New Delhi: At a time when state-owned firms are struggling to compete with their private sector rivals, 60 full-time, board-level positions and 250 independent director posts are lying unfilled at central public sector units (PSUs).
Of the full-time positions, 20 are for chief executives, while the rest are for posts of directors in fields such as finance, marketing, human resources and operations. Some of the key positions include those of chairman and managing director (CMD) of companies such as Coal India Ltd, Oil and Natural Gas Corp. Ltd (ONGC) and Rural Electrification Corp. Ltd.
“We are trying to fill up the positions. It takes time,” said a top government official, requesting anonymity.
The consolidated list of vacancies of senior executives as on 31 July was disclosed by the department of public enterprises, which comes under the ministry of heavy industries and public enterprises, in response to a parliamentary question last month. The data on the independent directors was provided by the head of the apex body of state-owned firms, Standing Conference of Public Enterprises (SCOPE).
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Most of the firms with key vacancies, including Air India Ltd, Bharat Sanchar Nigam Ltd, RITES Ltd, Hindustan Shipyard Ltd, Hindustan Aeronautics Ltd, MMTC Ltd, SJVN Ltd, NHPC Ltd and India Tourism Development Corp. Ltd, are finding it increasingly difficult to operate in a competitive environment.
While the Public Enterprises Selection Board (PESB), which oversees hiring for state-owned firms, has made its recommendations for 32 of the above posts, they are yet to be approved. The slow pace of hiring comes as state-owned firms have been hit hard by rising attrition levels, with employees being drawn to the private sector by better salaries. Indian PSUs employ around 400,000 executives.
“This is coming as a serious obstacle in way of optimal performance of public sector units,” said U.D. Choubey, director general of SCOPE. “The main reasons behind such a state are the long-drawn existing procedures and the unwanted delay in awarding vigilance clearances.
SCOPE’s proposal to reform the process is pending with the department of public enterprises, he said.
“Supply of quality talent, especially at the (level of) chairman and one level below, has diminished. Internally, there isn’t a pool of talent available to grow into these positions,” said Gaurav Lahiri, managing director of Hay Group India, which is conducting research on the issue of succession planning at PSUs, in association with SCOPE. “This was not the case seven to 10 years back. Up till the early 2000s, there was a solid level of talent at public sector (units) at the middle level, who were groomed to take on senior roles.”
Interestingly, hydrocarbon explorer ONGC’s follow-on public offer to dilute 5% of the government’s stake in the company will open on 20 September with a temporary CMD at the helm.
While “both private and public sector companies are finding it hard to hire suitable talent at senior levels, public sector companies find it tougher because they are more rule-bound with respect to the experience, age and qualification desired”, said E. Balaji, managing director and chief executive officer at recruitment firm Ma Foi Randstad. “Senior-level executives at their end take on new roles based on their perception of what the role has to offer in terms of autonomy and compensation, both of which are seen as wanting in public sector positions.”
The appointment of board-level executives is a time-consuming process and takes at least a year to be completed.
The selection process for board-level posts at state-owned firms has been revised after PESB issued guidelines in May. These state that such positions will be advertised a year in advance of the expected vacancy. The PESB recommendations will be sent to the administrative ministry before the term of the incumbent ends. The guidelines also state that in case of unanticipated vacancies, PESB will send its recommendations within four months of a position becoming vacant.
Pdf by Uttam Sharma/Mint
Malvika Chandan contributed to this story.