Calcutta, June 29: Steel Authority of India Ltd has kicked off a brain-storming exercise at various levels to prepare an action plan for reduction of surplus manpower at its corporate headquarters in Delhi and at its plants, according to insiders of the government-owned steel major.The company spokesman admitted that talks are on at various levels based on the suggestions made by the US consultancy firm McKinsey & Co. He, however, declined to divulge further details.
McKinsey has suggested that SAIL should reduce its manpower from the existing 1,70,000 to 1,00,000 in a span of five years. However, the organisation seems to be largely unprepared for the same, it is believed.
"Proper understanding of the reduction process is still lacking. In an organisation like SAIL, this should have been opened out to the trade unions, if not to the media," a senior SAIL official told The Financial Express on condition of anonymity.
The major advantage in favour of SAIL is that around 45,000 persons arenormally scheduled to retire over the next five years. Hence, SAIL needs to reduce manpower by another 25,000.
Meanwhile, it has introduced a voluntary retirement scheme from June 1, 1999. Its target groups include
Those who are 58 years plus,
Those who are habitual absentees, regularly ill and those who have become surplus because of closing down of plants and mines;
and poor performers.An analysis of manpower cost as a percentage of the turnover for various units of SAIL shows that its raw materials division (RMD), central marketing organisation (CMO), Research & Development Centre at Ranchi and SAIL corporate office at Delhi (the last three has been clubbed together as "other units" in the chart) are the weak spots. The figure for RMD is 30 per cent and "other units" 36 per cent.
Within the plants, there is an abnormally excess manpower in the non-plant departments. Around 30 per cent of SAIL's manpower, including executives, are in the non-plant departments, merely adding tothe superfluous paperwork, the official said.
Hindustan Steel, SAIL's predecessor, was modelled on government secretariats, with thousands of "babus" and messengers adding to the glory of feudal-oriented departmental heads. SAIL has yet to make any visible effort to reduce manpower in this visibly surplus area.
"If you walk into any SAIL office anywhere, you will find people chatting, reading novels, knitting and so on. Thousands of them just do not have any work. This area has not even been considered as a focus area for the present VRS, possibly because all orders emanate from and through such superfluous offices and no one wants to think of himself as surplus," he said.
From a manpower of around 60,000 in these offices and non-plant departments like schools, township activities etc, SAIL can easily come down to less than 10,000, many in SAIL believe.
Reduction of white collar manpower requires change in the systems of office work and record keeping, and a very high degree of computerisation.Officers across the organisation need dozens of stenographers and assistants. Signing on note sheets is a status symbol in SAIL officers.
Systems have to be result oriented rather that person oriented and responsibilities must match rewards and recognition. There is a need to change the mind set of the management, before specific plans can be drawn out for reduction of office staff, they said.
From the beginning, SAIL faces political intervention and pressure. Many believe that SAIL needs to overcome them. "One does not have to call in McKinsey to decide that many of SAIL stockyards and branch offices are redundant.
Many of them do not have sufficient orders or work on hand to justify their continuance, and yet political pressures keep them going. It is time that the top management took a tough stand on such matters, the SAIL official said.
Copyright © 1999 Indian Express Newspapers (Bombay) Ltd.
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