Asia News Jun 11

Indian factories reopen and face a labor shortage

These firms are going all out to hire blue collar workers and offering many incentives

by AFP
Indian factories reopen and face a labor shortage
Workers fit out Maruti Suzuki Swift cars on an assembly line in Manesar in Haryana state. Photo: AFP

As India tries to unlock the economy after a two-month-long lockdown due to the spread of the coronavirus, industrialists are facing an acute labor shortage to run their factories.

During the lockdown, workers faced a loss of livelihoods and many left for their hometowns, often walking for many days. Later some special trains were deployed to help them reach their destinations.

A survey by staffing firm Teamlease Services found the construction and real estate sector was facing a shortage of 52% of staff, while the manufacturing sector was facing a shortage of 44%, the Economic Times reported.

Traders’ bodies estimate that nearly 60-70% of the labor force employed in Delhi left the city during the lockdown. These workers were employed as machine operators in factories, loaders, drivers, housekeeping staff, as well as those involved in packaging, construction workers, hand-embroidery workers, salespersons and security guards, among others.

In order to woo them back, many companies are setting up hostel and healthcare facilities for blue-collar workers near their plant sites. These firms are going all out to hire people from nearby villages as well as from far-off states, offering extra wages, bonuses, food and transportation facilities.

Engineering giant Larsen & Toubro, whose workforce was depleted by 230,000 to 70,000 in May due to migration, has sent its executives to states such as Bihar and Jharkhand, where the workers came from, to help them return from their hometowns. The company claims it is hiring close to 3,000 workers a day and is hopeful of soon restoring its earlier workforce strength.

Consumer products makers such as Dabur, Parle Products and PepsiCo have turned to hiring local people in the absence of migrant laborers. Some are even offering them housing and medical insurance. Realty firms are also making special efforts to get laborers back to work sites.

On the other hand, carmaker Maruti Suzuki is indirectly feeling the pinch of the labor shortage. While the migration of workers did not impact its own factories, it has badly hit its parts suppliers. Its supply chain is getting affected due to a shortage of components. In May, it suffered a steep 97% fall in output. 

It is not only industries, but even agriculture is feeling the pinch of the labor shortages. Farmers in the state of Punjab, often called the granary of India, have been arranging buses and offering other incentives such as advance payments, better wages and train tickets to bring migrant workers bck from the states of Uttar Pradesh and Bihar. 

In several parts of Punjab, the labor charges for the ongoing paddy planting has doubled to about 6,000 rupees per acre.