How can one ensure that employee attrition prior to their completion of 1 year is minimized? Conventional ways that companies have been using to minimize employee attrition include getting them to "Sign a BOND" indicating that they would continue to work for "X" years and/or if they still wish to leave, they shall be liable to pay an amount of Rupees "Y" which the company spent on training them.
Are there any other/better ways than "BONDS"? How about asking candidates to surrender their degree certificates for the duration that the employee desires to stay with the company?
Regards,
AM
From India, Mumbai
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Are there any other/better ways than "BONDS"? How about asking candidates to surrender their degree certificates for the duration that the employee desires to stay with the company?
Regards,
AM
From India, Mumbai
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Hi Amit,
I can understand that you are eagerly trying to hunt down ways to reduce the attrition level; however, you miss checking why your employees leave your organization. If the exit numbers are high within a year, then there is something terribly wrong. How many times have you analyzed the root cause of the attrition? Do you conduct employee satisfaction/engagement surveys? If you still depend on bonds and surrendering of educational certificates (which is illegal), it may be a short-term solution. Remember, "We make the employees, and the employee makes the organization."
From India, Bangalore
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505I can understand that you are eagerly trying to hunt down ways to reduce the attrition level; however, you miss checking why your employees leave your organization. If the exit numbers are high within a year, then there is something terribly wrong. How many times have you analyzed the root cause of the attrition? Do you conduct employee satisfaction/engagement surveys? If you still depend on bonds and surrendering of educational certificates (which is illegal), it may be a short-term solution. Remember, "We make the employees, and the employee makes the organization."
From India, Bangalore
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Hi Mahr,
Thanks for your response and the kind advice. We are aware of employee satisfaction and engagement and have been working on it recently. We have also been analyzing the root causes and have been fairly successful in reducing attrition.
Regarding the surrendering of educational certificates, my predecessor had initiated this process. However, it would be beneficial to have a deeper understanding of the specific statutes or sections under which it may be considered illegal.
Unfortunately, as is often the case, some individuals who do not comply trigger the implementation of such processes that are unfriendly to employees (and which management would have been reluctant to implement due to their unproductivity), resulting in innocent employees bearing the consequences.
Anyway, I would appreciate it if you could provide details about the statutes or sections that deem making employees surrender their educational certificates or sign a bond as illegal.
Regards,
Amit
From India, Mumbai
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Thanks for your response and the kind advice. We are aware of employee satisfaction and engagement and have been working on it recently. We have also been analyzing the root causes and have been fairly successful in reducing attrition.
Regarding the surrendering of educational certificates, my predecessor had initiated this process. However, it would be beneficial to have a deeper understanding of the specific statutes or sections under which it may be considered illegal.
Unfortunately, as is often the case, some individuals who do not comply trigger the implementation of such processes that are unfriendly to employees (and which management would have been reluctant to implement due to their unproductivity), resulting in innocent employees bearing the consequences.
Anyway, I would appreciate it if you could provide details about the statutes or sections that deem making employees surrender their educational certificates or sign a bond as illegal.
Regards,
Amit
From India, Mumbai
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In my opinion, legally, there will be no points in taking a bond and asking them to surrender the certificates. There is no such statute to surrender certificates. As Mahesh rightly said, we have to see the root cause and try to resolve the problem. There may be many factors like the working environment, salary, etc.
From India, Mumbai
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From India, Mumbai
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Bonds are not enforceable unless there has been substantial money spent on training. Keeping someone's original certificates as security is illegal; it is a criminal offense, so again, not a good idea. Keeping back a part of the salary to ensure that he does not leave is another method people use, but it is a violation of the Payment of Wages Act, so it will cause a problem.
Instead, you need to use a "Bonus/Incentive" clause for those staying for a certain period. This would be a part of CTC but not a part of the monthly salary. However, this is again a tightrope walk. The amount must be large enough to entice the person to stay on to claim it but not large enough to affect your budget. This reduces his take-home pay (though the CTC looks larger), so you need to be careful. In case the take-home pay decreases significantly, he will walk off for a better job anyway. And of course, ensure you are not paying below minimum wages.
From India, Mumbai
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Instead, you need to use a "Bonus/Incentive" clause for those staying for a certain period. This would be a part of CTC but not a part of the monthly salary. However, this is again a tightrope walk. The amount must be large enough to entice the person to stay on to claim it but not large enough to affect your budget. This reduces his take-home pay (though the CTC looks larger), so you need to be careful. In case the take-home pay decreases significantly, he will walk off for a better job anyway. And of course, ensure you are not paying below minimum wages.
From India, Mumbai
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Dear Amit,
Have you done a study of the employee turnover? Have you tried to find out why employees are leaving? Rather than conducting this analytical study, you wanted to adopt a coercive method of signing a bond. What if employees abandon even the bond also? You may file a suit in court. But then how many cases would you like to fight? What effect will it have on the organization's culture?
The basic issue could be that newly joined employees are not getting engaged with the organization's culture. But then to address these cultural challenges, why would you like to adopt legal means? Do you think companies can grow by creating or invoking provisions of the law?
To understand why employees leave or to conduct attrition analysis, click the following link. It is my reply to the past query on similar lines:
https://www.citehr.com/519562-employee-turnover-report.html#post2211229
To know why employees quit the company, click the following link:
https://www.citehr.com/433012-employees-leaving-without-notice.html
Before fixing the organizational flaws, if you adopt the legal route, it could complicate the problems further. Please be cautious on that count.
Thanks,
Dinesh Divekar
From India, Bangalore
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Have you done a study of the employee turnover? Have you tried to find out why employees are leaving? Rather than conducting this analytical study, you wanted to adopt a coercive method of signing a bond. What if employees abandon even the bond also? You may file a suit in court. But then how many cases would you like to fight? What effect will it have on the organization's culture?
The basic issue could be that newly joined employees are not getting engaged with the organization's culture. But then to address these cultural challenges, why would you like to adopt legal means? Do you think companies can grow by creating or invoking provisions of the law?
To understand why employees leave or to conduct attrition analysis, click the following link. It is my reply to the past query on similar lines:
https://www.citehr.com/519562-employee-turnover-report.html#post2211229
To know why employees quit the company, click the following link:
https://www.citehr.com/433012-employees-leaving-without-notice.html
Before fixing the organizational flaws, if you adopt the legal route, it could complicate the problems further. Please be cautious on that count.
Thanks,
Dinesh Divekar
From India, Bangalore
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Employee Engagement – Scaling Down Attrition.pdf
SAMPLE Employee Attrition Calculation sheet for FY 09-10 .xls