New economy increments for old economy sectors

AHMEDABAD: Employees in cement companies have a concrete reason to stay cemented to their employers. Faced with stiff competition and high attrition, leading companies such as Ultratech, Ambuja Cements, Mangalam Cements are building ties with their employees by giving big salary hikes. On an average, the hike in salaries has been around 25-35% with highest being around 47-50%.

The cement industry was struggling until three years back. As a results, hikes were minimal. Now, with good times coupled with high churning, the companies are now offering good hikes.

“The companies are expanding presence and capacities. And to add total of around 100 million tonnes, the companies need substantial manpower,” said Cement Manufacturers Association’s secretary general EN Murthy. With current installed capacities standing at 166 million tonnes with a 12% growth in demand against a 9% growth in the industry, it is only understandable.

Companies such as JK Cement and Sanghi Cement which are increasing capacities have given a hike of as high as 47-50%. “We want to make out employees part of the growth story. The average salary hike at our company has been around 38% compared to 32% last year,” said Sanghi Cement’s president (HR) Atul Pandya. The company has given hike across levels and departments including finance, marketing, operations and HR.

JK Cement is leaving no stone unturned to retain good talent. Said company’s CFO AK Sarogi: “We have given increments in the range of 15-50% to retain talent. With new capacities being added, the average rise has been around 25-30%.”

According to industry experts, the hike is mainly due to attrition. The attrition is now around 23-28% compared to around 10-12% two-three years back. BK Birla-promoted Mangalam Cement has given a hike of around 40-60% in last seven-eight months. “We had not given good increments in last three years.

So now we are compensating for that,” said Mangalam Cement’s president (operations and finance) RC Gupta. Recently, the company gave a hike of around 20% to its presidents, vice-presidents and above. The deputy managers and general managers and employees below this rung got hikes in the range of 10-15%. Moreover, all the employees in the organisation who have been promoted got an additional 5% hike.

According to sources, Ambuja Cement, Ultratech and Grasim have given around 35-38% hike to their employees. “We are assessing the performance of our employees. Many companies are trying to make up for the last three years. More than a hike, I would say that it is rationalisation.

Attrition level of 16-18% can be a cause of concern for the industry,” said Aditya Birla Group’s global head (corporate human resources and information technology) Santrupt Misra. He however, refused to divulge details of the hike. One should be careful while calculating the hikes as many a times companies include future payment and unfunded liabilities to salary packages making the hike look bigger, he added.

Also a lot of small companies are battling with around 35% attrition. As senior employees in these firms are joining leading corporates, the companies are forced to give hikes as high as 40%. “The mini cement plants across the country have offered an average hike of about 20%,” said an official of Gujarat Mini Cement Manufacturing Units Association. The cash inflows have improved for many cement companies in the last three years and Mehta group that is into debt restructuring has hired Hewett group to evaluate the performance of its employees, sources said.

With significant salary hikes, the employees of Jaypee Cement too are laughing their way to banks. “Fast expansion is increasing the attrition across companies. We too have given substantial hike across management levels,” said Jaypee cement’s DGM (admin and personnel), DM Bhatnagar.

The infrastructure sector is already witnessing a huge jump is manpower demand. Manpower consultants too are gearing up to address the need. “The demand for temporary as well as permanent staffers in infrastructure sector is mounting. At present, already have demand for 2,000 employees for next two months,” said Team Lease vice-president Deep Mukherjee.