Big Indian automakers now rely on almost 90% temporary workers
A new review shows that almost 90% of workers at big Indian car companies like Maruti Suzuki and Mahindra & Mahindra are now temporary workers.
This shift has happened over the past four fiscal years as these companies ramped up production.
While hiring temporary workers helps keep costs down, experts warn it can hurt team stability and make running factories smoothly a lot tougher.
Haryana Uttar Pradesh raise minimum wages
With so many temporary workers, the auto sector is seeing more labor shortages and wage protests, especially in places like Haryana and Uttar Pradesh.
The Haryana and Uttar Pradesh governments have had to raise minimum wages after protests, but relying on temporary staff has made it harder to keep production steady.
As Vinay Piparsania puts it, "Contractual manpower has given automakers flexibility to manage costs and adjust manpower with production cycles. But when 85-90% of the shopfloor is non-permanent, maintaining continuity of skills, experience, productivity and shopfloor discipline becomes much harder," said Vinay Piparsania, founder of MillenStrat Advisory and Research.