Training Service Bond

Dear All,

I work for a small organization for the past two years, which has a turnover of 2-3 crores per year. I am working as a technical sales and service engineer. My boss has agreed to send me to the USA for a training of 2 weeks for specialized training. The costs for the training, like stay, food, and training cost, are borne by the company in the USA and not by my boss. My boss is paying for local transportation and stay from one place to another in the USA, which would amount to a maximum of 20k rupees. Since I am being trained in something that requires some instruments, the cost of the instruments is about 10-15 lakhs. Now, my boss is asking me to sign a bond for the same reason for a period of 3 years. What should be the reasonable cost associated with the bond if for some reason I have to leave the company?

Do let me know your views.

Thanks,
Ak

Hey guys,

Any quick reply or suggestions on this? I am waiting for your input to move forward with this.

Dear AK,

Members of this forum are outsiders. We do not know anything about the nature of your industry, the nature of your job, the nature of the training that you will undergo, or whether it will benefit your career in the future. Therefore, it is difficult for us to provide comments.

Nevertheless, we can comment only on the conditions that stipulate serving for three long years. A lock-in period of three years is too long. What if you get a better opportunity during this period? Will it not be a financial loss to you? Secondly, in the meanwhile, what if the company tells you to work excess hours? I have seen situations where employees were turned into slaves. Such employees were caught in a pincer. On one side were long working hours, and on the other side was the agreement that they had signed with the employer.

For a moment, consider the opposite. What will happen if you say "No" to your employer? By not doing this training course, will there be a severe negative impact on your career? For a talented person, for a skilled person, opportunities galore in the market. Will you get opportunities even though you do not take this course?

You may agree to go to the USA but not the lock-in period. Would it be possible to bargain for a one-year lock-in period?

Thanks,

Dinesh Divekar

Hello AK,

I differ from Dinesh Divekar here.

On what basis did you calculate/surmise that the MAX expenses towards 'local transportation and stay from one place to another in the USA' would be 20 K INR? Who gave you those figures?

Please note that short distance and one-way trips within the USA are relatively quite expensive. Also, your stay is not for long durations--which again makes it expensive. If you have any friends in the USA, you can check this out.

I fail to see how it matters to YOU as to who bears which cost between your Company and your boss. For all you know, there might be some sort of arrangement there which is and should not be any of your concern.

Two or three years of Training Bonds are quite common for such foreign training trips.

Generally, the Bond period is decided based on the pay-back period [by when approximately would the cost of training be recouped in the course of sales in India]. I guess you surely won't be in a position to have the Sales Forecasts for the next few years.

Another angle--how many employees are there in your Company who CAN/MAY be eligible for such training? While I can't guess that number, I do think I wouldn't be quite off the mark that there would be at least one another person who COULD be your competitor for this training--please correct me. Why did your boss select YOU?

Like Dinesh Divekar queried, ask yourself 'By not doing this training course, will there be a severe negative impact on your career?' I can surely say that the right breaks at the right time separate a small lot from the rest.

Your boss isn't running a charity and neither are you. Just sit with your boss and sort it out keeping BOTH your interests in mind. THAT will take you far in your career.

Frankly, IF I were your boss and IF someone tends to argue on such points, I would straight hire a new guy and promise him this Trip as a carrot. Please remember that your boss has MORE options in this scenario than you.

And where would that leave you? This essentially would be the Worst-Case-Scenario from your perspective. It's for YOU to think if you are OK with it IF it becomes a reality.

Regards,

TS

Dear Sateesh,

In my previous reply, in the very first paragraph, I have clarified that we, the forum members, are outsiders and cannot assess the choices that posters have in front of him. The poster has two choices: one is to say "yes," and another is to say "no" to take the training. In my subsequent paragraphs, without mentioning the phrase "Merit/Demerit Analysis," I have advised the poster to conduct this analysis on his own.

Learning the operation of some capital equipment, whether it will give a boost to the poster's career or become an albatross around his neck, cannot be determined at this stage. Many newer technologies are emerging, and what is valid today could become redundant tomorrow. There could be attractive options as well. Will the poster lose those attractive options? We cannot assess that at this stage.

The owner of the poster is purchasing some capital equipment as a business investment. For the operation of this equipment, he is sending the poster for a two-week training, incurring Rs 20,000 as expenditure. However, I still believe that a service bond of three years is too long a period. Obviously, profit is the motive behind the investment in capital equipment. Will the business owner share some percentage of the profit from this investment?

