Valuable views that can be implemented. In addition, I would like to share my views on the same.
1. It is very important to select good and reputable contractors whose record is appreciable in the concerned industrial area. If we make a good selection of labor contractors, our tension will be less.
2. As you rightly mentioned, attendance incentive (In our company, we are paying Rs. 300/- per month to the workers who complete 26 days in the month. We are paying the same on a quarterly basis to lessen the ESI liability).
3. Make it a habit and a system to make payments to the labor within the timeframe.
4. Provide welfare facilities and rates as being given in the concerned industrial area. Always treat them as good human beings. Small things pay very much as caring about their advances, medical treatment, etc. These are image-building exercises that ultimately pay off in the long run.
5. As we know, the labor class frequently changes companies even if they get Rs. 3-5 more in other factories.
6. As I already mentioned, the selection of reputed contractors is very crucial. It is the general tendency of the contractors to distribute their labor as per the deficiency of other units where they are engaging the labor. They frequently move the labor from one unit to the other to fill the gap. But good contractors shall not do the same.
7. Also, train the different departmental heads regarding the sensitivity of HR issues. The labor's stability also depends on the treatment they are receiving in their departments.
8. Care about their problems, such as advances, etc. We are not dependent on the contractors for any advances here, but the limit is fixed. We only provide advances against the contractor's bills to be deducted at the time of finalization of their bills.
9. Always listen to their views and provide solutions to their problems.
The above were the views that came to my mind.