Employee Poaching: A Case from Sheetal Structurals Private Limited
Sheetal Structurals Private Limited (SSPL), a tower manufacturing company based out of Baghpat, India, was established in 2006 for manufacturing telecom towers to cater to the need of upcoming Telecom Industry. As of 2014, the company was focused on manufacturing Electric High Voltage Transmission Towers for Power (electric) transmission. Its key customers included State Electricity Boards and Power Grid Corporation of India Ltd. SSPL was a subsidiary of Shyama Power India Limited (SPIL), a leading name for transmission line projects in the North Eastern States. SPIL acquired SSPL in 2006 to extend footprint in the tower manufacturing space.
On December 24th 2014, normal operations of the company were hit when three department heads resigned within a span of 24 hours. The events started with the resignation of Rajesh Srivastava, Manager, Production & Planning Department, followed by the resignations of Uttam Sharma (Uttam), Assistant Manager, Material Department and Manish Kumar (Manish), Manager, Finish Yard & Dispatch Division. All three of them cited availability of better opportunities outside the firm as one of the key reasons for their exit and requested to be released from duty within a week. Sudden exit of three department heads would have had a serious impact on production activity within the plant. Hiring proper replacements could take months as the company operated in a niche industry and experienced professionals were not easily available. To make the matters worse, SSPL was working on a strict deadline to deliver a batch of towers to its largest client, Power Grid Corporation of India Ltd.
Management investigated the case and found that a new upcoming tower manufacturer in Ghaziabad had lured away the employees through promises of better compensation. To minimize the impact on manufacturing activity, management decided to adopt a short-term strategy of identifying top talent within the organization and elevating them to handle the responsibilities of the employees who had left. In the longer term, the management decided to take corrective measures in the form of establishing a formal human resource department and strengthening the HR framework.................