I am a fresher who successfully passed two rounds of interviews for a company in India and have to first work as a trainee for which I will be paid stipend, and after few months I will receive the full pay but the company is saying that they will only give me an offer letter after few days of joining.
They basically said that I have to join first and then I will get offer letter within a week. What can be their reasons?
Even if it isn't a scam. Even if it isn't against the law (which we don't know because the country isn't mentioned). There are still reasons why they would do this. They aren't good reasons, but they are reasons.
They expect that people will accept a less desirable pay rate after they have worked there a few days, once they have already invested time in the new job.
They hope that you will drop all your other job searches and thus not be able to turn down their offer even if it is terrible. We have questions about companies that demand you cancel all your other searches before they will show you the offer letter.
If you show up for the first week, they can dangle the promise of a better deal in a few months, and you will keep working even if they constantly move the goal posts.
They only need you for x weeks, and they hope you will stay that long before you quit.
What can be their reasons?
Whatever that is/are (P.S - nicely explained in the other answer by mhoran_psprep), you have a very solid reason to decline this and continue with the job search - this is not normal, if not a scam altogether.
They can have a thousand reasons / justifications, but you don't have to listen / comply to any of them. An employment is a two way street, if one party is not going to be happy by the agreement, the relationship is not going to last long anyways.
If they cared about their employees, they would ensure that the employee is satisfied with the contract before signing and joining, not to be tangled in the back and forth process after joining and risk ending up unsatisfied. No half-moderate organization would want that, as recruitment demands a ton or resource, time and effort, so to have someone onboarded just to risk letting them go in a short while because of below-par contract agreement terms is counter-productive, unless they gain something substantial out of that short employment (like free labor).
The vast majority of fresh college graduates in India are, to use the industry term, "unemployable".
Their academic courses with outdated syllabi have not prepared them to hit the ground running in their first job, and freshers will typically spend months to years learning on the job, initially in formal training periods and later as "junior resources". During this time they are not wholly productive (and sometimes not even billable to end clients).
Companies incur many hidden costs when taking on freshers, which is a temporary investment that they seek to offset with the low starting wages paid to freshers over the next few years.
("Fresher" is an Indian English word for a first-time employee, typically straight out of college.)
For this to succeed, organizations need the fresher to:
1) Actually join the company
After HR has spent time and money on the recruitment process, they want you to actually join. Offers are rolled out months in advance, and in some streams around 30% of freshers just don't show up on the first day of work. As you can imagine, this makes HR's job very tough.
Recruiting a replacement would take months, and arranging for an induction training programme works best with economies of scale when a large batch joins together.
So HR gives out extra offers, but sometimes this leads to the opposite problem - more candidates join than are needed.
The costs of recruitment can also be surprisingly high - for example, last year even in the downturn, an IIM (Indian Institute of Management) billed us around ₹1,50,000 as the fee to participate in Final Placements and issue an offer to one single fresher candidate. We would be out of pocket if they did not join, or left soon after.
2) Attend training seriously
Some freshers will lie about their immediate plans and take up jobs as an interim measure - while preparing for competitive exams, to while away the time until their planned wedding, until their foreign university starts, etc. They never intend to stick around in the role. Needless to say, they might not take the training process seriously. The company tries to get some leverage here, by asking to retain original degree certificates and marksheets, etc.
3) Stay with the company till the costs of training are recouped
It is a known fact that the highest wage increases in a fresher's career are obtained by switching jobs. 30% pay hikes are par for the course when switching jobs at a junior level; in the first ten years or so. From day zero, HR wants you to not leave their company before their costs are recovered. They may ask the fresher to sign a monetary "bond" to recover the training fees if you leave soon.
4) Resign in an orderly fashion, after serving the proper notice period
Employment contracts in India have notice periods of one to three months. Some freshers tend to "abscond", or quit without notice, by just not showing up for work. After a week or so the employer is left to assume they will not be joining back. This again creates planning and staffing difficulties, and so the company will threaten to withhold relieving and experience letters, or even "full & final settlement" a.k.a. the last two months' salary, unless the leaving formalities and niceties are observed.
Needless to say these common practices like retaining original marksheets, signing bonds, having lengthy notice periods and refusing to provide proof of employment, range from borderline abusive to outright illegal. Unfortunately, Freshers are a commodity for HR. The large number of fresh college graduates every year skews the employer-employee power equation in India, making such practices commonplace at the entry level.
