PTCL offers separation scheme to half of its workforce

Says high cost of human resource and demands from 6,000 employees reasons for the scheme

ISLAMABAD: Pakistan Telecommunication Company Limited (PTCL) on Monday offered Voluntary Separation Scheme (VSS) to half of its workforce - the fourth scheme since its privatisation - in a bid to compete effectively with players in the telecom industry.

A decline in fixed landline business - once its mainstay - and digitisation of services have reduced the workforce requirement.



PTCL has offered VSS to 9,000 employees, which is half of its workforce of 18,000, announced Syed Mazhar Hussain, Chief Human Resource Officer of PTCL at a press conference.

This is the fourth scheme since 2008 - the year when the company offered VSS to 35,000 employees, out of which 30,000 opted for it.

“Customer satisfaction, high cost of human resource and demands from those 6,000 employees who had opted for the last three VSS schemes but could not be relieved are key reasons for the fourth VSS,” said Hussain.



In 2006, when the then government sold PTCL’s 26% stake to Dubai-based Etisalat for $2.6 billion along with management control, there were 64,000 employees.

Effective from Monday, the scheme was expected to be availed of by around 3,000 employees, he said, adding the cost of these employees had been estimated at Rs10 billion.

“PTCL board of directors has unanimously approved the scheme and the benefit package,” said Hussain.

PTCL was spending 35% of its revenues on human resource, which was a big issue for the company, said Hussain. He added the ratio was 12% to 15% in other telecom companies.

In 2015, the company earned Rs8.8 billion in after-tax profit, which was 69% higher than the previous year.



“Because of the mindset, we are not able to provide quality services,” said Hussain. The HR chief said the separation of old employees would allow the management to hire young qualified people.

“We have improved our services but the company is still not in a position to effectively compete with other companies with the existing workforce,” said Hussain while giving reasons for the fourth VSS. “Customer satisfaction requires further improvements.”

According to Hussain, with the successes reaped from the previous schemes and improved company performance, PTCL is now in a better position to offer this scheme to around 9,000 employees and can manage to relieve around 3,000 employees.

He said regular employees would receive transition pay with a multiplier of four (ie four times years of service) whereas the New Compensation Pay Group (NCPG) employees would receive it with an enhanced multiplier of six times years of service.

He said the minimum length of service for eligibility for pension had been reduced from 20 to 18 years and the retiring employees would get pension benefits of an additional two years of service. Those who opt for the NCPG will be given gratuity up to four times of basic salary and all those who opt for the scheme will be given leave encashment of 180 days irrespective of their leave balances.

In addition, allowances of six months for regular employees and 15 months for NCPG employees are also part of the package.

Published in The Express Tribune, November 29^th, 2016.

Like Business on Facebook, follow @TribuneBiz on Twitter to stay informed and join in the conversation.