Pakistan Telecommunication Company Limited (PTCL) is Pakistan’s oldest telecommunication company. Previously, The PTCL belonged to the government. Almost 12% of the shares were traded to the public on the stock exchange, and Etisalat Telecommunications acquired 24 per cent of the shares. Today, the government holds 62% of the shares and still has some significant control over the company.
There are many companies providing internet services in Pakistan. PTCL is still Pakistan’s favourite Internet service provider. The majority of households in Pakistan use PTCL. The reason for this is their high-speed internet service and cheaper rates. Although many internet providers in Pakistan provide better internet speed, still the vast majority in Pakistan use PTCL because of its low prices. That is why most people in Pakistan use PTCL.
PTCL offers the lowest possible rate, and their internet speed is good. This high-speed internet and more economical price are the two things that make PTCL worthwhile. According to Wikipedia, PTCL has 1.4 million Ufone customers, and the number is still rising. In 2008, Netflix decided to expand its operations in Pakistan and formed a partnership with PTCL which allows PTCL customers to get a six-month free Netflix account. PTCL has helped Netflix grow in Pakistan. Amazon Prime has a lot of content, probably more than Netflix, but still, Netflix is more prevalent in Pakistan due to the PTCL / Netflix partnership.
PTCL has launched a new scheme for its 4G customers, of 150 GB in 2000 Rs. only. This scheme is designed solely to encourage people to sit at home and enjoy Netflix or amazon etc.
Issues with PTCL
Currently, some problems are present at PTCL. These problems could have been a big reason for their downfall if PTCL did not take notice of them. The one issue that people always complain about is the signal dropout problem that has been a real problem with PCTL for many years. PTCL is doing everything it could to solve this problem. Due to their continuous effort, PTCL has removed this problem from many areas.
Another problem with PTCL is the lack of salaries increment. PTCL employees often complained about their salaries, not being increased. This lack of increment has been a reason for so many employees leaving PTCL. If PTCL wants to change this situation, they need to take some serious steps
The purpose of writing this report is to help a company solve its problem. We took Pakistan’s largest telecommunications provider, PTCL, as our company, and identified their problem. This problem that we have detected has caused some of the issues with PTCL. Employees who had worked at PTCL for only six months have started to leave because of the problem. In this report, we clearly explained the problem, what the causes of the problem are, and how this problem could be removed from PTCL. If PTCL implements our recommendations, this problem would be removed eventually and entirely.
Today, PTCL is one of the top companies in the telecommunications industry. But this situation is not going to be forever. If PTCL did not notice this problem, then the profit could turn into a loss, and who knows where this problem could lead PTCL.
Similarly, the consequences of this problem have also been suggested by the employees of PTCL. At the end of this report, we have set out several recommendations to solve this problem; if PTCL implements our recommendations, it will take six months to remove the problem. Our recommendation may have some of the necessary assumptions, but our recommendations are still the most practical recommendations that a person could make to solve a problem.
We have identified a problem. This problem does not have any effect on PTCL right now, but it is starting to cause some of the consequences that we have written in this report.
The problem, which we are talking about, is the problem that most companies have in Pakistan.
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No Salaries Increment
That problem is the lack of salaries increment. PTCL employees have mentioned that they believe the biggest problem with PTCL right now is the no increment in salaries. Employees who are working with PTCL for two-plus years receive no raise in their salaries.
We have explained some reasons why PTCL is not giving any increment in salaries, and we have laid down some recommendations which will help PTCL to eradicate this problem.
Employees are the lifeblood of an organization. Almost every company that is successful today is because of its employees. When companies take care of their employees, employees take care of the business. Simon Sinek once said you do not take your employees for granted because they are the ones on which your business success depends.
Employees at PTCL have gone through many challenges. The privatization of PTCL results in a tremendous amount of downsizing. Many people have lost their jobs and the employee left are receiving no or minimal increment in their salaries. PTCL needs to take some serious steps if they want to improve this situation.
Overview
The Diagrammatic Representation of the Causes and Consequences of the Problem is as follows:
Cause(s) of the Problem
Now we are going to talk about the cause of this problem. The employees of PTCL mention every cause, which we are going to mention in this report. Therefore, we believe the following are the cause(s), which creates this problem.
