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What is a Secondment Agreement?

Secondments are a convenient way to fill a temporary shortage of resources in your business. Additionally, they allow you to leverage the expertise of professionals outside your business or increase your business’ exposure to new ideas and practices. Secondments are becoming increasingly popular across a range of industries as they can be a great tool to foster business relationships and encourage the growth of employees. This article will help you understand why you might choose to enter into a secondment arrangement, how you can make the most out of it, and what you should consider before entering it. 

What is a Secondment?

A secondment is an arrangement with another business to send one of their employees to support your business for a specific period. You may wish to enter a secondment arrangement when you need extra support or a particular set of expertise but cannot justify hiring a permanent employee. This could be due to budget limitations or because you do not have an ongoing need for this assistance long term.

A secondment can be internal, where an employee from one department goes to another department within the same business. Alternatively, you may utilise an external secondment where you host an employee from another business. An employee on secondment, internally or externally, is known as a secondee. The type of secondment you choose will depend on your business’ particular needs and the expertise available to you. 

When entering a secondment arrangement, it is essential to put a secondment agreement in place, particularly when you bring on an employee from an external business. A secondment agreement will set out the commercial details of the arrangement and the terms on which the arrangement is to proceed.

Inclusions

You should ensure the agreement is perfect before the secondment begins to ensure that you can make the most of the arrangement. A few key things to consider when preparing to enter into a secondment agreement include the:

  • term, which is how long the secondment arrangement will last;
  • role, which are the duties the employee will perform whilst on secondment with you, including any limitations or restrictions; 
  • supervision, which refers to who will be responsible for managing the employee’s performance; 
  • remuneration, which is the payment arrangements for the employee; 
  • non-solicitation, which restricts you from offering the secondee employment within your business;
  • replacement, where if the secondee resigns from their position or is not a good fit for your business; and
  • confidentiality, where you want to protect confidential information if the secondee has access to commercially sensitive information.
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Benefits of a Secondment Arrangement

Secondments have huge benefits for both businesses and secondees. As a business owner receiving a secondee, you can tap into expertise you may not otherwise have access to. Additionally, you can gain valuable insight into how other businesses may do certain things, which could help you consider process improvements within your own business. Having a secondee will also benefit your employees, as they can learn from the secondee and gain new perspectives.

The same applies in reverse for a business sending an employee on secondment. The secondee will gain valuable insight into how another business operates and may bring back interesting ideas for process improvements (subject to confidentiality obligations). They may also gain skills and experiences which can be applied in their home role or may be able to expand their areas of expertise.

Ultimately, secondments lead to the development of good business relationships and networks and encourage knowledge sharing between these networks. Therefore, they benefit all parties.  

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Key Takeaways

Secondment arrangements are a valuable tool when you require additional support in your business, whether in terms of extra hands or expertise. They allow you to effectively rent an employee from another business for a specific period. Thus, they allow you to access the additional support you require without needing to hire a new in-house employee. Secondments benefit both businesses and employees. However, certain things need to be considered when entering such an arrangement. You want to ensure the secondee will be a good fit for your business in terms of their attitude, expertise, and the role they will perform for you. Furthermore, you should ensure the contractual agreement contains all key elements. 

If you need assistance determining which document you require, our experienced contract lawyers can assist as part of our LegalVision membership. For a low monthly fee, you will have unlimited access to lawyers to answer your questions and draft and review your documents. Call us today on 1300 544 755 or visit our membership page.

Frequently Asked Questions

What is a secondment?

A secondment is an arrangement with another business to send one of its employees to support your business for a specific period. 

What are the benefits of a secondment?

Secondments benefit the business receiving the secondee, the business sending the secondee and the secondee themselves. The experience allows host businesses to access subject matter experts they may lack in their company. Additionally, it will allow the secondee to gain new perspectives which they can bring back to their primary employer. 

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Harmanjot Kaur

Harmanjot Kaur

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