Friday, August 24, 2012

IT PROVED TO BE MORE PERFECT THAN THEY HAD ACCOUNTED FOR!

BHEL WAS ABLE TO PREMPTIVELY SEE AN EXCESS MANPOWER BURDEN AND RIGHTSIZE IT TO PERFECTION. IN FACT, IT PROVED TO BE MORE PERFECT THAN THEY HAD ACCOUNTED FOR!

However, BHEL had reasons to regret the VRS decision once the power sector in India saw a sudden resurgence post the framing of the Electricity Act of 2003. The act greatly facilitated the entry of the power sector and a ramp up in the scale and number of power projects. Soon, BHEL began to face the dilemma of plenty and from 2004 onwards, it had to take urgent steps to ramp up on its manpower. In FY 2009-10, the total orders for the power sector booked by the company were Rs.419.82 billion for equipment generating 16,489 MW on an aggregate basis. Compare that to Rs.126.72 billion for equipment generating 5313 MW in FY 2003-04. With the increases in orders have come intense problems with deliveries and manpower crunch. Delivery time had just about quadrupled to 48 months in 2008 as compared to 2005. Add to that the Chinese competition flooding the market with cheap equipment and faster delivery times. BHEL’s current Chairman B. Prasada Rao defended the company in the recent analyst meeting, “We have been competing very well with Chinese because the kind of the models we have introduced... and the kind of heat rates we are offering.” BHEL has been winning orders of Integrated Power Projects again during the year. But sustainability is inextricably linked to the manpower situation. BHEL is a unique company in its field in India. Around 4000 employees are being hired every year now. Entry level talent is still available, but there is a crunch at the lateral level owing to lack of experienced people in the field. The home page on BHEL’s web site prominently displays an advertisement inviting ex-employees of BHEL to rejoin. They also recruit ex-employees on a contract basis for projects while they continue to plan ahead for a more suitable mix of manpower at all levels.

Preemptive Action

B. Shankar
GM-HR, BHEL

B&E: What has your experience with implementing VRS been like at BHEL?
B.S: We have had the experience doing VRS at certain points of time. The first time we attempted in in the end of 1980s. Not many people opted for it. And the need then was not so much. Second time we did in late 90s and early 2000s. Three rounds of VRS were done. Around 1998, business situation took a very sharp downturn, so we felt the need to reduce the number of employees. So we did 3 rounds of VRS. At that time, we were very successful, some 15,000 people opted for it. From 2004 onwards, business took a sharp upturn, with the result that we were faced with a dire shortage of experienced people and had to take some urgent steps to ramp up the manpower. If you lose experienced manpower through such schemes, you may get into a jam soon after.

B&E: How can a company handle resistance to VRS schemes?
B.S: Communication alone about the features of the scheme will not influence the decisions in the public sector. Along with that if some steps are taken, like some private sector company went around making arrangements for alternative livelihood/vocation for people opting for VRS. If some such things are done, then people may opt for it... generally, in public sector only those close to retirement will be doing it. There are rumours of increase in retirement age now so it will be tougher at this time. However, Government of India also has a scheme for retraining and counselling for VRS optees.


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