New Delhi: Hindustan Aeronautics Ltd (HAL), which makes and maintains the bulk of the Indian Air Force’s fleet, is planning to raise the retirement age limit of its employees by two years, the second time in a decade, to shore up a workforce it is losing to competitors.
It currently has 30,000 full-time employees whose retirement age it is contemplating to raise to 62. This comes even as about 6,500 people—one-fifth of the company’s current workforce—is due to retire by December 2008.
The state-owned company has lost over 1,850 employees to higher-paying jobs in the private sector, between 2003 and 2006, according to a senior human resources official who did not wish to be named. Some of the junior and middle-management personnel have even left to be with HAL’s joint-venture partners.
The company last raised its retirement age from 58 to 60 years, under the erstwhile National Democratic Alliance government. The extension was monickered ‘Vajpayee Service’ by employees. Not even a plan to impose a Rs5 lakh penalty on junior and middle-level managers who leave before they serve five years at the firm, has stemmed the bleed.
Two recruitment drives in 2006, as against an annual one, netted only 400 employees out of 28,000. The selection is based on entrance tests, but at this rate, they risk falling short of the recruitment target.
“The company needs to hire 18,000 employees by April 2011, in order to keep up with its order book,” the official said. HAL currently has confirmed orders worth Rs28,000 crore. The problem is so gripping that company chairman Ashok Baweja has made a presentation to defence ministry officials, sources said.
“I don’t think raising the retirement age by two years will make much of a difference,” said C.G. Krishnadasan Nair, former HAL chairman, who is now the president of the Society of Indian Aerospace Technologies and Industries.
“We are very concerned with the number of employees leaving for higher paying private-sector jobs. This year, the number is going to be a lot higher,” a human resources official with HAL told Mint.
Much of the attrition has been among computer-aided-design professionals and operators of the Computer Numerical Code machines, which are used to fabricate parts, the official said. But the number could get much higher when multinationals like Airbus Industrie and Boeing set up maintenance, repair and overhaul facilities in India. Airbus Industrie has already announced plans to hire some 2000 people in India.
Blue-collar workers take home roughly Rs10,000 at HAL apart from benefits such as subsidized housing and medical care, while a fresh graduate with an engineering degree would make roughly twice.
Still, that pales in comparison with the Rs30,000 a month, that a graduate with similar skills at a top information-technology company would make. The company has attracted more attrition because of its traditional role as a good trainer of skilled workers and the problem has been exacerbated by the entry of foreign aircraft makers such as Airbus and rival Boeing Co.