Manufacturing faces acute labour crunch

Manufacturers are bracing for an acute shortage of blue-collar workers, as the devastating second wave of the pandemic spreads deeper into rural India.

Industry executives said that the deadly second wave has instilled fear among people, and a large part of the workforce, which have left for their villages, may not return until the situation normalizes, a distant scenario given the shortage of vaccines.

“Availability of labour in April and May has always been a problem since some of them go back to their villages for farm work, but this time, the shortage will be acute since most of them are unwilling to come back to the NCR (National Capital Region) and other hubs in a hurry because of lockdowns in rural areas,” said Sanjeev Vashdev, managing director, Flash Electronics, an auto component supplier. “So, ramping up production in the coming months might be a problem, more so for smaller manufacturers.”

Last year, automakers across the country faced an acute labour supply crunch after the nationwide lockdown was lifted from May. The supply situation eased only by August and September when workers started returning, aided by the fact that rural areas were relatively less impacted in the first wave.

“Though lockdowns were imposed in early April in many parts of the country, we continued to purchase from our suppliers just to be ready when operations resumed. But it appears now that a labour shortage will disrupt operations if production has to be ramped up,” said Manav Kapur, executive director, Steelbird International, an auto parts maker.

A growing number of engineering and construction companies are also finding it tough to retain workers at project sites, with several states continuing to extend lockdowns. At construction firm Larsen and Toubro Ltd, the second wave of covid has prompted nearly 75,000 workers to leave project sites. “At the end of March, we had 245,000 labourers on our rolls. That has come down to 171,000 now. We have intensified huge campaigns to tell them that they are safe at L&T. Our intense campaigning is working to retain labourers within our fold now,” S.N. Subrahmanyan, chief executive of L&T, told investors in a conference call after the fourth-quarter earnings on 14 May.

In an emailed response, L&T said it is directly engaging with the workmen by sharing communication on their personal phones via SMS or WhatsApp messages. Different messages specially crafted to suit the aspect of the #SafewithL&T and other relevant themes are sent twice a day.

Rohit Poddar, managing director of Poddar Housing and Development Ltd, said his company had learnt a lesson from last year’s lockdown and informed workers in advance of the severity of the virus and limited availability of medical infrastructure in their hometowns.

Industry experts said the second wave has impacted the informal workers more as they lack job security and insurance.

“Organizations which need informal workers, especially in construction, have to think hard. This is the time when organizations should really look at formalizing their workforce and can use alternative forms of employment like temp staffing,” said Rituparna Chakraborty, co-founder and executive vice-president of TeamLease Services.

L&T and Poddar Housing and Development said they ensure full compliance of their staff and colleagues working with them. “All statutory benefits such as provident fund, ESI/BOCW and insurance (towards accidents/employment injury) are provided to the workers during their period of employment,” said L&T. ESI is employee state insurance, and BOCW is building and other construction workers welfare boards.

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