Bonds May Boomerang

Though it may seem bonds are safeguards against cost incurred on employees. Bonds actually may become costlier for the employer. What if after joining a company the fresh graduate trainee realizes that he is in the wrong place, he is not fit for the nature of the job and expresses his disinterest in the job. Will any company want to continue to incur training cost on such employees only because they have incurred hiring cost and some initial training cost? Better option is to adjust him in some other responsibility with fresh training or to let the employee leave in order to follow his interest. Conditions may arise that the employee is on bench for a long time without any project and wants to leave as he finds no value addition to his skills or wants to leave as he feels he will be axed due to the poor market conditions. Simply because he has signed a bond will he stop searching for a job and wait till he wastes some more time on bench or till he is given a bad rating and low increment? What if an employee who wants to leave sticks to the company only because of the bond but shows no commitment to his job? In such case bonds for the employees could indirectly restrict their mobility. It could hamper the bonding between the employer and employees proving costlier for both parties. Companies instead of focusing on indirectly restricting the employee’s mobility can always focus on building diffuse employment relationship based on mutual trust. If the attrition rate of the employer is at par or below the industry attrition rate there is nothing to worry. If the rate is above the industry attrition rate, the employer must go for introspection on its own practices and reasons for high attrition. Influence and persuasion will work better than forcing employees to stay due to the threat of bond.

Employers have the right to protect their reasonable interest. So bonds should be used with discretion. For example if the company offers very specialized high cost training they may ask for a bond to at least recover the costs incurred. A generalized bond will not fulfill the aim to retain talent.