1. Over-Hiring
I read in an article that over-hiring is a company suicide. It is awful, and no company can operate where the number of employees exceeds the number of jobs. Most government business has this problem with hiring. PIA has it; the steel mills has it. PTCL was previously owned entirely by the government and, during this time, PTCL hired a large number of employees. This is the time when the over-hiring of employees begins. That is why, as soon as Etisalat acquired 24 per cent of PTCL’s shares, they started to reduce employees by downsizing.
You might think that privatization is eliminating this over-hiring problem, but that is not true. If Etisalat removes any employee, they have to pay him a pension and some other retirement benefit. This means that if Etisalat decides to remove any excessive employee, they have to give him a massive amount of money in the name of retirement benefits.
Etisalat decides to reduce a certain number of employees, but there is still an excessive number of employees to be removed. Since Etisalat has to pay these exorbitant salaries, they decide not to raise their salaries for a few years. If people leave, they would not have to pay any benefit to them, and the over hiring problem will be resolved. This is the first reason why Etisalat gives no increment in salaries.’
2. Over Saturated Market
Another cause of no increase in salaries is the over-saturated market. Today, the labour market in Pakistan has become over-saturated. This means that the number of employees exceeds the demand for workers. Most Pakistani companies consider this market as an opportunity to exploit labour. Companies know that it is hard to get a job today. That is why, no matter how bad the employer or the business environment is, the employee still does not quit his job to find a new one. That is why most Pakistani companies pay minimal salaries to their employees.
This lower salary reduces employee motivation, and when employees’ motivation decreases, the quality of their work also decreases. Customer service has been affected by low motivation, which is why most PTCL customers have started to complain about their customer service.
This oversaturated market is the reason why PTCL does not increase the salaries of its employees. This oversaturated market has been used by many business owners to exploit their labour, and PTCL is no different. They also use this oversaturated market as an excuse to exploit their employees.
3. Low Revenue Generation
Another reason for this no increment policy is the lower revenue. PTCL rates are lower than other competitors. This is the reason for its low revenue generation. Since PTCL revenues are not so good, they cannot afford to raise their employees ‘ salaries. This is another cause of the problem.
Cheaper PTCL rates are not the only cause of low revenue generation. Another cause of low revenue is the loss of customers. PTCL has begun to lose some of its customers. The reason for this is twofold. One is the rise of fast internet service providers like Nayatel and the other is the poor customer service of PTCL. I explained in the above heading that a loss of motivation is leading PTCL to poor customer service. If PTCL wants to change this situation, they need to increase the motivation of their employees. And increase in salaries is the best step for it.
The employees of PTCL suggest all of the reasons mentioned above. To solve this problem, PTCL must address the cause mentioned above (s). If PTCL did not pay attention, then this problem may lead to some drastic consequences which are under the heading of consequence in this report.
Actual and Potential Consequence(s) of the Problem
We now have a great deal of understanding about the problem that prevails at PTCL. Let us talk about the consequences of the problem promptly. Here are some of the consequences of the problem.
1. Decreased Performance
PTCL employees are losing their motivation. This loss of motivation has affected the performance of their work and has reduced the quality of their work. This loss of motivation is the result of no increase in salaries. PTCL does not pay any attention to this problem, and they haven’t taken any steps to solve it.
Many multinational companies take good care of the motivation of their employees. They give them high salaries, bonuses and vacations. They give their employees everything they need to get a high level of motivation, and when employees have a high level of motivation, the quality of their work improves. Unfortunately, PTCL treats its employees as a liability and gives them an average salary with no increments. This affects the work performance of workers, and PTCL has begun to lose its customers. They need to do something about it before the situation gets out of hand.
2. A large amount of Resignation of Employees
The next consequence is the high amount of resignation of the employee. If the employee is not happy with the company, there are two things he can do. One of them is to leave the company and find a new job. The second thing an employee can do is power through and stay with the company. Both of these outcomes are bad for the company. If the employee decides to leave the company, the company will lose all the time and money spent on his or her training. If the employee stays with the company, he will not make a great deal of effort in his work, which will hinder performance. Therefore, it is true that both of these outcomes are bad for the company.
We believe that this high employee turnover rate is because of the salary issue. We think this consequence can be avoided by increasing the salaries of employees by a substantial amount. This idea of increasing salary will lose some money, but it will reduce the employee turnover rate. This means this idea will save the money spent on the training of new employees.
