Overall Covid situation did indirectly impact hiring: ABB's Sanjeev Sharma

In a Q&A, the MD of the engineering giant says each of the 18 divisions of the company has carved out its plan for business expansion where it sees merit

Amid the ongoing pandemic where industries are recovering from the hit of the second Covid-19 wave and also gearing up for a likely third wave, ABB Ltd, is looking to continue leveraging growth pockets and calibrate businesses to the recovery of growth industries like data centres, renewables, electronics and pharmaceuticals.

In an emailed interview with Aditi Divekar, managing director Sanjeev Sharma, talks about impact of Covid-19 on the company’s hiring and attrition rate, staying bullish on core business sectors such as oil and gas, cement, steel and mining. Edited excerpts:

Your revenue has taken a hit sequentially. How has the second wave impacted your business?

The localised nature of lockdown ensured that at any given point in time, some of our shop floors were operational. However, we lost about three-and-a-half weeks of production. We made a good recovery in the month of June supported by our service revenues. The robotics business in particular showed good traction led by service and upgrades. While in process automation, the focus was on conversion of backlog in the solutions segment. There were certain delays in manufacturing clearances due to Covid-19, however, as markets opened and vaccinated people could travel to customer sites, service business picked up. For electrification revenue was almost flat, while in the motion (segment of the business), though impacted, it had good traction in low voltage motors and drives.

Has there been any change in working/hiring policy at your end since March 2020?

In terms of work policy, the ever-evolving situation demanded that we empower employees to work effectively from wherever they are. We did come up with a framework that most employees could use effectively to manage work from outside the office. These new ways of working allow for flexible/hybrid working and cover options like work from home, work from anywhere, flexi-time, part-time working as well as options for hiring gig workers. Given the model that we operate in and the diverse workforce in India, we realized that one policy may not serve the needs of everyone. Those in production or customer-facing roles, for instance, will have different flexibility than those in labs or offices. Hence, we created a guideline or framework and have empowered the respective business leaders and managers to pick the part that works for them. This also complements our ‘managers as coaches’ initiative that we have introduced recently. We also extensively created awareness about the guidelines to our employees and managers so that they can leverage them with the right intent.

The overall Covid situation did have an indirect impact on hiring. However, we continue to expand and build the talent pipeline in digital, R&D, robotics, artificial intelligence, cyber security, etc. We have also, like others, now moved to a more digital/virtual mode of hiring and induction. We have provided support at multiple levels to our employees. There has been an overall dip in attrition rates as employees prioritize stability, purpose and reassurance of organization support.

How do you see the demand scenario panning out for the rest of the year amid the ongoing pandemic?

While we will continue to drive growth with our core sectors like oil and gas, cement, steel, mining, etc. Some of which are on an upswing currently, with the ESG push, the focus of these sectors is likely to be on efficiency, energy management, and sustainable solutions, where we have a good play. The lighter sectors, which now enjoy double-digit contributions to our business include F&B, data centers, pharma, power distribution, renewables, water and wastewater, etc. are also expected to provide significant contributions.

Now that the second wave is behind us, but the third wave is probably round the corner, how do you see project execution for FY22, in terms of its pace and fresh projects?

A lot has been projected and written about the pace of execution being crucial to sustaining growth with the looming concerns of an impending third wave and equitable distribution of this growth globally. ABB India’s agile and value-added portfolio offerings ensure that we are in a sweet spot to balance multiple ends of the infrastructure sector. The real estate part of infrastructure is facing some issues of demand/supply. However, the customer requirements have also evolved with time to focus more on energy efficiency management, digital solutions, remote monitoring, etc. and ABB is well positioned with a wide range of solutions, manufactured in smart and green factories across the country to service the demand. The other part of infrastructure which includes steel, cement, ports, specialized infrastructure like tunnels, water, and waste-water – most are on an upward trajectory. Much of our portfolio supports organizations that are driving a strong ESG agenda in terms of energy efficiency and bringing about more operational productivity within how they develop the products and solutions. We will continue to leverage growth pockets and calibrate our businesses to the recovery of growth industries like datacenters, renewables, electronics, food and beverages (F&B), and pharmaceuticals, and other large core industries that should re-start the long overdue capex cycle.

What is your capex plan for FY22 and have you revised your capex for FY21?

Since last year, we have been consistently investing as per the market or customer requirements. We opened a new robotics facility, which doubled our testing capacity. We initiated our foray into e-marketplace for B2B and B2C customers called ABB eMart and this year also one can look forward to new ranges of switches and motors from our Electrification and Motion businesses. We have just launched a new range of switches made in one of its kind smart factories in the country, which deploys our collaborative robot ABB YuMi. Our Process Automation and Robotics businesses are also aligned with global technology solutions and product launches for the Indian market. We will continue to invest in capacity expansion as well. We operate through our 18 divisions and each of them has carved out its plan for business expansion where it sees merit.

How much of your work force involves migrant workers? Did you see any issues because of the same in the first two waves? Going ahead, how do you plan to tackle it?

We have localised manufacturing facilities with footprints across the country. Each location is complemented by a mostly local workforce and a shifting populace across management and white-collar positions. Hence not impacted much by this issue.