To Bond or not to Bond

To Bond or not to Bond:

In today’s day and age professionals are ready to stay with the right company but with not with a bond or a clause that ties their movement. An employment bond is not a very popular and accepted concept. These are means and ways for companies to have a surety on forced retention of its employees, to control attrition and to get value out of the training hours spent. We can argue that every company would wish that its employees do not leave and every company spends time, effort and training hours on developing its employee then how does one company have a policy that forbids an employee to leave to face certain financial consequences and other do not.

In the current competitive environment and multiple opportunities offering growth to aspiring and ambitious candidates, bond may not be the best way towards retention.

An employment bond may be justified where a company is spending over an above the ‘mandatory’ training hours. Bonds are applicable only if the company has spend money on the personal grooving and enhancement of the employees, but not just a training that helps employees perform better.
For e.g. some companies send organize and send their employees for academic up gradation programs like executive MBA etc. These companies may put a clause for a 2-3 year bond to avail the return of such grooming from the employee.

Mostly BPOs and KPOs put in the clause of 1-2 years simply because the attrition rate is very high in this industry and employees get trained and leave for average jump in the salary. Retention strategies can go beyond just employment bonds. Developing, managing and engaging the employee well enable that he/she does not leave easily, as money is not the only motivator. A conducive work environment and good guidance can keep the employee motivated to stay. Other monetary and growth incentives linked to performance and also serving ESOPs can make a difference to the employee’s longevity with the company.

The Supreme Court of India has clearly stated that no employee can be forcefully employed against his will, just because he has signed a contract with the employer.
The court also has stated that the employer can not hold back any personal document of the employees as they are earned by the employees and the company has no claim on the same.

Also, as per the ‘Indian Contract Act’ contracts entered between two parties if is one sided then such contract would be null and void and most of the bonds are one sided.

In India there have been multiple cases wherein the employees have entered a bond and left and not paid up the money, one way that these people are penalized are they are not given their Provident Fund money or any experience certificate and cannot work for that company in future. But this is not what the company had wanted from the bond. So, is the company actually able to retain its employees through bonds?
In fact a lot of good talent may not even sit for placement for these companies. So the tradeoff is not the best by creating an employment bond.

At the hindsight, it is really an individual’s need and perspective. Many may feel that if the learning curve is high and the company’s investment is justified, a bond can be signed and others may differ as an employee should be allowed to leave after a notice period of 1-3 months.

If a person has to bond with the company and employment bond is surely not the fairest way of ensuring that.