A probationary period occurs at the beginning of a new hire’s employment, during which the employer evaluates the individual’s performance and suitability for the position. 

A probationary period allows the employer to trial new employees, monitor performance, and determine if they are a good fit for the company. It also allows the employee to assimilate into the business, work environment, and company culture and values.     

Employees under a probationary period may be exempt from standard employment contract requirements, such as a notice period or reason for termination. As a result, probationary periods make it easier for the employer to terminate the new employee if necessary. 

Probationary periods differ worldwide, but most countries require employers to offer a probationary period at the beginning of an employment contract. However, countries including Belgium and Chile do not allow probation periods by law. 

How long should a probation period be?

The length of a probationary period varies depending on local employment law, job level, or company policy. Ultimately, a probation period should provide sufficient time for the employer and employee to get to know each other and understand role expectations before agreeing to a long-term commitment.

In general, probationary periods last between two and six months. However, duration varies significantly around the world. For example, Venezuela permits a maximum of one month for a probationary period while in France, the maximum probation period for office workers is two months, but four months for executives. 

Depending on local regulations or company policy, an employer may extend a probation period if they require more time to assess their employee’s performance. 

Why are probationary periods important?

Probationary periods provide both employers and employees the flexibility to trial the employment relationship. 

Employers can use this period to understand a new hire’s strengths and weaknesses and determine whether they are capable of and engaged in the role. They can also use a probationary period to observe how their new hire works with the rest of the team.

For employees, a probationary period enables them to better understand their roles and responsibilities, strengthen their skills, and gain more insight into whether the job and company align with their professional goals and expectations.

What are the benefits of a probationary period?

A probationary period allows employers and employees to enjoy the following benefits:

Assess employment fit

A probationary period gives managers time to observe the new hire, gauge their performance, and determine early on whether the employee is suitable for a long-term position.

A probation period allows both parties the freedom to opt out of the agreement quickly and without repercussion if the relationship is not compatible. 

Reduce employment costs

A probationary period allows employers to save money on contributions and employee benefits typically required for full-time talent, such as severance, payouts for unused paid time off, or pay-in-lieu of notice. Local regulations may also allow employers to offer a lower salary until the probationary period finishes.
 
A probationary period also allows employers to identify unfit hires and easily end the employment relationship before spending a significant amount on the employee’s salary. 

Highlight professional skills

Probationary periods provide new employees the opportunity to be noticed and prove themselves. By highlighting their skills early on, employees start their employment on a positive note, and employers can scope out high-performing talent for future leadership positions. 

What are the disadvantages of a probationary period?

There are also some disadvantages of a probationary period, including the following:

Negative experience

Employees going through probationary periods may feel undervalued or disconnected from their team. They may experience added stress and pressure to learn new skills, take on new responsibilities, and perform well. Probationary periods can create uncertainty and anxiety for employees, leading to lower morale, confidence, and productivity.

Increased legal risks

Jurisdictions have varying employment laws regarding probationary periods and termination. Employers who do not maintain hiring compliance with local regulations mandating probationary periods and termination may risk legal penalties. Employers must outline clear probationary period policies and develop compliant contracts to avoid risks.

Difficulty attracting and retaining top talent

Candidates may hesitate to apply for a job or accept a position with an extensive probationary period. Prospective employees may view extensive probationary periods as a lack of trust, an unnecessary obstacle, or a sign that the company is not committed to its employees.

Can you dismiss an employee during the probationary period?

Employers may dismiss employees during the probationary period. Most probationary periods allow for more flexible notice or termination requirements.

However, employers should still follow a fair and reasonable termination procedure, even if it is not mandatory for probationary employees, such as holding a formal meeting detailing the employer’s reasons for terminating the employment. Employees on probationary periods can also claim unfair dismissal if they experience discrimination.

What happens after a probationary period ends?

Typically, the end of a probationary period leads to an employment offer, termination of employment, or extension of the probationary period. 

Employment

If both parties are happy with the relationship, the employee is removed from probation and becomes a permanent employee. The employer offers a new employment contract with standard terms, benefits, and other employee entitlements. 

Termination 

If one or both parties are unhappy with the employment relationship, they may end the employment at the end of the probationary period. The employer may determine the individual’s skills are not suitable for the company, or the employee may feel the position is not a good fit. The terms of the probationary period allow for a quick and easy termination process.

Probationary period extension

If the employer needs more time to determine if the employee is the right fit for a long-term position, they may decide to extend the probationary period if local employment law allows it. The employee may also request to extend the probationary period if changes occurred during the trial that affected the employee’s role and responsibilities.


Legal Disclaimer: The information available in this guide does not, and is not intended to, constitute legal advice and is for general informational purposes only. You should contact your attorney to obtain legal advice with respect to any particular legal matter. Only your individual attorney can provide assurances that the information contained in this guide—and your interpretation of it—is applicable or appropriate to your particular situation. All liability with respect to actions taken or not taken based on the information in this guide is hereby expressly disclaimed. The content in this guide is provided "as is," and no representations are made that the content is error-free.
 

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