Body Retention

It is now almost six months Selvi joined as maid. She is smart, literate and punctual-five-days-a-week. Just last week returned from her summer holidays. She went to her hometown along with her hubby and two school going children. Unlike earlier maids, she has got one good quality. Though she works at 2-3 houses, she never tells us anything about other employers’ inside stories. There is a common trait in most of the maids. Even if you don’t like listening, maids tell you all the rubbish and they expect you to listen too. If you don’t, that is treated as an insult. In turn, they spread all the bad things about you. To cut the story short, maids do spread/leak out stories of your personal life. One has to factor this before employing one. Even if you put a condition that he/she should not do this/that, that is difficult to enforce/monitor. Don’t be under the impression that if you pay more, they remain loyal to you. That’s generally not done. If you like them, keep them; if you don’t, fire them. There are no binding contractual obligations on either one. Even if there is one, it rarely works.

Recently I came across a news article in Financial Express, which informs that one IT major, while giving increment to their employees, put a condition that they should not join specific rival companies after they resign their present jobs for a specified period. Given the high attrition rates across the corporate sector in general and IT and ITES sectors in particular, employers make all possible efforts to keep the talented flock within their fold. If needed, they put caveats in the job agreements, known as ‘non-compete’ clauses. For the unwary and uninformed employees, this clause acts as a proverbial hanging sword.

The validity of non-compete clause has come up for judicial scrutiny in a number of cases. In almost all the cases, the verdict is against the employer. The judicial rationale is that any action, which restrains trade, is void. The agreement of restraint is unfair, as they impose an undue restriction on the personal freedom of a contracting party. The famous Coca-Cola Vs Pepsi case in 2000 is a one such case.

Demand for the skilled is growing at a rapid speed, whereas the supply is not picking up at commensurate levels. Latest data shows that at the top three IT firms TCS, Infy and WIPRO, the attrition rates are varying between 13-16. That speaks of the seriousness of the issue from the point of view of IT firms. In financial services sector too, the entry level salaries have been skyrocketing owing to the shortage of skilled and experienced professionals. The situation in other sectors is not so terrible, but it is putting HR guys under tremendous pressure.

There are no hard and fast rules as far as retaining the skilled is concerned. Every firm has to adopt a strategy which suits it. More viable option will be to come out with an employee-specific HR policy instead of generic policy. Given the high quantity of personnel employed in an organization, such a policy requires larger resources. But this is the price one has to pay to retain the skilled. Inclusion of non-compete clause in the employment agreement is of no use, unless HR policies are structured to retain the skilled within the fold.