Steel Authority of India (SAIL) has directed its Rourkela Steel Plant (RSP) to develop a five-year strategic workforce roadmap (SWR) for the period for 2025-26.
The initiative is part of SAIL’s efforts to become lean, and achieve more cost efficiency in the competitive steel sector.
The plan will see RSP attempting to cut the workforce strength and reduce it 5,000 to 6,000 employees. The plant currently employs 11,800 people, including around 9,350 non-executives, 1,700 executives, and 780 mine employees.About 12,000 people work on contract.
The need to downsize was felt because SAIL’s labour costs were high, while was way lower than others in the industry.
SAIL has about 53,575 regular employees and 61,000 contract workers company-wide, with a labour productivity rate of 604 tonnes of crude steel per employee, annually. This id way lower than the domestic industry average of 1,400 tonnes per employee per year.
SAIL has identified its manpower costs as a critical issue, accounting for over 11 per cent of total expenses, compared to just two per cent for industry competitors. The company aims to raise its production capacity to 35 million tonnes per annum (MTPA) by 2031-32, with a goal of improving labour productivity to 1,200 tonnes per employee per year.
To make this happen, SAIL has instructed RSP to adopt a workforce model that balances permanent and contractual employees. The plant is expected to cap its regular-to-contractual employee ratio at 1:1 and implement best practices, automation, and skill- development initiatives.
The plant’s workforce has been steadily declining over the years. In 1995, RSP had 29,000 non-executive employees. Sources indicate that SAIL may introduce another voluntary retirement scheme (VRS) to further reduce staff, following the last VRS offered in 2019.
