Insights into global expansion & employee retention

Published: October 30, 2023

Probationary Period: A Comprehensive Overview

In order to comply with company policies and legal requirements, probation offers new hires the opportunity to develop skills, assess their performance, and integrate into the company culture.

Key Takeaways

Placing new hires on a probationary period provides an opportunity to train and develop the skills of newly recruited talents, set performance expectations, assess their suitability for the role, and acquaint them with the company culture.

That said, a probationary period may present unique challenges to both employers and employees that need to be managed properly to ensure compliance with the company’s probation period clause and statutory employment requirements.

By leveraging Playroll, businesses can seamlessly integrate their probationary period management with their payroll process, ensuring a streamlined and efficient onboarding experience. 

A bad hire may cost your company thousands of dollars, especially if the newly recruited employee doesn’t meet the required productivity levels. 

According to Influx, three-quarters of companies report wasting an average of $14,900 on bad hires, with managers spending about 17% of their time supervising underperforming employees.

That underscores the importance of a probationary period as part of a robust onboarding process to get new hires up to speed, assess their performance, and closely monitor their suitability for the role.

This post covers what a probation period is, its benefits, and how Playroll’s expertise and HR support can help you streamline your probation period at work.

Probationary Period Meaning

A probationary period is a set amount of time that companies use to determine whether newly recruited workers are a good fit for their roles. It starts on the first day of employment and lasts a few months. 

During this orientation period, new hires learn the basics of the job through on-the-job training, receive professional guidance, and more.

After successfully completing their probation period, an employee gets a chance for continued employment. If the new hire fails to meet expectations, the employer may terminate their employment contract.

probationary period discussion between two women

Why Companies Utilize Probationary Periods

So, why do companies place new hires on probationary periods? Well, a probation period is a great time for the employer and the employees to determine whether they are a good fit.

The top reasons why companies utilize probationary periods include:

  • Ensuring suitability for the role:  A probation period allows the company to assess the candidate’s skills and attitude in a real work environment to determine their suitability for the role.
  • Managing expectations: Performance expectations are set to determine whether the new employee meets the required standards.
  • Cultural fit: This helps test whether the employee’s work and life values align with the company’s work culture, values, and norms.
  • Training and guidance: A probation period is a great time to train, develop, and enhance the new hire’s skills to align with the company’s expectations.
  • Reducing hiring risks: Probationary periods help minimize the long-term risks, costs, and resources associated with hiring the wrong candidate.
  • Reduced employee turnover: Placing new hires on probation helps lower employee turnover rates, work disruptions, and recruitment costs.
  • Evaluating continued employment: Review meetings are held to assess the new hire’s chance of continued employment depending on their performance.
  • Legal protection: Companies document the employee’s performance during the probation period. That can be helpful in future legal disputes and termination decisions.

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How Long Is The Probation Period?

So, how long is the probation period? The duration of probationary periods may vary based on the company, industry, and the complexity of the role. That said, the standard probationary period is usually between 3-6 months.

Can Probationary Periods Be Extended?

There are specific circumstances that might warrant an extension of a probationary period to allow the employer more time to evaluate the employee. That’s mostly done when the employer has some concerns but wants to give the new hire more time to prove themselves.

The top reasons why an employer may extend the probation period include:

  • Performance concerns: An extension allows the employee more time to demonstrate their capabilities and improve performance.
  • Behavioral issues: An employer may allow a new hire more time to address and rectify a concerning behavior observed during the initial probation period.
  • Skill development: The role may require the employee to take more time to acquire and develop specific skills and competencies.
  • Cultural struggle: Extending the probation period allows a new hire more time to adapt and integrate into the company’s culture and work environment.
  • Personal issues: A new hire may run into personal issues that may affect their performance or availability. 
  • Special projects: New employees may be involved in special projects or assignments that may require more time to complete and assess.

Do Employers Offer Sickness Pay During The Probationary Period?

In the UK, there’s no legal requirement for companies to offer sickness pay during probation. So, whether an employer offers sickness pay during the probationary period varies based on the company’s policies.

In some companies, sickness pay benefits may apply to all employees, while others may offer reduced or no sickness pay benefits to employees on probationary status.

That’s because employers see probation as a trial period, and they tend to offer reduced pay and fewer or no employment benefits to new hires unless they’ve passed their probation period.

You can optimize your payroll process with Payroll to ensure hassle-free administration of benefits to your new employees. Get started today!

Optimise Your Payroll Process with Playroll

Helping Employees Improve Performance During Probation

Helping struggling employees improve their performance is a win-win for your company and the new workers. Ways to help your employees get up to speed and improve performance during the probation period include:

  • Ensure new hires understand their job responsibilities.
  • Set clear performance standards and expectations.
  • Offer training and skill development opportunities to fill skills gaps.
  • Mentorship and coaching from experienced employees.
  • Create a supportive work environment where new hires can comfortably ask questions, share concerns, and seek help.
  • Implement a Performance Improvement Plan (PIP) with clear timelines, performance expectations, and consequences.
  • Schedule regular review meetings to provide feedback and track progress.

What Happens After Successful Completion of Probation?

Successfully completing the probationary period means that a new employee has met the requirements and expectations outlined in the employment contract or job offer letter.

It means that the new hire has:

  • Met performance expectations.
  • Adhered to company policies, rules, and procedures.
  • Demonstrated skills and competence.
  • Fit into the company’s work culture and worked well with the team.
  • Showed ability and willingness to adapt to new challenges, learn, and grow in their role.
  • Maintained professional behavior and work ethics.

At this point, the new hire’s suitability for the role may be confirmed for continued employment through a written confirmation letter or an upgrade of their employment status in the organization’s HR system. Playroll HR support and payroll services can help ensure a smooth transition of employment status in your company.

Unfair termination during the probationary period may have legal implications because probationary periods in the UK are subject to the UK statutory employment laws and regulations.

Our UK country playbook gives you an overview of UK labor laws and how Playroll can help you streamline your hiring process in the UK.

Probationary Period UK

Employers should understand their probationary period’s responsibilities to avoid costly legal fines and penalties. Important legal aspects to keep in mind during the probationary period include:

  • Notice periods: Probation notice periods are shorter than the standard notice period. That means either the employer or the employee can terminate the contract with a shorter notice period.
  • Unfair dismissal: Automatic unfair dismissal or termination during the probationary period for illegal reasons like discrimination, assertion of one’s employment rights, or whistleblowing can have serious legal consequences for your company. 

To avoid trouble, employers should follow fair dismissal procedures, complying with probationary period notice requirements and statutory employment laws.

Compensation During The Probation Period

Statutory employment rights in the UK aren’t suspended during probation, and new hires have the same rights as their colleagues. That includes rights relating to the national minimum wage as compensation for their work. 

New employees on probation are also entitled to the same working time, rest breaks, holidays, and protection from discrimination in the workplace as their colleagues.

Streamlining Your Probation Periods With Playroll

Probation periods are a long-standing corporate practice that helps employers assess employees’ skills, reduce hiring risks, evaluate cultural fit, and determine the candidate’s suitability for the role.

Though they present unique challenges and may come with legal implications for unfair dismissal, these challenges can be mitigated with a robust onboarding process and support system.

Businesses can explore how Playroll’s innovative platform can optimize their payroll process and support their probationary period initiatives. Get started today!

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