These companies are changing the way labour is hired (and fired) in India

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Heard of a company called UDS?

Like India’s IT companies, it hires workers and sends them to client locations. There’s just one difference: while the IT companies supply white-collar workers to firms across the world, UDS provides blue-collar workers to offices, factories, airports in India. They run assembly lines, do housekeeping, handle packing and loading, among other things. The workers are drawn mostly from rural India. UDS trains them and places them in companies in return for 7-10% of their pay.

Such outfits are called manpower supply companies, even though they employ both men and women. In the last decade, as companies scale back their permanent staff and increase their reliance on contract workers, these firms have come to account for ever-greater chunks of industrial and service sector employment in the country. UDS alone has 40,000 workers on its rolls. Its client roster includes manufacturers like Hyundai and glass-maker St Gobain. The work done by its workers occupies a long continuum from housekeeping to assembly-line production, and some of it quite technical.

Despite their rapid growth, the manpower companies are a poorly understood commodity. Before they arrived on the scene, employers sourced contract workers from the informal economy’s labour contractors. Most of the workers led bleak lives – low salaries, no job security, no safety nets for accidents or retirement. The only guarantee they had was of their pay and prospects of landing work shrinking as they neared 40 and their capacity to work dimmed.

In the grim and unregulated world of labour, manpower supply companies represent something new: the entry of the formal sector.

What has been their impact?

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