AK Singh tells ONGC to 'out-source' more

Vol 26, PW 2 (12 Jan 23) People & Policy

Within weeks of taking charge, ONGC chairman AK Singh has set alarm bells ringing by openly discussing staff cuts and more outsourcing.

On December 28 (2022), former BPCL chairman Singh was forthright during a two-day meeting of senior executives in which he said that organisations with a lean workforce are today the norm. "Let us not waste time developing in-house resources," Singh told assembled executives.

"Time is precious; an outsourced resource is also a resource; hire the best, be it manpower or any other resource." Singh appears serious.

According to an ONGC source, the new chairman is squarely behind a decision to defer the announcement of promotions for senior officers, expected on January 1 (2023). Inside ONGC, some even believe Singh is harking back to the regime of former chairman Subir Raha who prioritised streamlining the company before he retired in May 2006.

Raha was initially feared but later earned respect among colleagues for turning the company around. Will Singh have the same impact? "Data shows that outsourcing improves performance," he said.

"A variable workforce is of the essence." Singh said solutions would come only when something new is done and that initially, there would be pain, but in the long run, the organisation would benefit.

"The era of having a mentality to do everything in-house is over," added Singh. "The only way to overcome the talent shortfall in PSUs is to outsource; a balanced mix of in-sourced and out-sourced jobs is the best in business management."

Singh stressed that only "core activities" should be controlled in-house. Agreeing with Singh, director offshore and interim HR director Pankaj Kumar confirmed that ONGC would appoint consultants to evaluate the board of directors and the preparation of annual Performance Appraisal Reports (PARs) of senior executives.

Singh doesn't hide that ONGC will witness a significant workforce reduction under his watch. "The golden rule for ONGC now is to hire one for every two retirements," he said.

"And if required, outsource one." He stressed that "all the best companies" invest only a third of their profit on their workforce, which he said should be "conservative" and balanced with outsourcing.

In concluding remarks, Singh told ONGC executives to be "fearless and pure".