There’s a practice among many IT companies (at least in India) to solicit financial bonds from freshers during recruitment. Some of them take it a step further and demand the academic marksheets and certificates of the students as mortgage. What’s more unfortunate is that these include Indian companies. I strongly believe this is illegal, a form of extortion and should be officially declared illegal by the Indian justice system.
Many IT companies force new recruits to enter financial bonds. Is it justified?
- These bonds are one sided bonds and the court of law can deem them null. It can possibly be justified only in a scenario where an employee travels to a foreign country for doing company work and then switches the job there. In this case the company loses a legitimate investment made for a specific reason on this employee. But that too, should be applicable only for the duration of the travel.
- From a moral point of view: India is a highly populated country and getting a technical job is not simple as a fresher because there are many equally qualified candidates. Trading a job with those students who qualify your interview standards seem most inhuman to me.
- While the salary of IT professionals around geographies vary due to GDPs of different countries (and it’s justified), the quality of work of equally capable employees from anywhere is the same. So the company profits equally. The difference is that when the employee is in India, companies have to pay much less than it has to pay an employee in the US.
- Corporates may cite costs incurred in training to groom new recruits. For whose benefit do the freshers undergo training? For them alone or for the output needed from them? The training is a part of a continuous process to develop capable employees and it isn’t limited to freshers alone.
- You are my employee, I have your papers, you have to pay a handsome amount of money if you want to quit. This part is in plain sight. The unheard saga is the part where the juniormost group of employees are constantly afraid of trying to switch to another job which may suit their individual interests or financial needs better because they have to buy out the bond. Isn’t this an abuse?
- In my experience the industry is a challenging and yet fun place to work. But this kind of practices send out the wrong message to a student even before beginning his/her career.
India still lacks strong rules and regulations very specific to the scenarios in IT. For example:
- What’s the duration serving which an employee can leave a company (with certificate of experience) after sending his/her notification of resignation? Currently it varies from company to company.
- What’s the amount a company should pay to an employee who is fired due to reasons related to the company performance or decisions?
Of course there are many companies who strive to maintain high ethical standards and values. But there are many exceptions too. The government and the legal system should start taking active measures to ensure that the best practices are followed everywhere for the benefit of both the employees and the IT organizations.