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Retain your staff

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Indian industry is facing the great challenge of high attrition of employees, affecting profitability & growth, says N K Sharma

We work; the majority of our adult lives. So, it?s important to find an environment where we feel valued and have meaningful work to do. Employees want to learn and grow and work for a manager who encourages and supports excellence in all they do. And in return, they want to be treated with dignity and respect, have some influence over their future and feel appreciated for their contributions. People thrive when they are part of a winning organisation. They have pride in the products and services being offered, they know they can satisfy customer needs and are confident they can positively impact the success of the organisation.

Conceptually, following are the imperative impacts and some of the reasons to be tackled by HR to take appropriate decision to stop attrition:

  • High attrition rate is always disruptive and costly as every placement is always costlier. Identifying the reasons why people leave an organisation should be continuously measured.
  • HR should take the plan to attack problems causing unnecessary turnover and to reduce employee cost.
  • A promising and industry comparable growth plan is always a great deal of help for better retention; successful organisations are able to create good environment besides meeting basic needs of employees.
  • Employee satisfaction: To assess employees? satisfaction level, continuous satisfaction survey should be regularly conducted.
  • Companies should create a conducive working environment. In this way they become an ?employer of choice?. People will want to work there because their individual needs are met – for a good job with prospect linked to training, appraisal and working with a good boss, who listens and gives some autonomy and helps with coaching and guidance.
  • Non-financial factors are equally important to retain good employees who are valuable assets of the organisation.

Reasons for Attrition
Attrition can be encouraged when it is part of a strategic business manoeuvre to reduce cost. It can also manifest itself when employees voluntary leave their job. This can happen for a variety of reasons.

1.Employees may move or retire.
2.Take another job.
3.Be ill-suited to the position they were hired to fill.
4.Want more equitable work.
5.Others may experience a lack of freedom or autonomy.

Factor Affecting Retention
1.For early career employees (30 years and under), career advancement (growth prospect) is significant.
2.For mid-career employees (age 31 – 50), ability to manage their career and job satisfaction is important.
3.Late career employees (age over 50 years) will be interested in security and autonomy.

Other factors
1.Company image.
2.Recruitment, selection and deployment.
3.Leadership – employees join companies and leave managers.
4.Learning opportunities – training facilities (national and international) for career advancement.
5.Performance recognition and rewards.

It?s crucial for business is when key people leave and vacate a key position they leave behind tremendous loss. Risk assessment should be done in advance and policy to retain such employees should be reviewed periodically. There should be continuous interaction with such key employees for knowing irritants, genuine requirements, autonomy for decision making, business output, appreciations for their effort and results.

Possible reasons for leaving
1.More pay
2.Better prospects (career move).
3.More job security.
4.More opportunity to develop skills.
5.Unable to cope with job.
6.Better working conditions.
7.Poor relationship with leader.
8.Poor relationship with colleagues.
9.Bullying or harassment.
10.Personal problems, illness, moving from native place.

Dealing with employee turnover
1.Deal with uncompetitive, inequitable or unfair pay system.
2.Design job to maximise skill variety, task significance and autonomy. Control over work and feedback.
3.Opportunity for learning and growth (Training and career path).
4.Encourage the development of social lives within the company (Relationship with boss & colleagues).
5.Ensure selection and promotion of capable people only as per demand of the job in which they have to work.
6.Appreciating employees.
7.Keep morale high: Keep employees in the loop about business issues and don?t let the office rumour mill get out of control.
8.Employees who feel you respect and value them tend to be loyal, which can diminish attrition.
9.Offer executive mentors and create challenging new opportunities for your top performer.

Conduct exit interviews:
1.You can learn a lot about why employees leave the company by conducting exit interviews. Ask resigning employees what they liked and didn?t like about their job and what would have made them want to stay. This information can help you reduce attrition in the future.
2.Take corrective steps to improve work-life balance, by developing policies including flexible working hours.
3.Eliminate as far as possible unpleasant working conditions or imposition of too much stress on employees.
4.Train managers and team leaders so that they can appreciate the positive contribution they can make to improve retention.
5.Bear in mind that people often leave their managers rather than organisations. Find out you are not that manager, if so, take corrective steps before it is too late for the company.
6.Make sure loyalty is made sustainable, averting a sense of insecurity in the mind of employees.
7.Bullying & harassment culture should be converted into handholding, guiding & enjoyable working culture.

