The Hindu Business Line : `Better ways to contain attrition than bonds'

When asked for a comment on Infosys Technologies asking its employees to sign a `non-compete bond', Mr Karnik said he did not want to comment specifically on the company, but said that some large IT companies had managed to maintain attrition levels lower than the industry average without making employees sign bonds or other binding conditions.

"Forcing or using other coercive methods to bind employees is not the right way to go (to prevent attrition)," he said.

Non-compete bond

Infosys recently introduced a non-compete bond for all employees, according to which, an employee will have to wait for six months after quitting Infosys, before he joins a `competitor' who shares a common client with Infosys, especially if the employee in question had serviced the client in the last 12 months before quitting.

This also applies to employees quitting to join a client. The bond indicated Tata Consultancy Services, Accenture, IBM Global Services, Cognizant Technology Services and Wipro Ltd as `competitors'.

Mr Karnik said that he had not read the Infosys' document, but "any company that had such a clause would lose out on some bright employees, as bonds are generally seen as restricting individual growth".

Restrictive

What if Infosys's competitors implemented similar clauses? It is common knowledge that most employees leave one IT organisation only to join another, often a competitor. Such a clause/ bond if implemented industry-wide is likely to restrict even healthy attrition levels necessary to maintain competition. "I do not see other companies taking to it (implementing the clause) as attrition of 10-12 per cent is natural and healthy for the industry," Mr Karnik said.

Mr S. Gopalakrishnan, President and Chief Operating Officer, Infosys Technologies, told Business Line, "This (clause) is nothing new. Others (competitors and clients) also have it. Some times clients insist we have such a clause. We have only formalised it (the clause) across the board."

Employees of IT companies have so far signed bonds against fixed monetary compensation that is paid to the company if the bond is broken. Beyond that, an employee is not bound to the organisation.

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