Monday, December 28, 2015

SAIL to launch Rs 400-crore VRS; will other PSUs follow suit?

REELING under net loss in 13 years in the current fiscal, Maharatna PSU Steel Authority of India (SAIL) will soon launch a nearly Rs 400-crore voluntary retirement scheme (VRS) after a gap of nearly 10 years. This aims at reducing its workforce by 1,500 from the current 91,000.
It will be interesting to see if other big PSUs follow suit as many PSUs are found to be overstaffed.
Media reports quoting SAIL sources said the PSU’s board is likely to give its approval to the VRS plan in its next sitting. The VRS would be rolled out immediately after the board’s approval across its five integrated steel plants and...
non-plant set-ups, targeting both executive and non-executives.
SAIL had been overburdened with excess manpower. It had a staff strength of 1.47 lakh in 2001. As earlier, there still exists considerable excess manpower in the non-plant departments, which constitute around 20 per cent of the company’s workforce. Natural attrition reduces employees by around 4,000-5,000 every year.
“The proposed VRS would be launched with the idea of pruning both executive and non-executive redundancies. Though the company is fine-tuning the age-limit and the entire package, the scheme is likely to be offered to workers who are in the 46-50 years age bracket. SAIL is likely to keep both the deferred payment option as well as one-time payment option open for employees who would be opting for VRS,” the report added.
This move is seen as an attempt to give young employees a chance to pursue a career of their choice and at the same time, an opportunity to leave the company to those who want to spend their days with near and dear ones.
However, there would not be any freeze on fresh recruitment by the company. SAIL would continue to induct young people to correct the skewed skill-gap.
Labour productivity in SAIL is the lowest even among its Indian steel peers. Its cumulative labour productivity for the April-August period of the current fiscal stood at 314 tonne of crude steel (TCS)/man/year compared with the international benchmark of 500-100 TCS/man/year.
VRS had also been launched earlier in the Maharatna PSU. It had launched a VRS in mid-1998 and then introduced a “sabbatical leave” scheme in 1999, under which employees could take a break from the company for two years for studies/employment elsewhere. Between late 1999 and early 2001, SAIL had launched another VRS for its employees. The last one was launched in 2006 but since then, no VRS was launched.
The current situation of the domestic steel industry, which is plagued by higher imports, lower prices and poor demand within, also made a good reason for SAIL to cut down its employee cost, which currently constitutes around 21 per cent of the gross sales compared to 16.69 per cent in 1999-2000. SAIL has already posted Rs 1,057-crore net loss in the first quarter.
The capacity expansion that would take SAIL’s annual steel making capacity to 23.1 MT is currently underway in all of them, and expected to be completed by the end of current fiscal.

No comments:

Post a Comment