Is Making New Joiners Sign a Bond the Right Way to Retain Talent? Let's Discuss!

Well friends, please advise... Is getting into the system of making new joiners sign a bond a right approach or not? The purpose why management wants to do this is to retain people whom we groom, but is it the right practice as there have been a lot of cases regarding this in the past? Please share your views.

Rolly

Hi,

I don't think the practice is any bit bad. When the company is investing so much in training and developing an individual, and if the individual, instead of being productive for the company, uses the training provided for their own professional growth, then it's natural and within the purview of professionalism to have them stay with the company for a certain period of time.

It's even more important to retain an employee when commitment, integrity, and honesty are lacking, and people are only looking to exploit their increasing demand in the marketplace.

Looking forward to hearing from others.

Regards

Hi, thanks for the reply.

The point is well answered as far as the T&D aspect goes, but the issue also involves making new joiners sign a bond for one year, a practice usually done in the IT sector. So, are such practices healthy enough considering our constitutional stand on the right to livelihood and on bonded labor?

Rolly

Dear Srivatsav,

Taking a bond from the candidates is not ethical, in my opinion. However, I am currently working as an HR professional in a company that enforces a 2-year bond.

When I was searching for an HR job, I encountered frustration due to the limited availability of HR positions, with most companies showing a preference for female candidates in this role. I don't understand why this bias exists.

During my quest for a desirable HR position, I found a new company where the employer required me to sign a 2-year bond. I can provide insights from both the employer's and employee's perspectives on this matter.

From the employer's standpoint, they may view the bond as necessary because they invest in training employees and expect a commitment for a certain duration to ensure continuity of operations and maintain efficiency.

On the other hand, from the employee's viewpoint, agreeing to the bond may be the only viable option when better opportunities are scarce.

However, some employers misuse bonds to exploit employees, treating them as commodities and underpaying them by taking advantage of the bond period to save costs.

Employers who engage in such practices should not go unchallenged.

In conclusion, I believe that agreeing to a bond is acceptable if the company offers promising growth opportunities, fair compensation, and a positive work environment. Otherwise, if these aspects are lacking, it's advisable to explore other available options.

Thank you for your attention to this matter.

Sincerely

Dear Vishwanath,

I feel that if the company environment, remuneration, and growth are good, then there is no need for any bond, as no employee would prefer to leave such a company unless some other reasons operate, right? So, I agree with you.

Hi Friends,

Are we not forgetting about "The Bonded Labour System (Abolition) Act, 1976"? Answer for yourself, how is it not a violation of the above act. :o

Let us understand that people work by choice; if you love someone, don't sign a bond with him, and there would be a reasonable probability that he stays with you. And the moment you sign a bond with him, the love is lost from the relationship, and even the probability of him staying with you would tend to zero. :lol:

In a nutshell, don't be overly possessive. The concept applies to both love and employees. Freedom is the best bond.

Also, think about the legal validity of such bonds and what you can do if someone leaves you within the bond period. Nevertheless, in case the company is investing an extraordinary amount of effort/time/money, then it has the right to get returns from the investments. But please, do not consider routine training and on-the-job development as 'extraordinary'.

Sincerely,

Vikas Pareek

Hi All,

Getting employees to sign a bond is illegal. No company can legally bind an employee to stay with them for a particular duration. Bonds do not have any legal standing if the employee sues the company. Hence, getting an employee to sign a bond (especially freshers) is more to act as a deterrent and discourage the employees from quitting within a short duration.

Instead, you may want to choose to add a clause in his/her offer and/or appointment letter which says that should the employee choose to leave the company within an x period, then he/she will be required to reimburse the company the cost of training, which will be equivalent to x amount of the employee's CTC. I am not sure whether the above has legal standing; I will need to check it out, but it definitely will protect the employer's interest.

Hope the above helps.

Richa

Hi Richa,

Thanks for your views, but if getting a bond signed is illegal, then how come all these IT companies are able to do it while recruiting freshers, especially?

It is more of a deterrent than having legal validity. Obviously, freshers aren't aware of the legal status of the bond and hence agree to sign it.

So, you mean to say that it is completely illegal to get a bond signed, right?

Are you very sure of it.

Taking a bond from the candidates is not ethical, in my opinion. However, I am currently working as an HR professional in my company which requires a 2-year bond.

When I was searching for an HR job, I was frustrated as there were very few job opportunities available in HR, and most companies seemed to prefer females for this position. I don't understand why.

When I was desperate for a good HR position, I found a new company where the employer requested a 2-year bond from me. I can provide reasons for this requirement from both perspectives.

Employer perspective: The employer provides training for a certain period and expects the employee to stay with the company for that duration.

For certain jobs, continuity of operations is essential. An employee cannot leave the company in the middle as it would impact operational efficiency.

Employee Perspective: Due to limited options, some employees choose to accept the company's bond.

However, there are some employers who aim to control employees as if they have been purchased and exploit them by making them work extensively during the bond period, paying them lower salaries. These employers should not go unchallenged.

An employment bond is unnecessary!

A training bond is necessary, especially when the training being allocated is something above the regular on-the-job stuff whereby both the employer and employee will benefit from this reskilling process (stating the obvious, right? 😂).

I would like to mention here that one must carefully cost the training, ensure that housing/lodging where applicable, trainer fees, etc., are included in the cost of the bond amount. This means that if an employee is asked to sign a training bond of Rs. 1 Lakh, then one must ensure that the gap between the cost of training vs. the cost of the bond should not be very huge to create dissatisfaction.

Above all, transparency in this policy as well as transparency in dealings both internally and externally will surely help in retaining employees. For more on the topic of transparency, check the book "Maverick" by Ricardo Semmler.

I agree, and I personally believe that signing a bond for training purposes is okay, but signing a bond while recruiting is a direct violation of the right to livelihood. The only point I want to further understand is whether it is ethical or unethical. If a company decides to implement a bond system during the recruitment process, are there any legal implications to consider?

Rolly

Hi Friends, Can I have a format of such legal bonds that can be signed between associates working in an organization and have undergone technical training abroad, from the employer's perspective? It would be of great help to me.

Thank you.