Human resources in an organisation is as essential as business itself. With great efforts and cost, employees are developed and trained to be an integral part of business. Organisations always plan long-term associations and place their role in overall business roadmap to achieve objectives. Once a few employees plan to leave an organisation, this always leave behind a gap of relationship as it takes time to build it with a new joinee. High attrition is always loss of talent, and if attrition frequency is high, it adversely affects business prospects and profitability and stability. An organisation?s image building process also gets affected and talent acquisition becomes a difficult job for HR. In fact, the work environment of the organisation gets a jolt. Employee satisfaction and continued motivation with good appraisal system and reward mechanism can avert high attrition.

N K Sharma Vice – President (HR – P&A), KJS Cement Ltd, Rajnagar, Maihar.

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Price hikes, drop in input costs help cement industry to post positive margins: Care Ratings

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Region-wise,the southern region comprises 35% of the total cement capacity, followed by thenorthern, eastern, western and central region comprising 20%, 18%, 14% and 13%of the capacity, respectively.

The cement industry is expected to post positive margins on decent price hikes over the months, falling raw material prices and marked drop in overall production costs, said an analysis of Care Ratings.

Wholesale and retail prices of cement have increased 11.9% and 12.4%, respectively, in the current financial year. As whole prices have remained elevated in most of the markets in the months of FY20, against the corresponding period of the previous year.

Similarly, electricity and fuel cost have declined 11.9% during 9M FY20 due to drop in crude oil prices. Logistics costs, the biggest cost for cement industry, has also dropped 7.7% (selling and distribution) as the Railways extended the benefit of exemption from busy season surcharge. Moreover, the cost of raw materials, too, declined 5.1% given the price of limestone had fallen 11.3% in the same aforementioned period, the analysis said.

According to Care Ratings, though the overall sales revenue has increased only 1.3%, against 16% growth in the year-ago period, the overall expenditure has declined 3.2% which has benefited the industry largely given the moderation in sales.

Even though FY20 has been subdued in terms of production and demand, the fall in cost of production has still supported the cement industry by clocking in positive margins, the rating agency said.

Cement demand is closely linked to the overall economic growth, particularly the housing and infrastructure sector. The cement sector will be seeing a sharp growth in volumes mainly due to increasing demand from affordable housing and other government infrastructure projects like roads, metros, airports, irrigation.

The government’s newly introduced National Infrastructure Pipeline (NIP), with its target of becoming a $5-trillion economy by 2025, is a detailed road map focused on economic revival through infrastructure development.

The NIP covers a gamut of sectors; rural and urban infrastructure and entails investments of Rs.102 lakh crore to be undertaken by the central government, state governments and the private sector. Of the total projects of the NIP, 42% are under implementation while 19% are under development, 31% are at the conceptual stage and 8% are yet to be classified.

The sectors that will be of focus will be roads, railways, power (renewable and conventional), irrigation and urban infrastructure. These sectors together account for 79% of the proposed investments in six years to 2025. Given the government’s thrust on infrastructure creation, it is likely to benefit the cement industry going forward.

Similarly, the Pradhan Mantri Awaas Yojana, aimed at providing affordable housing, will be a strong driver to lift cement demand. Prices have started correcting Q4 FY20 onwards due to revival in demand of the commodity, the agency said in its analysis.

Industry’s sales revenue has grown at a CAGR of 7.3% during FY15-19 but has grown only 1.3% in the current financial year. Tepid demand throughout the country in the first half of the year has led to the contraction of sales revenue. Fall in the total expenditure of cement firms had aided in improving the operating profit and net profit margins of the industry (OPM was 15.2 during 9M FY19 and NPM was 3.1 during 9M FY19). Interest coverage ratio, too, has improved on an overall basis (ICR was 3.3 during 9M FY19).

According to Cement Manufacturers Association, India accounts for over 8% of the overall global installed capacity. Region-wise, the southern region comprises 35% of the total cement capacity, followed by the northern, eastern, western and central region comprising 20%, 18%, 14% and 13% of the capacity, respectively.

Installed capacity of domestic cement makers has increased at a CAGR of 4.9% during FY16-20. Manufacturers have been able to maintain a capacity utilisation rate above 65% in the past quinquennium. In the current financial year due to the prolonged rains in many parts of the country, the capacity utilisation rate has fallen from 70% during FY19 to 66% currently (YTD).

Source:moneycontrol.com

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Wonder Cement shows journey of cement with new campaign

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The campaign also marks Wonder Cement being the first ever cement brand to enter the world of IGTV…

ETBrandEquity

Cement manufacturing company Wonder Cement, has announced the launch of a digital campaign ‘Har Raah Mein Wonder Hai’. The campaign has been designed specifically to run on platforms such as Instagram, Facebook and YouTube.