With this context, let me answer the specific question about delaying offer letters:
Firstly, an offer letter is relatively binding, but only on one side. Rescinding a documented offer will create a PR disaster, if not a legal default for the company's side. Yet freshers routinely disregard the sanctity of an accepted offer. So if the offer letter has not been issued, plan changes are simpler.
Secondly, the moment HR gives a fresher an offer letter, the fresher will use it to shop around and get another higher-paying offer. In the eyes of HR, having an offer letter that the fresher can show to other companies itself reduces the probability that the fresher will show up on the joining date. No offer letter equals fewer no-shows.
Of course this is a terrible justification, and not a practice a reputable company should follow. Imagine if they tried to pull this off with someone who was already employed. What would the proposition be: "I want you to quit your current job and join us, but I won't put it on paper that I am giving you a job, so you just have to take this on faith. I can easily go back on my word, leaving you jobless."
Whether you wish to be associated with such an abusive company or not depends on your options and position in the job market.
I obviously have no great insight into their plans, but given the many reported problems with relieving letters, I am inclined to think that they are acting in bad faith and will use the fact that you have started working and the requirement to have a relieving letter lower your compensation. Something along the lines of if you don’t accept this lower offer, we’ll have to let you go, but we won’t be able to give you a relieving letter for X weeks.
Terms coming after work has started, is possible, but only in unusual circumstances and with a high degree of trust. Either you are 100% certain this is OK, or you should be 100% certain that it’s not.
Unless you are absolutely desperate for a job, I would recommend that you pass on this “opportunity”.
If they really intend to follow through on their promises, they shouldn't have any problem putting them in writing. They're lying.
Legitimate reasons? Questionable.
At first it sounds like they are saying "come for an internship; we will give you an offer if it goes well". Which is OK if you are happy taking an internship. (But don't count on the job offer coming).
But what concerns me is the "within a few days" Of joining. I can't think of a good reasons for that. Offer now or offer when they get to know you.
So I have to concur with others - they would seem to be asking you to commit without them doing the same.
So be careful.
That said, I very much tend to assume "cock-up" over "conspiracy" without good evidence to the contrary. It may well be that they are decent people but idiots.
Main question you should know answer for "Is this a normal practice in India for freshers" you mentioned that you are located in India
If yes, well, imho, its not fair practice, but what can you do.
If not - you need to decide if you want to go along with it to, potentially, get the job
Ask yourself "Do you have any prospects now" and "Do you have time / resources / willingness to spend few days with potential employer that may not be genuine.
And most importantly - "Are you able to just get up and walk away in case its all be revealed as a scam"
This should help you decide what to do next
They might do this for any number of reasons, not all of which are bad. Here are a couple:
It's a scam to get you to work for free and/or reneg on conditions they promised you. The idea is, you go to work, and then you do some work for them without any documents, and when you ask them for your paycheque, they say "what paycheque?" and there's nothing you can do to prove you actually deserve to be paid because no documents were signed. You also can't prove anything concerning how much you were promised to be paid, how many hours you were promised to work, and whatever other terms you had. Also, because you stopped job hunting (this is how the scam works) you lost any leverage you had with respect to declining any offer and finding another job, as you have to start job searching from scratch if you quit.
HR may just be behind. They want you to start on X date, but HR is behind in processing your paperwork so they want you to start without an offer letter. They will give you the offer letter when it's ready and they'll pay you properly for the time you've worked, but they just want to get you in ASAP because they're understaffed.
What you should do is, unless you have any other offers, you should accept their offer to join the company, because there is a chance the situation is the second one, and it's better to have a job than not. However, DO NOT STOP JOB SEARCHING. Just in case the offer letter continues to be "delayed", or if it comes back with unfavourable terms, if you can find an alternate job which will give you proper terms, you should jump ship immediately.
It seems the company has set a date or approximate date for when you should expect the offer letter ("in a few days"). So go with that. If you work there for a week or so without receiving your offer letter, then follow up and ask where the offer letter is, and continue following up every few days until you get it. When you should quit is, if you work until the first payday and there are issues with your salary, then you can be reasonably sure this is a scam and you should quit immediately and go back to full-time job searching. Since you never received your offer letter (in this hypothetical scenario), you have also not agreed to any legal terms, so things like "notice period" probably don't apply to you; I know in India the notice period can be pretty drastic, but just as they can scam you out of your salary by withholding an offer letter, you can also scam them back by not providing proper notice.
Bottom line: Unless you have a better offer, take this one and hope they're honest. If you get any inclination that you think they are not being honest, then feel free to leave. In any case, all the while don't stop actively job searching until you have that offer letter in hand and the terms are to your liking.
