Employment Bond:Good or Bad

Employment Bond is an agreement which is use by the company to force the employees to stay with the company for a particular period of time. If we look from the perspective of the company, one of the primary reasons behind such kind of bonds is that the company spend a lot of money in giving the training to the fresh recruits. The benefits of the investment which is made by giving training to the employees can only be received if the employees work for the company for a particular period of time. The bond which employees sign varies from industry to industry. To become productive in some organisations require some time, and company will lose the training costs incurred if the employees leave that company before that. Generally if the training given to the employees is more specific, the conditions of the bond are kept more stringent. In a multinational construction company, the employment bond signed by the fresh management trainees is as high as 3 lakh if they leave before 3 years. This is because of the time which will be required by the employee to learn the nitty-gritty involved in this industry and to start producing results.

In addition to the training cost, a huge hiring cost is involved in hiring employees. To save these cost company make use of employment bond.

Another important reason is the competition in the recruitment market. This fact can be well understood by the fact that more reputed a company in the job market, less are the conditions while joining. This is because of the fact that they know their company is best in that particular sector and no one will leave them to join other companies. The example for this can be seen in case of public sector bank. If you are joining S.B.I as a probationary officer, there is no bond, but bond exist for the same post in other banks such as Bank of Maharashtra etc. This is because S.B.I knows that they are best in that particular sector and the rate of attrition is less for them. But if the same company sends any officer for higher education, they use employment bonds to make sure that officer stays with the company for a particular period of time. This is so because after getting higher education the chance to leave the organisation for better offers increases. It is quite justified as if the company is spending the amount for giving you training then they will expect return on that investment.

Employee thinks the bond as a way to imprison them in the company for a particular period of time. As an employee one is always looking for better job offers and they want freedom in changing jobs and to look for better options. From the point of view of employers it is sometime necessary to save huge hiring and training cost associated with recruiting fresh candidates and to keep their business running. And from the point of view of the employee, it can be seen as a reason to stay in a company for a particular period, as working for sometime in a particular company is necessary to really learn about the job and culture of the company.