3. Huge Training Cost
Another consequence of this problem is the enormous cost of training. If PTCL did not solve the problem, then there would be a massive turnover in employment. This massive employment turnover means that PTCL has to hire a large number of new employees. These new employees require training that increases the cost of training. This cost of training is a cost to the business, and it lowers the revenue when it is raised. No one wants that. PTCL needs to solve this problem if they do not want to increase their training costs.
If PTCL implements our recommendations correctly, this problem can be resolved quickly. This means that there will be a lower rate of employee turnover and, if there is a lower turnover rate, the cost of training will decrease. Since our recommendations lower the cost of training new employees, it can increase the revenue of PTCL.
4. Decreasing Sale
Another consequence of this problem will be reduced sales revenues. Sales depend on employees. The better the employees are, the higher the sales revenues will be. That is why most multinational companies pay their employees above the market rate to increase their motivation. These multinational companies have learned that their sales numbers depend on their employees.
If a company has highly motivated employees, their number of sales will be high and vice versa. Simon Sinek said correctly, “Take care of your employees, and they will take care of the business.” We know that PTCL employees are losing their motivation. No increment in salaries causes this dwindling motivation. If PTCL did not notice, then its sales number will continue to decline. The lower sales figure is a problem that PTCL is currently facing. If they want this situation to change, they need to make definite changes to their business.
My recommendations, if correctly implemented, can solve this problem quickly. If PTCL does not understand the seriousness of this problem and continues to do their business as they do, then their sales number will continue to decline, and many of the PTCL employees who are in the management of the company will lose their jobs.
If they do not want this to happen, they should take notes from our recommendations and try to improvise in the management of the company.
Recommendations
We have a great understanding of the problem now. Also, we know what the causes of the problem are. And what can be the consequences. But we still have not talked about how this problem can be solved. In this part, I’ll tell you everything about how to solve this problem.
There are three causes of the problem explained above. One is the problem of over-hiring, the second is the over-saturated market, and the last is the lower revenue. So, if we can provide a solution or solutions that can solve these three above problems, PTCL can solve this problem of no increment in salaries. We have come up with some solutions that can solve the problem of salaries increment in no time.
- Firstly, PTCL does not want to increase salaries due to the excessive number of employees employed at PTCL. They cannot fire them, nor do employees want to leave their paid jobs. The solution for this is simple; PTCL needs to take a bullet here and give their excessive employees early retirement. This is not good for PTCL at first because they have to spend an enormous amount in the name of retirement benefits. However, this will be very beneficial to PTCL in the long run. Let me explain to you with an example here. Let’s say PTCL has work that can be handled by ten employees. Let us say they have 20 employees which mean they have ten excessive employees. Then PTCL gives an early retirement to all of their excessive employees; this means PTCL only have to pay half of their salaries in pension, which will save the other half every month. Therefore, in the long run, PTCL saves money. Later, PTCL can use this money to increase salaries which will also increase employees motivation.
- Second is the oversaturated market. Many companies in Pakistan to exploit their employees have used this oversaturated market. PTCL is also using this market to exploit their employees. PTCL needs to stop doing it. No good can come up with this approach. They should increase salaries and give their employees some incentives or vacations which will increase their motivation level.
- The third is the low revenue generation. PTCL is currently losing their customers, and it cannot afford to raise the salaries of its employees. The solution to this problem is straightforward, and many customers are leaving PTCL because of their poor customer’s service. No increment in salaries results in poor customer service and low motivation in employees. Therefore, if PTCL raises the salaries of their employees, then their poor customer’s service can turn into excellent customer service, which will bring more customers, which will turn lower revenue into a high amount of income. You may think from where PTCL will get this more money to increase their employees’’ salaries. Well to get that extra money PTCL needs to raise their service rate.
If PTCL implements our recommendations correctly, then this problem of stagnant salaries will be removed from the company.
//The case study is submitted by Intesab Ahmed. He’s an MBA student at Foundation University, Islamabad.//
My name is Intesab Ahmed student of Foundation University ISLAMABAD. Currently enrolled in MBA
I already published my articles and case studies on different publishing sites and received good reviews
My friend Adnan Ali Khan was my partner in writing this case study and he was born and raised in Rawalpindi Pakistan. He was a bookseller before shifting to children’s publishing and has worked at a literary development company and a creative writing website for teens. He lives in Rawalpindi Pakistan.
