Increased engagement, consolidation to help Airtel moderate employee attrition: Crisil

Bharti Airtel can moderate its employee attrition rate through increased employee engagement, career planning initiatives, as well as by consolidating its industry position, a Crisil study said.

The second-largest Indian telecom operator has an ‘above average’ attrition rate due to inherent industry challenges, despite improving in 2021.

But the company has been proactively focusing on improving employee support and engagement. For instance, it stepped up life insurance and medical imbursement for employees amid the Covid-19 pandemic.

Its employees have access to an in-house panel of doctors, oxygen concentrators and hospital beds where possible through the Covid Care team. Additionally, it also rolled out a vaccination program for its employees, their dependents and associates, the study highlighted.

As per the rating agency, Airtel has more than 14,000 employees in India and a total customer base is at 417 million worldwide.

Sunil Mittal-led telco, according to the rating firm, needs to focus on improving value creation for its shareholders which has been ‘subpar’ in the last few years due to competitive disruption, adverse regulatory outcomes, and Capex-intensive nature of the business.

“Over the five fiscals through April 2021, the annualised return to shareholders stood at 11.2% compared with 13.8% for the Nifty index. However, the company outperformed the Nifty index in the past two fiscals by rewarding investors with an annualised return (adjusted for rights issue) of 30% compared with 13% for the Nifty index. The company is restructuring businesses to enhance shareholder value,” Crisil said.

Under the new corporate structure Bharti Airtel will hold all digital assets while the telecom businesses will be moved into a newly created unit, Airtel Limited.

Up till now, Bharti Airtel housed the Indian telecom business, while digital assets were under Airtel Digital. Bharti Telemedia held international operations including Airtel Africa, the payments bank, data centre under Nxtra, Indus Towers and the direct-to-home (DTH) business.

However under the new structure, Bharti Airtel, housing the digital assets, becomes the holding company of separate units – telecom business under Airtel, Airtel Payments Bank, international businesses including Airtel Africa and infrastructure business under Nxtra and Indus, ET previously reported.

Crisil has assigned the ‘GVC Level 1’ to Bharti Airtel Ltd, indicating corporate governance practices and value creation at the company for all its stakeholders are at the ‘highest’ level.