#HarRaahMeinWonderHai is a one-minute video, designed and conceptualised by its digital media partner Triature Digital Marketing and Technologies Pvt Ltd. The entire journey of the cement brand from leaving the factory, going through various weather conditions and witnessing the beauty of nature and wonders through the way until it reaches the destination i.e., to the consumer is very intriguing and the brand has tried to showcase the same with the film.

Sanjay Joshi, executive director, Wonder Cement, said, "Cement as a product poses a unique marketing challenge. Most consumers will build their homes once and therefore buy cement once in a lifetime. It is critical for a cement company to connect with their consumers emotionally. As a part of our communication strategy, it is our endeavor to reach out to a large audience of this country through digital. Wonder Cement always a pioneer in digital, with the launch of our IGTV campaign #HarRahMeinWonderHai, is the first brand in the cement category to venture into this space. Through this campaign, we have captured the emotional journey of a cement bag through its own perspective and depicted what it takes to lay the foundation of one’s dreams and turn them into reality."

The story begins with a family performing the bhoomi poojan of their new plot. It is the place where they are investing their life-long earnings; and planning to build a dream house for the family and children. The family believes in the tradition of having a ‘perfect shuruaat’ (perfect beginning) for their future dream house. The video later highlights the process of construction and in sequence it is emphasising the value of ‘Perfect Shuruaat’ through the eyes of a cement bag.

Tarun Singh Chauhan, management advisor and brand consultant, Wonder Cement, said, "Our objective with this campaign was to show that the cement produced at the Wonder Cement plant speaks for itself, its quality, trust and most of all perfection. The only way this was possible was to take the perspective of a cement bag and showing its journey of perfection from beginning till the end."

According to the company, the campaign also marks Wonder Cement being the first ever cement brand to enter the world of IGTV. No other brand in this category has created content specific to the platform.

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In spite of company’s optimism, demand weakness in cement is seen in the 4% y-o-y drop in sales volume. (Reuters)

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Cost cuts and better realizations save? the ?day ?for ?UltraTech Cement, Updated: 27 Jan 2020, Vatsala Kamat from Live Mint

Lower cost of energy and logistics helped Ebitda per tonne rise by about 29% in Q3
Premiumization of acquired brands, synergistic?operations hold promise for future profit growth Topics

UltraTech Cement
India’s largest cement producer UltraTech Cement Ltd turned out a bittersweet show in the December quarter. A sharp drop in fuel costs and higher realizations helped drive profit growth. But the inherent demand weakness was evident in the sales volumes drop during the quarter.

Better realizations during the December quarter, in spite of the 4% year-on-year volume decline, minimized the pain. Net stand-alone revenue fell by 2.6% to ?9,981.8 crore.

But as pointed out earlier, lower costs on most fronts helped profitability. The chart alongside shows the sharp drop in energy costs led by lower petcoke prices, lower fuel consumption and higher use of green power. Logistics costs, too, fell due to lower railway freight charges and synergies from the acquired assets. These savings helped offset the increase in raw material costs.

The upshot: Q3 Ebitda (earnings before interest, tax, depreciation and amortization) of about ?990 per tonne was 29% higher from a year ago. The jump in profit on a per tonne basis was more or less along expected lines, given the increase in realizations. "Besides, the reduction in net debt by about ?2,000 crore is a key positive," said Binod Modi, analyst at Reliance Securities Ltd.

Graphic by Santosh Sharma/Mint
What also impressed analysts is the nimble-footed integration of the recently merged cement assets of Nathdwara and Century, which was a concern on the Street.

Kunal Shah, analyst (institutional equities) at Yes Securities (India) Ltd, said: "The company has proved its ability of asset integration. Century’s cement assets were ramped up to 79% capacity utilization in December, even as they operated Nathdwara generating an Ebitda of ?1,500 per tonne."

Looks like the demand weakness mirrored in weak sales during the quarter was masked by the deft integration and synergies derived from these acquired assets. This drove UltraTech’s stock up by 2.6% to ?4,643 after the Q3 results were declared on Friday.

Brand transition from Century to UltraTech, which is 55% complete, is likely to touch 80% by September 2020. A report by Jefferies India Pvt. Ltd highlights that the Ebitda per tonne for premium brands is about ?5-10 higher per bag than the average (A cement bag weighs 50kg). Of course, with competition increasing in the arena, it remains to be seen how brand premiumization in the cement industry will pan out. UltraTech Cement scores well among peers here.

However, there are road bumps ahead for the cement sector and for UltraTech. Falling gross domestic product growth, fiscal slippages and lower budgetary allocation to infrastructure sector are making industry houses jittery on growth. Although UltraTech’s management is confident that cement demand is looking up, sustainability and pricing power remains a worry for the near term.

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