The government is unlikely to approve a special voluntary retirement scheme (VRS) for the surplus staff of the three soon-to-be-merged state-owned general insurance companies. The insurers, Oriental Insurance, National Insurance and United India Insurance have a combined strength of about 50,000 employees.
Sources said while the insurers' unions had sought an SVRS scheme to be applicable for the staff, the government has not given a go-ahead. The Union Budget 2018 had proposed a merger of the three state-owned general insurance companies. The fourth one, New India Assurance, is the largest general insurer and is listed on the stock exchanges.
"For all the surplus staff, we had sought a special VRS scheme from the government. However, we have been told that it is not feasible at this point," said a senior union member.
Union officials added they would want the additional staff to either be absorbed into the existing public sector entities or be on deputation in non-insurance entities.
Human resource management is a critical aspect of the proposed merger that needs to be looked into. Each of the entities has an average staff strength of 14,000-16,000 and estimates suggest the combined entity will at least have to let go of 4,000-5,000 people.
These insurance companies also have very strong worker unions that will have to be taken into confidence before a decision is taken on the staff retention or dismissal.
The government has recently invited tenders for appointing a consultant for the merger of the three insurers. Among several issues, personnel management will be a key area of focus. The consultant will look at workforce management as also the strength needed for optimal growth, and letting go of under-performers.
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