Regarding the owner selecting a new employee under the condition of a service bond of three years after the training, it is a debatable point. The owner is aware of the risks associated with this option. After all, a known devil is better than an unknown angel, hence the owner's proposal to the poster!

Thanks,

Dinesh Divekar

Hello Dinesh Divekar,

My comments/suggestions have been based on my background in Instrumentation and also my life in the USA. So I wouldn't really count myself as an 'outsider' for this thread, having had some hands-on background in the field this member seems to be into and also adding my current role in Recruitment (many of our clients have similar—no less than 2 years for sure—Training Bonds). However, as you said, no two situations can be identical though there can be similarities.

But this member is mixing up the cost of the equipment on which he is to be trained with the cost of the training. The equipment can cost millions, but the training costs are related to the actual expenses plus the pay-back aspects. At the end of the day, it's the individual who needs to bite the bullet... after all, it's his/her career and life. We can only share experiences and/or suggestions. The walking needs to be by that individual.

Regards,
TS

Hi friends,

Thank you for the responses. My boss is the proprietor of the firm. We are basically marketing products of a US company. The US company is interested in investing in me and hence they are paying for all my expenses, not my proprietor. Yes, there is one more person in the sales team, but I am the only one looking after the products of the US company. So basically, I am the only one who can be trained in the sales team.

@Tajsateesh - I said 20k because we already booked the travel between states and all that, which sums up to 12k. Then I have added a buffer of 8k. You can say 25k then. The rest of the expenses will be covered by the company in the USA.

@Dinesh - I too agree that 3 years is too long. It is true the market is a galore for a talented person.

My boss, the proprietor, has asked to sign the bond for 3 years for a sum of 3 lakh. Frankly speaking, I do want to attend the training session as it would be informative for me, but I don't know something is holding me back. Maybe the three long years are. Does it make sense?

Hello AK,

Suggest DON'T get bogged down with the figures FOR NOW.

Look at the situation from multiple angles - else whatever you decide COULD be lopsided.

You mentioned the Training is to do with some Instruments/products... what are they?

More importantly, what's the scope of utility of this training in YOUR long-term career... meaning, would this be useful for you AFTER 3 years? If Yes, it's worth thinking forward. If No, then you better drop it right now & inform your boss that you aren't interested. The Downside IF you say No COULD be that you may not be able to stick to this job for long... better be prepared mentally for this scenario.

Please note that discussing about the Bond Period and/or the Amount is something that's NOT entirely in your hands. Why spend time discussing this over & over again when the chances of these factors being reduced COULD be bleak? At best, you can ask for a reduced timeline & Amount from your boss... BUT please be clear that this MAY also convey a message to your boss that you are not too keen on this & are already planning for the next job. So this step COULD be dicey too.

Years ago, I got a chance to be trained in a Power System related equipment in Germany for 3-4 months with German language training included with a bond of 5 years or (I think) 2 Lakhs [in those days].

I applied what I mentioned above - IF that training would be useful to me in the long-term or not. I realized that the equipment was custom-made by Siemens that didn't have many equivalents in those days... so in all probability, I would not only be stuck there after the Bond but also this period wouldn't be useful later on [in effect, non-productive from a long-term point of view]. I just let it go... and no regrets.

It's another matter that I got the US Training chance in DAS from Westinghouse within a couple of years or so after that... maybe I was lucky.

So, in a nutshell, there's nothing like 'right/wrong' in such situations. It depends on: (1) How the Present jells into your Long-term career goals (2) What's the downside IF you say Yes now OR No now (3) IF you asked for a lower Bond timeline and/or Amount, how would that be viewed by your boss.

All the Best.

Regards,

TS

Mr. AK,

Quick reply was dependent upon the most essential data, like your CTC, cost of the proposed training, duration of the training, additional cost of manning your vacant position by the company with a substitute. To arrive at the expected loss or gain in turnover by any fresher during the period of your absence on training, overheads that your company is likely to bear, in addition to all such costs, etc. But I find most of the data provided by you is quite irrelevant, and still, you want a quick reply, as if the members are astrologers to quickly know what data you have not mentioned. Is it not very strange on your part?

However, if your proprietor has asked you to sign the bond for 3 years for a sum of 3 lakh, the amount is too less. He seems to have not been able to count all these costs properly.

If something is holding you back, why not refuse to sign a bond? Ask your boss to send someone else in your place.