Can a bond create a bond??

Some companies have bonds and some companies don’t. Why so? This is the 1^st point we need to ponder about. Probably, few companies believe that they have in them the attraction, the strong culture to keep the employees glued to them and that is why they don’t see bond as an option. Many organizations which recruit in mass and/or where the likelihood of employees leaving is high, the concept of bond is implemented.

In my previous organization, there was no bond as such. Actually the attrition rate is quite low in the organization. Even though it has a separate training school and it invests good amount of money and time for training, it imposed no bond. But if an employee goes onsite to learn a technology and come back and implement it here to create the competency, he has to serve the company for a minimum of 1 year failing which he has to pay a sum which is evaluated based on the criticality of the project. In fact before leaving the job I was given an onsite opportunity to Canada. Though I was pretty sure of declining the offer as I was to move on for my management studies, I did some homework about the bond associated with onsite opportunities just out of curiosity. The HR had a very sensible and valid explanation that the company as such does not believe in bonds and hence it has no bond in normal situations. However when it is about learning a technology in customer’s premises at onsite and then leaving the company, this not only brings loss to the company in terms of its investments but also affects the customer relationship of the company which is unacceptable. Therefore I believe it is absolutely valid for the company to impose a bond in such scenarios. Basically some organizations create a good culture and working condition and keep the employees attracted. They don’t require a bond to retain the employees.

Bonds, to a great extent, are based on mistrust. Big software giants in India have always experienced high level of attrition and therefore they have well made bonds to handle the situation. These bonds compensate for all the losses that the company incurred because of the departure of an employee. In fact employees leaving these companies is so rampant; the companies in a way have created a side business out of bonds – the “bond business”. The amount is definitely fixed at a level where it is well above the cost of training (time and effort-all included) and thus has a profit component!! The problem arises when this amount is too high. As discussed in the earlier posts also fixing the amount associated with the bond is absolutely under the whims of the company but it should actually make sense to the employees. It should not be too high.

In such organizations bonds actually go against creating a “bond” between the employer and the employees. The organization is not bothered about employees leaving as it never makes a loss (in fact some profit by bond business) and neither the employees as they are thinly attached with the organization. It is a kind of vicious circle and the impression can’t be changed easily for these giants. We see a majority of MBA applications coming from such companies. One of my friends who joined such a big firm as a fresher said, “I will have a nice time in the beautiful training campus in Mysore and when I am done, I will leave by paying some amount. I am going for higher studies. So who cares?” We also see a lot of to and fro motion from one giant to another giant. There is indeed a great deal of freedom of mobility even though there are bonds imposed. So the bottom line is bonds are created not to retain the employees (which was the basic motive) but just to provide a shield for investment losses incurred. No organization can hold its employees based on the bonds. In fact bonds loosen the “bond” as it is taken as a sign of mistrust that the company is showing over its employees. But today as long as both the parties (employer and employees) are not adversely affected if not benefited, bonds are fine.