Bond for the weak hearted and Beyond the bond.

Those who want to go, go; while those who have a weak heart honor the bond. This, I have learned from my experience, is the general consensus about the employment bonds shared among the workers in the IT and ITES industry. However, cases where the bonds are broken are minimal. At the 25th anniversary celebration at Infosys Mysore, the HR head of Infosys was asked what he plans to do about the people who do not honor the bond. His reply was, “Infosys does not want the people with this attitude anyways. We will let such employees go. We can’t have a recovery team like the notorious bank loan recovery agents. That is not our purpose. The objective is to be the employer of choice”.

The top three recruiters of 2009 have a cumulative strength of 3500, do not have any bond and have an average attrition rate of 12.6%. Infosys with over 1 Lakh employees reported an attrition rate just marginally above, standing at 13.3%. Having the bond does help for large firms. I agree that employment bonds are a successful instrument to control attrition. But their ethicality and legality can definitely be questioned. A more important issue from the organizations perspective is that these bonds even though stop some employees from leaving, definitely stop the good ones from getting in.

Rani Jain has raised a wonderful point that the organizations need to have a check on their training costs rather than including such costs in bonds. I would like to elaborate more on this point. Many organizations like Infosys train employees without a proper career progression in mind. Employees that are trained in a particular technology are assigned work on a different technology which needs some amount of re-training. Some of them are even placed on the bench after training. There is lot of scope of minimizing the cost here. Also, more importance needs to be placed on recruitment to select the candidates that are more likely to have a long association. The senior managers at Google India, ranked the 3rd best employer of 2009 (SHRM survey), believe that this is their main function. I would like to give an example that I experienced. Infosys selected a manager through its lateral recruitment drive and spent Rs.2,00,000 on his training. This person, with no particular core competency, had switched 4 companies (all of them having bonds of at least 2 years) within 6 years. This definitely is akin to inviting trouble. I agree with Rani, that improvement in the above practices would help many companies in re-evaluating their policies on the employment bonds.

Abhilash Panda spoke about the fact that bonds exist in the field of medicine as well where-in doctors sign an agreement to serve in rural areas for a stipulated duration. But the purpose here is completely different. The purpose here is to provide service to the community that does not have access to proper medical assistance. The government here does not have the motive to retain their doctors in government service or recover the training costs.

If recovering training costs is the motive, then there are many options that can be explored. Firstly, organizations do not train employees with a philanthropic motive. They train them for their own benefit. Many organizations follow a no-bond policy but employ different methods to recuperate their training costs. Some organizations pay lesser salaries during the induction and the training period and then give a hike. I worked 3 months for a company called “Quagnito Solutions”. Here, every employee had the choice of area he wanted to pursue and paid 25% of the training cost that was deducted from his salary on a monthly basis. These strategies are also debatable, but the point I want to drive home is that bonds are not the only successful method to recover training costs and organizations need to look beyond this to be the employers of choice.