Mumbai: Some 70% of employees at India’s largest private business conglomerate, the Reliance group, will get a hefty pay raise this month, with salaries going up as much as 57% in some cases.
A formal announcement is expected today, the birthday of the group’s founder chairman, Dhirubhai H. Ambani, who died in 2002. His older son Mukesh Ambani runs the conglomerate, whose flagship is Reliance Industries Ltd (RIL).
While coinciding with the birthday, the hikes, ranging from 22-55%, are primarily aimed at slowing attrition, especially among employees in engineering, manufacturing and marketing.
The increments, ranging between Rs60,000 and Rs4 lakh, depending on the job, will be effective from October.
Cause for cheer: RIL’s Jamnagar refinery. The Reliance group is India’s largest private sector enterprise. The conglomerate wants to slow attrition among employees in engineering, manufacturing and marketing.
Reliance group is India’s largest private sector enterprise with some 40,000 employees.
“This is the part of review of salary that is happening every year,” said an RIL executive who didn’t want to be named.
A senior RIL executive, who said he reviewed an internal circular on the wage hikes, said: “An employee, who is in this increment list, leaving before October 2008 will have to pay (back) the same with 12% interest to the company.”
Mint could not independently confirm the details of that circular.
According to a study conducted by the Confederation of Indian Industry, India will require about 16-20 million employees in the organized sector over the next 10 years to sustain the current growth rates.
RIL’s rival and state-run oil company, Oil and Natural Gas Corp. Ltd, which has been struggling to compete for employees with the private sector, has also submitted a proposal to hike salaries to check attrition.
“The proposal is before the government. The company will lose more talent to private and international oil companies if the government fails to bring the salary levels to the industry standards,” an ONGC official said, requesting anonymity.
RIL is also India’s largest private sector company based on sales, profit and net worth.
The company had recently implemented an employee stock options scheme, which gives the option to eligible employees to purchase the company’s shares.
The options, upon vesting and exercise, could lead to issue of 2,87,28,000 shares, representing about 2% of its equity capital.
The scheme was made available to some 14,000 employees, which makes it one of the largest such programmes among Indian companies.
RIL’s employee costs increased by 22% from Rs978 crore to Rs1,197 crore but the firm’s employee costs, as a percentage of revenue, is only at 1%, according to a company statement in April.