Struggling to Retain Contractual Workers in Manufacturing: How Can We Improve?

Hi all, we, a Pune-based manufacturing company, are requesting your valuable opinion on the topic of retention of contractual labor. Our labor capacity is 500 per day. Despite providing good facilities to our workers, we are facing difficulty in retaining them for a longer period. They tend to leave their jobs within a few weeks and join other organizations offering similar pay and facilities, possibly with slightly better amenities such as canteen, bus transport, and others.

Challenges in the Manufacturing Sector

The manufacturing sector poses unique challenges compared to other industries, particularly in terms of the substantial need for unskilled workers on contracts. In our plant, the demand for manpower is high, but we are struggling to manage it efficiently and effectively. This daily manpower shortage is causing operational difficulties for us.

Seeking Suggestions for Improvement

We seek your suggestions on how to address this issue. What measures can be taken to improve retention rates and ensure a stable workforce? Your insights and recommendations are highly appreciated.

Thank you in advance for your assistance in this matter.

Regards,
Prose Gawade
HR (Industrial Relations)
Pune

It is very difficult to reply to your post. We all understand that retaining manpower, especially unskilled manpower, is a problem. However, there must be some cause, and as per my understanding, it will be nothing else but wages and benefits. In your case, workers move out for the same amount of salary and allowances. That means the problem lies with the supervisor/foreman/manager under whom these workers are 'forced' to work. If you study the interpersonal relationships of your supervisor/foreman/manager, you will gain insight. Please do that and revert back.

Please remember that people do not leave the organization; they leave MANAGERS!

Regards,
Madhu.T.K

Workmen only consider wages and benefits that they can see. They are least bothered about development. Therefore, you need to take care, and the way of handling them is quite different from handling skilled personnel. You need to make them feel as if you are a part of them and make them comfortable.

We are facing a similar problem, so we hire these categories of workmen from distant rural areas. We provide them with accommodations so they can be satisfied, as they will be earning more than they currently are. Many are looking for employment, and it is also cost-effective. This approach has worked for us.

Thank you both . One thing I have to mention here is that every day I walk on the production floor, and I have seen that the environment is quite good. Nobody has any issues with the managers. Even managers and other seniors have understood the importance of the workmen in our organization. So, I am not sure about this statement. However, I would like to share something with you guys: the facilities offered by us do not match those of other organizations. I have to be honest here so I can get the perfect solution from you.

For example, "A" company provides a bus facility, but we do not offer it to everyone. The food is also not up to the standard like other industries provide (e.g., Tata Motors, Jabil, Thermax). We have to charge a small amount for this from workers (contractual - Rs. 200/month, permanent - Rs. 30/month) to save the company's cost. Is this a big reason for this retention issue?

Please suggest!!

Regards,
Prose Gawade
HR (Industrial Relations)
Pune

Perhaps that may be one of the issues. Why don't you have a one-on-one meeting with employees so that you can understand where the problem is? Please do that.

Regards,
Madhu.T.K

This strategy was used last year, and it was found to work for some time. However, the issue has resurfaced.

As an HR manager, what suggestions could you offer?

Thank you,

Regards,
Prose Gawade

Employee Engagement Strategies for Retention

In the service sector, take-home salary is considered, and in the manufacturing sector, benefits are considered. Initiate motivating activities for them that are cost-effective. The employee engagement plan includes a birthday gift, an anniversary card, a bonus for years of service, a weekly lunch together with all employees, and many more.

Try to bring them closer and give them a personal touch through frequent interaction. Discuss with them that we are striving to improve for them, and these efforts are ongoing; it will take time. However, maintain professionalism as HR serves as the bridge between employees and employers. Show empathy rather than sympathy.

Hope this approach may work for you; it should be a group effort.

Regards

So much discussion has already taken place. Mr. Madhu TK has analyzed the problems correctly and has also provided you with the solutions. At this stage, I can only say that you need to calculate the cost of attrition of contractual employees. How is this cost impacting the bottom line? Unless you discuss this in financial terms, nobody will take your views seriously.

One of my clients is a manufacturer of white goods. Managers and supervisors have informed me that these contract workers are the biggest challenge. If they were made permanent, our work would proceed more smoothly, resulting in fewer job errors, less shouting, and less stress. However, the management does not seem to understand this. Every management team tends to go with the flow of the time. Previously, there were not many contract workers. Now, regardless of cost, it has become a trend to outsource everything. This is the struggle of the current generation, and we are all part of it.

Thanks,

Dinesh V Divekar

Thank you for the comment and for providing me with some insight into the upcoming moments. I had a similar thought, and now I am planning to move forward and meet with my senior authorities to further investigate this matter. Once again, thank you for all your help in this regard.

Regards,
Prose Gawade
Pune

Dear Prose,

Your query is straightforward to understand, and the explanation provided by Madhusir is quite sufficient. The issue seems to lie in the relationship between supervisors and casual workers. One solution could be to provide proper training to supervisors and implement a key strategy: encourage the formation of groups of workers that can collaborate effectively. You could ask existing casual workers to recommend others to join, without involving the contractor directly. Instruct your contractor to include these recommended workers in their roster. This approach could yield positive results promptly.

Best regards,

Mangesh Wakodkar
Senior Executive HRD