The insurace called "Bond"

Well.. The way i see it.. Bonds are a necessity. The labour market situation in any booming economy is characterized by attrition. And this is by no means limited to entry levels and is nowadays very common at the top of the ladder as well. Nothing new about that!

Obviously when the word "loyalty" is largely non-existent, companies scamper to protect their interests and resort to means that ensure utmost recovery in cases of default! Whether loyalty is a term to be used in these situations or not itself warrants a separate discussion forum, but one we will refrain from. We will stay focussed on bonds. Very evidently, the best way that companies have come up with, to combat this issue is now the subject line of this forum.

Companies have been increasingly realizing the need to find novel ways to discourage employees from making the jump and this desire, understandably, gets invigorated when the company shells out huge sums of money on employees in the name of trainings etc. Being the capitalists that companies are, they would naturally expect to make a profitable situation out of these investments by extracting the maximum returns from the employees.

So, what does this "Bond" do? - I believe that the biggest decisions that people in the corporate world make are motivated by money, though i dont deny here that there are other factors (sometimes these factors outweigh money.. but then, they are rare). There is nothing that discourages employees from making that jump as much as a monetary loss does (especially so, as the main motive in most cases, if not all, is monetary gains) and companies with their vast experience, have been "on dot" in identifying that. The expected impact of these Bonds is one that will act at the roots and discourage employees from even considering a jump.

The Negative Half

Bonds have their own downsides. I will explain this, if i may, with the help of the Call-Center industry. It is one of those industries plagued by very high levels of attrition. Yet, it might come as a surprise that most heavy-weights do not force employees joining at the lower rungs to sign bonds, although some do. The reason, being the nature of the people that apply for the entry-level positions, which is mainly college graduates, and the cut-throat competition. College graduates, more often than not, look at call-center jobs as a stop-gap solution, so they can use it as a filler until they get their more lucrative and status-uplifting IT jobs.

Clearly, when there is a bond that ties you down with an employer for a period of one or two years, it is a huge discouragement and the fresh graduates will be reluctant to apply for any jobs with that employer. Companies in this industry have been quick to realize the underlying intricacies and today, offer jobs without the hassles of a bond, in order to avoid losing the vast majority of its prospective employees.

The negative implications associated, or that has come to be associated, with the term "Bond" are not limited to just the call-center industry; it has its roots deep in just about every industry. The mere presence of the word "Bond" forces a rethink amongst most workers before they take up a job. It is therefore imperative that a company thoroughly thinks it through before choosing to include the bond as part of the employment agreement or otherwise.