While PSUs offer comparatively lower salary than private players, they offer job security, work-life balance and hoards of other benefits. Is that why employees stay put with a PSU or is it the comfort that makes them linger on? HRKatha reviews the war of talent between PSUs and private companies.
Compare this: In the last fiscal, SBI chief, Arundhati Bhattacharya took home Rs 28.96 lakh and her counterpart at a private bank, ICICI CEO, Chanda Kochhar received a basic salary of Rs 2.66 crore. Unfortunately, this disparity is not just restricted to the top, it percolates down the levels.
With such high discrepancy in salaries, how do PSUs compete with their private counterparts in attracting talent? Does this imply that PSUs get inferior talent in comparison to the private players? Not so! PSUs also acquire quality talent.
Many would argue that PSUs owe their sick status to the quality of talent they have. However, there are several examples, where PSUs have not just managed to stay in business, but have also taken leadership positions in their respective categories.
So what brings talent to the PSUs, and how do they manage them?
Yuvaraj Srivastava, group CHRO, MakeMyTrip, says, “This had been one of the enigmas I always tried to find an answer to, but was unable to comprehend why the public-sector organisations have relatively higher retention rate despite a not so competitive compensation and career path as compared to private-sector professionals?”
“PSUs always offered a stable career and relatively better work–life balance as compared to hyper competitive private-sector organisations. All this came at the cost of being content with compensation, which could be few notches lower than those offered by private-sector players.”
Yuvaraj Srivastava
“The answer lies in the fact that PSUs always offered a stable career and relatively better work–life balance as compared to hyper competitive private-sector organisations. All this came at the cost of being content with compensation, which could be few notches lower than those offered by private-sector players,” Srivastava answers his own question.
Nitin Sansare, head-compensation and benefits, Tata Motors concurs, “Before looking at the talent scenario, it’s important to consider the way salaries exist in the two sectors.”
“While on one hand, private-sector organisations offer attractive salaries with fixed and variable components, PSUs offer various other lucrative benefits and entitlements that may not be directly monetary, such as pension, medical entitlements, and so on.”
As private players disrupt the bastions of PSUs in the field of energy, gas, heavy engineering and BFSI, the fear of losing talent to the private counterparts is always dangling on the head. Despite all, the PSUs have managed to retain talent to a large extent.
Anil Kumar Misra opines, “There’s no denying the fact that due to job security and social security offered by public-sector organisations, people find such jobs safer and more comfortable. That, in turn, is also one of the reasons behind the lack of accountability. Only those who find it difficult to come out of their comfort zones and prefer ease in the gradual growth, stay with the PSUs.”
Learning for employees is another area, where PSUs contribute generously.
“I have witnessed that in many of the well-positioned and expensive training programmes across institutions, most of the participation comes from the PSUs. This is perhaps because there is no dearth of resources. However, I believe these resources need to be channelised better and more effectively,” quips Srivastava.
In the recent past, there have been various instances of employees from the energy sector joining private players, such as the Tata Group or Reliance, and similarly, in the banking sector.
“PSUs lack a robust performance management system, meritocracy and strong reward and recognition mechanism. In the absence of strong performance management systems and well-defined KRAs, employees at PSUs do not feel the same performance pressure as workers in the private sector do. This certainly impacts the entire work environment.”
Anil Misra.
Misra says, “It’s true, the navratnas and maharatnas in the PSUs have also been facing the talent challenge, owing to a shift in talent expectations with more millennials entering the workforces.”
“PSUs lack a robust performance management system, meritocracy and strong reward and recognition mechanism. In the absence of strong performance management systems and well-defined KRAs, employees at PSUs do not feel the same performance pressure as workers in the private sector do. This certainly impacts the entire work environment, in terms of both performance and employee expectations. People who seek faster growth, on the other hand, will most likely make a move to the private sector,” opines Misra.
Srivastava strongly believes, “In order to actually retain and attract the best talent in the public-sector undertakings, the government will have to work on a multipronged approach. While on the one hand, the benefits and compensation structures need to be made flexible with performance-linked variables, on the other hand, strong processes for career growth, cross-organisational movement, and so on, should be introduced.”
“Last but not the least, it is also important for the PSUs to work around their workplace environment, including infrastructure and workplace relationships, to build a sense of camaraderie and pride, he adds.
“If I were to join a public-sector job 20 years ago, I would have certainly given it up for a private-sector job that could offer me a better salary and accelerated growth. However, with the improved pay scale, along with a host of other benefits, given a chance, I can today easily think of joining the public sector.”
Nitin Sansare
However, Sansare, has a different opinion on this. He feels the scenario is reversing and private-sector organisations are increasingly finding it difficult to attract people from PSUs now.
“With the 7th Pay Commission coming into play, the pay scales in the public-sector organisations have also significantly increased, thereby considerably reducing the disparity. To attract talent from the public-sector organisations, private-sector companies will now have to offer larger job challenges or higher designations with better exposure as the salaries alone may not be the attraction anymore,” Sansare says.
“If I were to join a public-sector job 20 years ago, I would have certainly given it up for a private-sector job that could offer me a better salary and accelerated growth. However, with the improved pay scale, along with a host of other benefits, given a chance, I can today easily think of joining the public sector,” he shares.
“Jobs in the private sector aren’t as secure as public-sector jobs. Besides, with the added benefits and matching salary, even the high-potential talent may now consider joining PSUs,” Sansare concludes.
2 Comments
It’s all trash small PSU’s Banks never try to retain its best quality talent. I have faced hell in the PSU bank.old generation Employees attitude is another hell. There’s no transfer policy.. Senior level employees always dominates Middle level employees. Senior Clerical staff never care and give at least 20%of their potential. Every employee wants to shift their responsibilities to others. Working in small Public sector bank is very very big nightmare. If you give 200%of your potential also they won’t recognise and pay package and other benefits /perks are worst. AGM, DGM rank employees of Public Sector banks will be drawing less than State Government sub staff of equal no of years service. People who are working in small Public sector Banks will always away from their home and family members due to frequent transfers. Unable to do justice to their own family members. Small Public sector bank employees are just deceiving themselves feeling that they are in Government service. However they are reluctant to accept the gate m pollthey are working for peanuts. They have to realise this and should break the shell.
PSUs source their talent mostly through competitive examinations at all India level. Therefore, the intake quality of employees is generally high. A strong policy framework, perceived sense of equity, the comfort and facilities of township – housing, schooling, medical and club etc., a non -competitive work atmosphere, a non- discriminatory reward archtecture and a pride that stems from the mission and scale of their operations are at the core of retention. PSUs also invest considerably for meeting training and post-war retirement needs of their employees.