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Are Manufacturing Companies Worried About Too Many Ageing Top Managers?

  • L&T has a greying problem. By September, about 200 of its top senior and middle managers will retire from the 74-year-old engineering giant. L&T is not the only manufacturing giant in India preparing to bid adieu to a stream of retirees. PV Bhide, HR head of the century-old JK Group, too faces a similar problem, a majority of the top 100 group executives are 50-plus-year old. At National Thermal Power Corporation (NTPC), a majority of the top 100 executives are over 55 and nearing retirement. It's a recurring theme across manufacturing firms in India. From big private companies to PSU giants, most are grappling with a quickly greying top management. "There is a huge wave of retirement happening in the manufacturing sector. And not many companies are prepared for it," says K Sudarshan, managing partner, EMA Partners, a global executive search firm.

  • While the grey at the top is visible, what is more worrying is the greying in the middle layers of these companies. "A sizeable chunk in the middle is in their 50s. And that may be a bigger cause for worry," says Delhi-based HR consultant Arti Chaudhury.

The Lost Talent War

  • Manufacturing management cadre did not age overnight. In fact, back in the 1970-80s, a factory floor manager was the most sought after job. Those bright engineers who then flocked to manufacturing outfits are now in their 50s. Liberalisation changed the rules of the game as Indian graduates were lured by new economy sectors like telecom and IT. The factory floor seemed like a dull place to work compared to the shiny, air-conditioned, glass facade offices. That phase also coincided with the hard days for manufacturing as the likes of Tata Steel, Bajaj Auto focused on rationalising their workforce to make themselves competitive and efficient.

  • For example, in 2001-02, NTPC had revenues of `18,584 crore and an employee count of close to 24,000. By 2010-11, the company's turnover had risen to `57,407 crore but its employee base barely increased to 25,400. All this meant that manufacturing companies lagged in building their talent pipeline when their businesses were expanding rapidly.

Does Age Matter?

  • But are manufacturing companies really worried? "It is not a challenge for us," says SP Singh, director, HR of NTPC. It is a view echoed by many others in the sector. Partly this has to do with how differently executives from services and the manufacturing sector look at the age issue. Says Nirmit Parikh, MD, 3P Consultants, a headhunting firm: "In the services sector, at 55 you are dead and out. Nobody wants to hire you.

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