• Investment World
• eWorld
• Catalyst
• Mentor
• Life
• Canvas
• Praxis
• Urban Pulse
• Brand Quest

Anjali Prayag

Bangalore , Oct. 16

NEARLY 90,000 jobs in 30 companies have been lost to technology, globalisation, disinvestment, mergers or acquisitions in the last 3-5 years, . This came to light in a Business Line study of the VRS experiment of the top 30 companies in the country. These companies have, together, spent close to Rs 4,000 crore as separation costs to their employees.

The VRS benefits have obviously come in the form of savings on wage bills and better bottomlines. For the individual, the settlement has been advantageous with the opportunity of landing another job or perhaps as an associate with the mother company. But when it comes to shedding flab, most old economy companies believed that while the figures were of a higher concern, the process of achieving it was equally important.

Take the instance of Cummins India Ltd. As a result of two separate VRS spread over two years, this Pune-based company has cut down its employee cost to around 10 per cent of its sales (industry is at 12 per cent) and is working towards bringing it down to about eight per cent, which is a more manageable figure. When the company bid farewell to 304 of its employees who opted for VRS, it ensured that there were no hard feelings on either side.

According to its Joint Managing Director, Mr Vinod Dasari, the company retained engineering and drafting experts and even one shop floor employee — an expert in quality control — for six months to consult and train the existing staff.

"It went on fabulously because it is extra money for the employee who has left but is still attached to the organisation and great for us because he has a skill that we need," he said.

Among the 1,050 people that exited Maruti Udyog through a VRS implemented two years back, several of them have kept their relationships alive with the company by starting Maruti service stations or taking up jobs at the company's dealerships.

While some companies have forged business relationships with their former employees, others have gotten more personal: they mail the company's newsletter to `retired employees.'

Like in the case of Ashok Leyland . The VRS process itself was taken up in a scientific manner: An individual data sheet capturing all the benefits was given to every interested employee. This helped the employees discuss the issue with their family and thus make an informed decision. Mr Thomas Abraham, General Manager, Corporate Communications, Ashok Leyland, said, "Steps were taken to make the process as painless as possible. The company went beyond the mandatory requirements and continued to offer medical and insurance benefits for optees till they turn 58."

Consider this: Temporary employees of Bajaj Auto recently found justice in a Supreme Court judgment. The 700 workers, who have been on the company's rolls, approached the court for relief and 400 of these will be absorbed into the company as permanent workers soon.

The remaining 300 workers, though not reinstated, will be compensated by the company, the cost of which is expected to be about Rs 3 crore.

Co-existing in the same economy are the new age companies that have acquired and shed flab with ease and fielded no questions from any quarters.

That's India Inc for you.

Article E-Mail :: Comment :: Syndication

Stories in this Section
Reliance to buy FLAG Telecom for $207 m

Copyright © 2003, The Hindu Business Line. Republication or redissemination of the contents of this screen are expressly prohibited without the written consent of The Hindu Business Line