Industrials, energy conglomerates see double-digit churn in human capital

Flagship entities of groups such as L&T, Vedanta, Grasim & Adani reported double-digit employee turnover in FY24

As some of India's big conglomerates in the industrial and energy space see brisk business, they are also witnessing high employee turnover rates, and in double digits, data for FY24 shows.

Flagship entities of conglomerates such as Adani, Vedanta, Aditya Birla Group, and Larsen & Toubro (L&T) all have reported a double-digit employee turnover rate for their permanent employee strength in FY24. Some of these companies are introducing new measures including better increments, EV car schemes, ESOPs, amongst other to reduce attrition. 
 

Adani Enterprises, the flagship entity for coal to airports of the Adani group, for instance, reported an employee turnover rate of 15.9 per cent for FY24. This is higher from the 13.57 per cent and 13.26 per cent it reported for FY23 and FY22, respectively. An email query sent to the company remained unanswered.
 

For Vedanta Ltd,  employee turnover rate was at 14 per cent for FY24, higher from 12 per cent a year ago. A spokesperson for the company, however, noted that the rate is lower from that of FY22 at 16 percent, owing to measures the company has taken.

Kartik Narayan, CEO (staffing) at TeamLease, a staffing solutions firm, highlighted, “For those in the core sector, the demand for skilled labour far outstrips supply.”
 

Many of these conglomerates find themselves in the midst of massive expansions and highest-ever order books, or are reporting all-time high production numbers, all factors fuelling higher demand for skilled labour.
 

Top executives from L&T in the past have highlighted there is a shortfall of skilled labour in the industry. L&T’s employee turnover rate in FY24 was at 11.7 per cent. Though it was lower from FY22 and FY23, it continues to remain in double digits. As of June, L&T has an outstanding order book of Rs 4.90 trillion, its highest-ever. 
 

“We have a holistic approach to tackle attrition and engage and develop our talent,” said C Jayakumar, CHRO, Larsen & Toubro, adding, the approach includes introducing policies such as EV car scheme, flexible leave policies, advanced education programs and focused initiatives for specific groups of employees such as women, 

Gen Z and EDRC.

 

Grasim Industries, the flagship entity of Aditya Birla Group, also reported a 12 per cent employment rate in FY24, after hitting a high of 14 per cent in the year before. An email query sent to the company too remained unanswered. 
 

Narayan added there is a genuine lack of skilled labour, which “leads to increased churn in the existing skilled labour pool, pursued with increased compensation by different companies”.
 

Companies like Vedanta look to address these concerns through various measures, including higher compensation and employee stock options (Esops).
 

In a response to Business Standard, Vedanta said the company has increased budget and given better increments, granted ESOPs to workforce, re-launched a retention cycle for this year, and institutionalized its hiring committee amongst other measures.
 

Jayakumar from L&T also agreed, the company, “continuously benchmark our compensation framework and policies with the market to ensure competitiveness compensation benchmarking, ring-fencing talent, post-retirement benefits, which we have recently revamped.”
 

The double-digit employee turnover rate trend is similar for Reliance Industries (RIL). RIL reported an employee turnover rate of 13 per cent for FY24, higher from the previous two financial years.
 

However, RIL’s employee strength also includes its interest in the retail and telecom segments. In its annual report, the company noted, “The retail industry typically has a high employee turnover rate, especially in store operations.”
 

An email query sent to RIL remained unanswered.

Narayan highlighted, “For companies like Reliance Industries, the employment trend is reflective of the changes in their investment cycle and lowered needs for human capital.”