Struggling with Employee Turnover: Can We Legally Use Bonds to Retain Staff in India?

Hello, we are a small marketing company supplying products used in quality control, specifically in the pharmaceutical industry, and we are facing the issue of employee attrition. We operate in a niche industry where acquiring trained manpower is a challenge, leading us to invest significant time in training individuals to perform effectively.

Employees join our company, gain experience, and then leave in a short period, resulting in business losses and the need to search for replacements.

Employee Retention Strategies

Is it possible for us to have employees sign a bond committing to stay for 2.5 years? And is this legally enforceable in India? Additionally, are we allowed to retain a security cheque from employees?

Assistance Required

Could someone assist us in drafting the bond and the employee agreement letter?

Bond Enforceability and Employee Retention Challenges

A bond is not legally enforceable not only in India but also in other countries, especially developed nations. However, if you spend a quantifiable amount to train an employee, to that extent, a bond can be established. There should be training costs exclusively for an employee; without them, you cannot create a bond.

Moreover, in a company where high attrition rates exist, do you believe people would be willing to join if a bond for 2.5 years is imposed? I doubt that individuals would be inclined to join a private company that lacks a good track record of employee satisfaction if asked to sign a 2.5-year bond. If you had positive employee satisfaction reviews, you likely would not have experienced such a high level of attrition.