Hi Friends,

Even as I launch this today ( my 80th Birthday ), I realize that there is yet so much to say and do. There is just no time to look back, no time to wonder,"Will anyone read these pages?"

With regards,
Hemen Parekh
27 June 2013

Now as I approach my 90th birthday ( 27 June 2023 ) , I invite you to visit my Digital Avatar ( www.hemenparekh.ai ) – and continue chatting with me , even when I am no more here physically

Friday, 3 July 2020

35 years later : Overstaffing continues to haunt




Context :



Extract :

Ø  The Railways on Friday said certain job profiles of its employees might change in the coming days but asserted that there will be no job losses

 

Ø   In an online briefing, Director General (HR) Railway Board, Anand S Khati said the Railways will be " rightsizing and not downsizing ".

Ø  He said the order (sent on Thursday) was to surrender non-functional, non-safety vacant posts………..

Ø  The Railways currently has 12,18,335 employees and spends 65 per cent of its income on payment of salaries and pension.


Ø  Since 2018, the Railways has notified 72,274 vacancies in safety category and 68,366 in non safety category, taking the total number of vacancies notified to 1,40,640.

Ø  The letter to the general managers, approved by the Financial Commissioner, Railways said the freezing of new posts, review of posts created in last two years and surrendering of 50 per cent of existing vacancies was part of "an action plan for economic measure and rationalisation of expenditure."

Ø  The financial commissioner had also proposed a slew of austerity measures

    #   freeze in the creation of new posts,

    #   rationalisation of manpower at workshops,

    #   shifting outsourced work to CSR,

   #   moving ceremonial functions to digital platforms and

  #   cutting down on use of stationary by 50 per cent.

Ø  In the letter, the financial commissioner had also advised the zones to control expenditure by reducing staff cost, rationalising staff and also by making them perform multiple tasks.

=====================================================


The problem of overstaffing in Public Sector Units, is nothing new. It has been there all along.


What is new ( for Public Sector and Private Sector as well ) is :

As a result of Covid lockdown, demands ( for goods as well as services ) have plummeted


Profits have disappeared . Losses and “ Bank Loan Defaults “, are mounting. Banks are unwilling to lend further. Fixed costs of operations, remain the same



So , what is the “ Quick Fix ?

Ø  Bring down “ Variable Costs of Manpower “ by ,

#   Early retirement / Voluntary retirement

#   Recruitment Freeze / Not filling approved vacancies

#   More outsourcing

#   More mechanization / automation / digitization ( of office processes )

#   More use of “ Temps “ and “ Contract Workers “

#   From Union Agreements, getting rid of rigid “ Job Descriptions “


#   General Economy Drive



Will not all these steps increase UNEMPLOYMENT ?

Ø  In short term YES, but in long term, by being more productive / competitive, these companies will corner a larger share of the market and hire more people



Have these steps helped Companies in the past to revive ?

Most certainly . Very emphatically .


For specific / real life examples ( of the success of these steps ), read my following letters ( yes, cyclostyled / individual paper letters to each of 7,500 + employees of L&T Powai Works, sent out 35 years ago ) :



RESURRECTION AT GENERAL MOTORS  …………………..[19 Nov 1986 ]

PRODUCEPRODUCTIVITY OR PERISH …………………………………….[ 06  Dec  1985 ]

NOTALONE ……………………………………………………………………[ 20 Aug 1986 ]

ECONOMY(CO-OPERATION) DRIVE  ………………………….[ 21 July 1986 ]

These days, TV / News papers carry daily reports of big companies retrenching employees in order to survive . From my following letter, you will notice that it was no different  35 years ago

[  PRODUCTIVITYAND UNEMPLOYMENT / 12 Feb 1986 ]

Extract :

To  give you an  example, please  see the  chart below  showing   number  of  employees  shed   by  8  reputed companies.


Name of Company
Employees shed or proposed to be shed (Nos.)
1.
AT&T’Information System Division
24,000
2.
Ford Motor Co.
10,000
3.
Union Carbide Corpn.
4,000
4.
C B S
2,000
5.
Motorola Semi-Convertor Group
9,200
6.
11,200
7.
Kodak
9% of its workforce
8.
21,000
( Source :  Fortune (International) Magazine / October 28, 1985 )

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It will take a lot of courage for  Governments ( Central + States ) / Political Parties and Industry Associations , to tell this bitter truth to the public - that there will be less jobs and the only answer is Self Employment

With regards,

Hemen Parekh

hcp@RecruitGuru.com  /  04 July 2020  



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