Acute Shortage Of Manpower In Public Sector Banks

Public sector banks face acute manpower crisis-LiveMint

It’s a good time for public banks to relook their human resource strategy to address current and looming challenges

Sunil B.S.

The government has relaxed promotion norms to fill up vacancies in public sector banks, according to newspaper reports. With nearly 20% of the staff at these banks expected to retire by 2015, it’s a move that comes not a day too soon. So severe is this issue that it prompted the Reserve Bank of India to call the 10 years to 2020 as the decade of retirement.

In its 2010 report, the Khandewal Committee set up by the government to look into human resources issues in India’s banking industry outlined that over the following 2.5 years the percentage of staff reaching superannuation would reach alarming levels—80% at the general manager level, 65% at the deputy general manager level and 58% at the assistant general manager rank. This reflects a lack of human resource planning at these banks.

The reasons why state-run banks are staring at such a crisis range from the lenders going on a recruitment overdrive after the nationalization of banks in the 1970s and 80s, followed by a lull in the 1990s, to the launch of a voluntary retirement scheme after the introduction of computers. This resulted in a dramatic reduction in the number of employees, particularly at senior levels.

While public sector banks have faced flak in the past for their inability to check deterioration in the asset quality in their books, the fact that these banks haven’t been able to formulate a sound long-term human resource strategy remains under-appreciated. This is already proving costly. Consider this, despite the reduction in staff headcount, their per employee expenses have gone above that of private banks in recent years. Currently, it is more than 150% higher than that of private banks, RBI data show.

With RBI all set to allow new banks in the country, competition in this sector is going to intensify further. These new banks will definitely poach on talent from the public sector banks, worsening the situation. Considering the salary differential, employees of state-run banks may find it more lucrative to work for these emerging private banks. Public sector banks will need to find innovative ways to retain people.

The latest move by the government of relaxing promotional norms only offers a short-term solution. As part of the service industry, human resource is a vital function for the banking industry. The quality of service offered plays a major role in banks winning and retaining customers. It’s a good time for public banks to relook their human resource strategy to address the current and looming challenges.

http://www.livemint.com/Opinion/Nxk9U4pulRiYXzJ385tZEJ/Public-sector-banks-face-acute-manpower-crisis.html

Saturday, November 30, 2013

Headless PSUs: How long they should remain so?

Can PSUs deliver sans boss?

NMDC, NHPC, MMTC and HMT are some of the PSUs that share a common element. All these and many others are functioning for quite some time without any regular heads. The question is how long should a PSU function without a regular boss? And there is no doubt the absence of the boss at the helm...

does have a bearing on the functioning of the PSU. Some crucial decisions couldn't be taken quickly in the absence of a regular chief. This is also because the acting chiefs are often devoid of powers to take key decisions. 

In most of these cases, the delay is either due to Public Enterprises Selection Board (PESB) acting late on appointment or late receipt of vigilance clearance. It may also due to the parent ministry not favouring the PESB's choice. In such cases, the selected panel has to be scrapped and a new advertisement has to be notified. When PESB recommends a name, his candidature remains valid for one year and if such a person is not appointed within that period the entire process has to be started all over again.

Sometimes, a joint secretary is often appointed as temporary chief of a PSU, like in the case of HMT. But the appointment of a joint secretary is often seen a convenient step for the administrative machinery as he has to report to his senior boss who is the secretary in the concerned ministry. Therefore, the secretary can influence the functioning of the particular PSU in a direct manner.

At least a dozen public sector undertakings have been headless for a span ranging from three months to three years. NHPC’s top post has been vacant since January 1, 2011. NMDC has been functioning for nearly two years without a full-time chairman. NMDC, country's largest iron ore miner, is without a full-time chairman since the retirement of its earlier regular head Rana Som on December 31, 2011. Steel Authority of India Ltd (SAIL) chairman CS Verma is officiating as NMDC head. PESB had selected a candidate, but the steel ministry rejected the choice. Later, an appointed panel, headed by Planning Commission Member Arun Maira, recommended names of Narendra Kothari, CEO of SAIL Burnpur plant and TK Lahiry, CMD of Bharat Coking Coal Ltd in May. 

Metals and Minerals Trading Corporation of India (MMTC), a central public sector enterprise, is worth Rs 66,000 crore and is one of the highest earners of foreign exchange, but the organization has been without a regular CMD since October 2010. In October 2012, an additional secretary in the commerce ministry, DS Dhesi, took over as the CMD in addition to his present assignment as the director-general of the trading giant.

HMT Ltd hasn’t had a regular CMD for two years and after the suspension of SG Sridhar in August this year, Harbhajan Singh, a joint secretary in the ministry of heavy industries, is the acting CMD of the PSU major. 

In the past too, other major PSUs like BHEL, NALCO, Coal India and ONGC functioned without a chairman for months on end often leading to delays in critical decisions.