The robots are coming, artificial intelligence is expanding and automation is here to stay, yet public sector firms (PSU) are struggling to incorporate more efficient new technologies even as they pare down employee costs by reducing headcount.
Traditionally, PSUs have been known for providing life-employment and, in that sense, a certain job-security to employees. However, with surplus manpower standing as one of the prime reasons why some PSUs have become unviable, their inability to realign manpower to be more technology focused is further imperiling their nearly 1.2 million strong workforce.
The post-liberalisation shift towards the private sector saw the number of central PSUs stagnate, with only a modest increase to 260 in 2012, before jumping to 331 in 2017, of which 74 were yet to commence operations. Employment in operational PSUs grew massively from 0.7 million in 1971-72 to 2.24 million in 1989-90 driven by nationalisation and political patronage.
But, since liberalisation, this number has halved to just 1.13 million in 2016-17. As many as 42,060 jobs were lost during the 2014-15 to 2016-17 period alone, a drop of 6.13 per cent, according to data from annual reports of seven maharatna and 15 navratna PSUs including ONGC, Coal India, IOC, BHEL, NTPC, SAIL, BPCL and GAIL.
While newer technologies like AI and automation can help improve productivity and performance, current IT infrastructure in most PSU firms are still monolithic and obsolete. “While PSUs take very little initiative in modernisation or investment in technology, the employees tend to overlook the effectiveness that AI brings in terms of automating --- right from the process of goal setting to performance appraisal and salary reviews --- because they are shackled by strong bureaucratic control,” points out Aditya Mishra, Director and CEO, CIEL HR Services.
Another reason why PSUs have mostly been laggards in keeping up with changing times is because of their inability to make necessary investment in talent and technology. For PSUs to be able to assure job security and to be competitive, experts say they have to move from the concept of life-time employment to performance driven employment.
Secondly, these companies need to focus on a decentralisation approach to unlock value, with companies finding and using the right executive talent from the market to lead these enterprises with a free hand to drive transformation.
“However..,” observes Rituparna Chakraborty, co-founder and executive vice-president at staffing firm TeamLease, “2019 will not see any major change. We will only see some of the profitable companies making investment in digital capabilities — but given these are labour intensive companies with strong unions, they are not expected to invest in AI, automation in any big way. Most investment in IT would be in supply chain, inventory management and streamlining internal processes.”