Manpower issues: Staff rationalisation to continue in FY19, says SAIL

State-owned Steel Authority of India (SAIL) still lags private sector peers on employee cost, despite trimming the size of its workforce for eight years.

Its employee total was 76,800 as on April 1, from 118,000 in the year 2010 – 16 per cent of total cost, from the earlier 21 per cent. Around 5,000 retire annually and hiring has been about 500 a year. “The company is constantly working towards bringing efficiency by reducing the employee cost,” according to SAIL spokesperson.

The employee cost of Tata Steel is around 14 per cent of the total, with a workforce of 74,000 as of end-March 2017, and crude steel production capacity of 13 million tonnes (mt) anually across India operations. JSW Steel’s employee cost is less than three per cent of the total, with employee strength of 11,619 and installed capacity of 18 mt annually.

These three companies contribute the most to India’s crude steel output, up six per cent to 26 mt in the first quarter of the ongoing financial year (2018-19). The country produced 24.5 mt during April-June a year before.

According to the World Steel Organization, India had outstripped Japan to become the second largest global producer, after its production grew 3.4 per cent to 8.43 mt this February. 

The government’s target is 300 mt of annual output by 2030, with additional investment of Rs 10 trillion.

In 2017-18, SAIL reduced its personnel cost by Rs 3.72 billion. Compensation paid towards voluntary retirement was Rs 2.54 bn. “Nearly 4,000 people retire every year and we give voluntary retirement to about 1,000 annually. A similar number can be expected this financial year,” P K Singh, outgoing chairman and managing director of SAIL, had told this publication while retiring.

It had also shut four blast furnaces under a turnaround plan for better efficiency and a similar exercise would be done this financial year. These measures  helped it report a standalone net profit of Rs 8.15 billion for the quarter ended March, mainly on account of a rise in revenues.