Employee Attrition Prior To Completion Of 1 Year - CiteHR
Dinesh Divekar
Business Mentor, Consultant And Trainer
Saswatabanerjee
Partner - Risk Management
Mahr
Head - Human Resources
+2 Others

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How can one ensure that employee attrition prior to his completion of 1 Year be minimized ?
Conventional ways that companies have been using to minimize employee attrition is by getting them to "Sign a BOND" indicating that they would continue to work for "X" Years and / or if they still wish to leave, they shall be liable to pay and amount of Rupees "Y" which the company landed up spending in training them................
Are there any other / better ways than "BONDS" ? How about asking candidates to surrender their Degree certificates for the duration which the employee desires that he stays with him..........
Regards,
AM

Hi Amit,
I can understand that you are eagerly trying to hunt down ways to reduce the attrition level, however, you miss to check why your employees leave your organization. If the exit nos are more, within a year, then there is something terribly wrong. How many times have you analysed the root cause for the attrition?
Do you conduct employee satisfaction/engagement surveys? If you still depend on bonds and surrendering of educational certificates (which is illegal), it may be a short term solution. Remember "We make the employees, and the employee makes the organization".

Hi Mahr, Thanks for your revert and the kind advise. We are aware of the employee satisfaction / engagement and have been working on it off late and have also been analyzing the root cause and have been fairly successful in curtailing the attrition.
As regards surrendering of educational certificates, my predecessor had initiated it. However, it would be good to have a deeper understanding of specifics of the statute / section under which it is illegal.
Unfortunately as is the case most of the times, some defaulters cause triggering the implementation of such processes which are employee unfriendly (and which the management would have been reluctant to implement too - as it is unproductive), and the innocent lot pay a price..........
Anyways, would appreciate if you could share the specifics of the statute / section under which making employees to surrender the edu. certs and /or getting them to sign a bond is considered illegal.
Regards, Amit

In my opinion legally there will be no points to in taking bond and ask them to surrender the certificates. there is no such statute to surrender certificates. As Mahesh said rightly that we have to see the root cause and try to resolve the problem. there may be many factors like working environment, salary,etc.
bonds are not enforseable unless there has been substantial money spent on training.
keeping someone's original certificates as security is illegal, a criminal offence so again, not a good idea.
Keeping back a part of salary to ensure that he does not leave is another method people use, but it is a violation of payment of wages act, so it will cause a problem.
So, instead, you need to use a "Bonus / Incentive" clause for those staying for a certain period. This would be a part of CTC but not a part of monthly salary. But this is again a tight-rope walk. The amount must be large enough to entice the person to stay on to claim it, but not large enough to affect your budget...... Again, this reduces his take home (thought the CTC looks larger), so you need to be careful. In case the take home comes down a lot, he will walk off for a better job anyway. And ofcourse, ensure you are not below minimum wages.

Dear Amit,

Have you done study of the employee turnover? Have you tried to find out why employees are leaving? Rather than conducting this analytical study, you wanted to adopt coercive method of signing a bond. What if employees abandon even the bond also? You may file a suit in the court. But then how many cases would you lime to fight? What effect it will have on the organisation's culture?

The basic issue could be that newly joined employees are not getting engaged with the organisation's culture. But then to address this cultural challenges why would you like to adopt legal means? Do you think companies can grow by creating or invoking provisions of the law?

To understand why employees leave or to do the attrition analysis, click the following link. It is my reply to the past query on similar lines:

https://www.citehr.com/519562-employ...ml#post2211229

To know why employees quit the company, click the following link:

https://www.citehr.com/433012-employ...ut-notice.html

Before fixing the organisational flaws, if you adopt the legal route, it could complicate the problems further. Please be cautious on that count.

Thanks,

Dinesh Divekar

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