand why facilities are worried about losing new hires and losing all the time spent training them. It just seems to me that using a sign on bonus (that would have to be paid back if you left early) would seem a better enticement than a contract that comes across as "You WILL stay here or we WILL sue you for X amount of dollars."

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If I were an employer, I would have those contracts. It has nothing to do with being so desperate for new grads.

It just amazes me the entitled attitude of some new nurses, whether a new grad or new to a field, that the employer should embrace the opportunity to teach/give them job skills while being paid. Of course an employee has to be paid but it's the attitude of being owed this education without bringing it to the job. And feeling completely justified in leaving for a better offer following orientation.

In fairness to the existing nurses who are greatly impacted by the high turnover only to start over with yet another new grad, exhausting and frustrating while they carry the burden, it benefits them as well.

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Specializes in NICU, ICU, PICU, Academia.
There is no out for that on the contract. While my spouse is active duty military, he is retiring next March and won't be transferred again. We are moving to the area where this hospital is, so I'm not worried about getting moved and having to break the contract.

There aren't any better options since all of the hospitals around here are requiring similar contracts. So no matter where I go, I'm going to have to sign something along these lines.

I have read that a lot of new nurses seem to be quitting in their first year, so I can understand why facilities are worried about losing new hires and losing all the time spent training them. It just seems to me that using a sign on bonus (that would have to be paid back if you left early) would seem a better enticement than a contract that comes across as "You WILL stay here or we WILL sue you for X amount of dollars."

Signing bonuses are for experienced nurses who bring value to the organization. New grads are a liability - financially and resource-wise.

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At my hospital you mostly see these contracts with the ICU - what happens is that people get their ICU experience (and they're not necessarily new nurses, btw), get their NP or CNA, then bounce. So those floors have at max 2 years from those hires, which is not a very good return in investment. So it is not necessarily to do with any "desperation" to hire since the applicant pool is actually pretty competitive for the ICU but it's just they want to make sure people stay. New grad contracts are for the same reason - maybe people want ER or ICU or any other specialty but as a new grad with 0 experience, some places don't hire those, so the new grads get in where they can, get their 1 year and then move.

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Specializes in Emergency, Telemetry, Transplant.

Personally, I can see both sides of this issues. It does cost a hospital a lot to orient a new nurse, and then for the hospital to be left with nothing when that new grad hits the road after less than a year? I can certainly defend it for smaller hospitals, where a few new grads leaving after orientation really can hurt the bottom line. OTOH, I work for a large health system. To my knowledge, we do not force new nurses to sign these contracts, and I would have a tough time defending the system if we did.

Even for the small hospitals, the contracts leave a bad taste in my mouth. It seems quite unfair to me that there is no out for nurses whose spouses/significant others might get moved as part of their jobs. Especially if this hospital is the only game in town. I can see why the hospital wants to protect itself from a nurse who just flakes on the job after 6 months, but I would be more comfortable with the idea if they had reasons, with documentation of course, to get out of the contract.

To the OP, only you know what is best with you. If you feel comfortable with the job are fairly certain that there will not be a compelling reason for you to move in the next 2 years, then you should probably go for it, especially if no other viable options exist. As I said, though, you are the only one who knows how comfortable you are with the terms of the contract.

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I advised my daughter who was hesitant to sign a contract (with good reason), to treat it as a bonus.

Set aside as much as possible early on, and by the end of the contract you have the "bonus" in a savings account. If you have to leave, at least you've set aside some of it to make it less painful to pay back.

Obviously this has limitations... If you leave early on, you have less saved - for my daughter though, who is a queen of frugal (like her mother), this made perfect sense. Her contract was $5000, I can't remember if it was one or two years.

I have no problem with contracts for the reasons others have already given.

I do believe there should be legitimate outs in it to be fair and reasonable to both sides. Because while they are protecting themselves from being taken advantage of, they should not take advantage of situations that are out of the new grad's control.

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