Even as state-run firms struggle to compete with their private peers, as many as 136 board-level posts are lying vacant in central public sector enterprises (CPSEs), available data shows. Nearly 20 of these firms meanwhile have unfilled leadership positions, with major navratnas like PowerGrid Corporation and NBCC (India) headless at the moment, according to the Public Enterprises Selection Board (PESB), which oversees PSU hiring. Other positions lying vacant include top-level posts like directors in fields such as finance, personnel, marketing, human resources and operations.
The slow pace of hiring comes even as state-owned firms have been hit hard by rising attrition levels, with employees steadily drawn to the private sector by better salaries. Officials also say that unwanted delays in obtaining vigilance clearance from competent authorities, and long-drawn procedures are some of the other reasons state-run firms have been struggling to find talent.
“CPSEs are stagnating and their revenues are not growing while their wage bills are – which makes them unviable. These firms have also reduced their hiring intake and staff strength at an overall level,” said Rituparna Chakraborty, co-founder and executive vice-president of IT staffing firm TeamLease Services. The total number of employees in CPSEs has been declining steadily since FY07 (except during FY12). However, per capita staff costs have been on the rise, going up by 50 per cent from `8.3 lakh per annum in FY13 to `12.4 lakh in FY17. To make mattters worse, across-the-board wage hikes for non-officer staff are likely to be implemented through FY19.
Chakraborty also said that the current state of affairs indicate that CPSEs have not progressed as much as their private sector peers in the human resources field. “Their approach, processes and thinking are not relevant in the present day context and that is one reason why CPSEs are not able to attract the right kind of talent. Therefore, most CPSE’s have lost their sheen and competitiveness,” she noted. These companies also need to focus on developing younger talent with a focus on women which would help them to manage diversity and innovation.
Given that the appointment of board-level executives is a time-consuming process and takes at least a year, the PESB guidelines stated that such positions are to be advertised for a year in advance of the expected vacancy. However, even these rules have been allowed to lapse, with many posts which are set to fall vacant from the beginning of next year opened up for applications only now. For instance, the chairman and managing director post in big companies such as GAIL and CIL is set to expire on January 1, 2020, but applications for these posts have been opened only in May. On the other hand, vacancies in relatively small companies like Rajasthan Drugs & Pharmaceuticals Limited and ITI Limited have been unfilled since 2017.
To accelerate the vacancy filling process, it is learnt that the government has recently provided flexibility to ministries and departments in the selection of functional directors of companies under their administrative control without seeking approval of Public Enterprises Selection Board in a bid to give them more autonomy in hiring. Sources said the ministries have also been exempted from seeking a nod from the nodal Department of Public Enterprises (DPE) before filling vacancies in posts like managing director or other directors on the boards of companies under their administrative control. Yet, the situation on ground remains dismal.
The Narendra Modi government has placed special emphasis on manufacturing, where India lags behind Asian economies like China, to boost economic growth and has set an ambitious target of increasing the contribution of manufacturing output to 25 per cent of the gross domestic product by 2025. The government needs to first get its team in order, experts say, if it is to achieve this goal.