New Delhi: Bharat Heavy Electricals Ltd (Bhel), India’s largest power generation equipment manufacturer, is getting top business schools (B-schools) such as Harvard and Wharton to create customized courses for top management personnel as the state-owned company tries to upgrade skills and retain staff.
The company will soon be sending its first batch of 25 general managers to Wharton, said B.P. Rao, chairman and managing director.
Bhel wants to help its managers gain expertise as it scales up, besides using the training as an incentive for them to stay with the company. Many of them are being poached by foreign companies setting up up power equipment manufacturing units in the country.
“We are preparing the organization for the future,” said Rao. “Our focus is on people, process and technologies.”
While Bhel has been facing competition from Chinese power generation equipment manufacturers such as Sepco Plc, Shanghai Electric Group Co. Ltd, Dongfang Electric Corp. and Harbin Power Equipment Co. Ltd, both in the domestic and overseas markets, it also faces challenges from local joint ventures between Larsen and Toubro Ltd and Mitsubishi Heavy Industries Ltd; Toshiba Corp. of Japan and JSW Group; Ansaldo Caldaie SpA of Italy and Gammon India Ltd; Alstom SA of France and Bharat Forge Ltd; BGR Energy Systems Ltd and Hitachi Power Europe GmbH; and Thermax Ltd and Babcock and Wilcox Co.
Bhel fears that attrition levels are likely to increase once the private facilities become operational, especially since public sector units (PSUs) are governed by standardized pay structures and hence salaries are not as attractive as those offered by the private sector.
The Union government recently implemented the Sixth Pay Commission’s recommendations, which hiked the salaries of five million government employees by 21% on an average.
Some state-run firms, including Bhel, incorporated a performance-related pay package in the salary structure, said a senior Bhel executive, who did not want to be identified. “The attrition rate in our company is very low. In executive cadre, it is less than 4%,” he added.
Bhel has around 200 general managers and 30 executive directors in its 47,000 workforce, of which around 9,000 are executives.
“We are sending our top general managers who have got a few years of service left,” Rao said. “Right now we will be sending people to Wharton, and are talking to Harvard and Warwick for a similar programme.”
Bhel has ambitious plans to increase production, for which retaining and attracting new talent would be critical.
The company posted a net profit of Rs 6,011 crore on revenue of Rs 43,337 crore in the fiscal ended 31 March. Bhel has an order book position of at least Rs 1.64 trillion and an annual capacity of 15,000 megawatts (MW). It aims to become a $10 billion (Rs 45,000 crore)-plus firm by 2012.
“PSUs that today are not able to attract the same calibre (of staff) that they did in the 80s from the top B-schools, for instance, are using enhanced job content as a tool to retain their mid-level executives,” said Arvind Pandit, director at Hay Group.
The country expects to add an additional 62,000MW by 2012. Of this, orders for a capacity of 42,431.58MW have been placed with Bhel.