How Can We Retain Contract Labor and Ensure Quality Manpower in Production?

Hi all,

I am working with one of the leading automobile industries for the last few months. Management has given me the task to create an action plan for the retention of contract labor and to develop a plan for supplying quality manpower to ensure smooth production activities.

So, kindly help me regarding the retention strategies for contract labor and how to supply quality manpower. If anyone has an action plan format for the same, please provide it to me ASAP.

Awaiting a positive reply.

Thank you,
SRC

Hi Sunil,

I was working with one of the manufacturing units in Maharashtra. I have observed the following problems regarding labor, which are the root cause of retention.

1) Labor needs basic requirements, like ensuring their salary is calculated without any mistakes (mainly calculation of overtime).
2) Labor has many doubts about whether their PF amount is going into the right account or not.

Solution - Here we arranged a lecture by our legal consultant to clear up their doubts regarding PF and ESI. We also provided them with detailed information on each column mentioned in the PF slip.

Some retention strategies for contract labor:

- I have experienced that workers are very shy people in the company. Try to treat them with love and affection. Always give a smile, ask them about their health first, then their family, and then work. Assure them that HR is always there to help them. Once you know their problems, try to provide a solution as soon as possible. I did the same and became an ideal HR for them!

- HR should have proper communication with the union leader/lead hands of workers to understand their problems.

- If possible, take some contract laborers on the payroll as per the law.

- Ensure that senior workers or supervisors are not exploiting contract labor.

- You can provide more facilities to permanent workers, such as labor welfare and workers' participation in management.

When workers are assured that:
1. They and their future and family are safe with the company,
2. The wages they receive are as per minimum wage standards,
3. Their PF amount is safely deposited in their own account,
4. They are receiving more facilities compared to other organizations,
5. They have a friendly work environment, then the retention rate will decrease.

So, this is what I have experienced. I hope this will help you. If you have any other ideas regarding this matter, please let me know.

"There may be different situations in different organizations."

Wish you all the best!

Sunil,

Contract labour is not an organized sector, and in the automobile sector, its major industry leaders manage with contract labour. Issues that can come up are:

1. Supply-side issue - Availability of skilled labour that you are looking for.
2. Demand Forecast - Get this from your company, what they are looking for, when, and in the expected supply flow on a monthly forecast.
3. Today, since the industry is being supplied with all these people, try contacting your counterparts in your city and check with them who their suppliers are.
4. Take contracts on rolls who meet all legal obligations only.
5. Ensure you have a legal department to whom the contractor needs to sign off all legal formalities before he starts the supply. This will ensure on-time payment (minimum wages), PF, Bonus, Overtime payments, etc., on time.
6. Always have alternate contractors and ensure you have ensured that supply is competitively distributed.
7. All payments to be made only through the contractor, and he distributes the payment in your premises along with the Finance person to ensure that there are no non-payments.
8. All contract labour will be the responsibility of your company as per the Factories Act, and in any accident or mishap, you are responsible as an employer. So, ensure that you have taken enough safety precautions.
9. These contract labourers will keep extending their work hours for overtime payment. Ensure that you regulate them with enough replacements on time.

Regards

Dear Sir,

We have contractors for all manufacturing processes, and other legal and statutory compliances are in order. However, the problem arises when new employees join the organization. Although we provide on-the-job training, some employees leave after completing the training, leading to a lack of stability in the workforce. I have identified some basic requirements that should be fulfilled, such as transportation, canteen facilities, proper wages, and overtime compensation. Despite these measures, the issue of inconsistency in manpower persists, affecting manufacturing operations.

The challenge now is how to retain contract employees effectively. If you have any templates or formats for an action plan that could be used for a presentation, please provide them.

Thank you,
Sunil