I'm seeking the help of HR Experts regarding the problems I'm facing as the Production Manager of one of top FMCG's of this country. Here are the details. Please let me know of any suggestions or articles or documents that could mitigate my problems. Thanks.

Current Issues regarding Contract Labour employment on Production Line in the plant:

1. The production line consists of 2 types of Labour :
a) Permanent Labour (known as Operators) who handle the line and fix it in case it stops. Responsible for production of that line. Skill level is high.
b) Contract Labour (known as Govt. Trainees or GT’s) hired through a collaboration with Govt. Contract lasts only for 6 months. Are paid by the hour. Skill level is very low & are asked to do simple jobs on the line such as loading/unloading the containers, putting filled containers in cartons, placing cartons in warehouse, dumping talcum powder in mixer, etc.

2. These contract labour are floating population, because they are here for only 6 months + they are paid by the hour meaning they are paid whenever they come. This means that discipline is very bad among them. They come whenever they wish to.
Currently, 140 contract labour are on payroll but only 90-100 show up regularly and we are severely understaffed. Absenteeism is a big problem.
There are several reasons for absenteeism : some feel they can get more money by working outside than working in plant in 1 day so they don’t bother to come.
Rs 200 is paid for working 1 shift of 8hrs.

3. Since we are understaffed in contract labour, we cannot make them work 3 shifts in a day (8hrs per shift). We need 45 contract labour on the line and currently only 90-100 are available regularly.. meaning we have to run 2 shifts for contract labour of 12hrs each which has 4hrs overtime.
Shift timing – 7am to 7pm, 7pm to 7am. Operators come every day and we have sufficient number, so operators work in 3 shifts.

This method of making contract labour work 2 shifts with 4hrs overtime has been done for a while and now contract labour have got the bad habit of overtime pay.
The 90-100 contract labour coming regularly come because they get 400Rs instead of 200Rs. (Overtime Pay is double the fixed rate)

Meaning if in future we ask them to work only for 8hrs, the 90-100 ppl coming may also stop coming.

4. Problem with using 2 shifts is that whenever contract labour are absent in huge number, line cant run. No Manpower.
Currently, 45 contract labour are used on line with 5 extra ppl on-call (just in case anyone is absent)
But if more than 5 contract labour absent, line cant run. Production is hampered.

Situation is even bad in night shifts as a lot of Contract labours leave lines and go find a place to hide and sleep sometimes.

5. There are many more problems that arise because of using contract labour directly on line .. For example before putting bottles in the carton they must do a final check whether cap placement on bottle is correct or not and sometimes they don’t check properly.

J&J don’t employ contractors for hiring contract labour. They use the collaboration with govt. and so there is no union among these contract labour.
They have made the situation very tough for Production team and I have been asked to put forward a proposal as to how can the issues listed above be tackled.

I need help regarding practical suggestions to mitigate these problems.

So far I have come up with only 1 suggestion:
a) Maintaining a Discipline rating for Contract Labour
Based on attendance and work behavior, Each contract labour will be given daily rating (1/5 or 4/5) of Discipline. If at the end of 7days in a week, his rating is below 2 then he will be given first warning. And if the following week also his rating is below 2 then he will be fired. HR will maintain this index.

Currently there is no such measure. And contract labour who don’t come regularly are not usually fired. I believe if this is implemented, we would have only those people on payroll who would want to come regularly.

And then if we have 140 people coming regularly, we can employ 3 shift schedule for contract labour also.

But there’s a problem with that too. If they are asked to work for 8hrs without any overtime, chances are more than 50% people wont come since I mentioned earlier how they are used to overtime pay. How do I tackle this issue?

If 3 shift schedule is implemented then line won’t be stopped due to no manpower since I can stop someone from previous shift for 4hrs overtime & ask someone from the next shift to come 4hrs early.
This cannot be done with a 2 shift schedule.

Please give me your input & suggestions. And please forward this to the factory HR dept asking them for help regarding these problems.

Thanks & Regards,
Nilay Kumar

From India, Mumbai

Dear Mr. Nilay Kumar,
I see you are facing a difficult situation that is affecting the work as well as culture of the workplace.
You need to take some actions that will put the situation under control and then gradually make it sustainable.
We at Kapgrow have OB and OD specialists who can assess the exact situation and then provide you solutions that are workable and practical. These solutions shall take care of various aspects and concerns of the Management.
If you feel you need the professional help, please feel free to contact us and our 'people experts' will be glad to help you,
Kind Regards,
Avika Kapoor
Vice President - Operations
Website: Kapgrow

From India, New Delhi

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