Labour Contractors (Thekedaars) to Human Resource Companies: Labour Market Intermediaries in India

Abstract

Labour market intermediaries (LMIs) are gaining prominence in forging employment relations with principal employer and labour in a tripartite setting. In this article, we underpin the current literature situating LMIs in the global value chains (GVCs) and global production networks (GPNs) to its historical provenance that of the Indian labour contractor (thekedaar) by studying the role of the labour contractor in three globally pegged Indian colonial sites: the Indian Railways, the Bombay cotton mills, and the tea plantations. This historical analysis helps us understand the morphing nature of LMIs in India, post-2000, in the form of human resource companies (HRCs). For the latter, we use a novel dataset—companies registered under the Ministry of Corporate Affairs, to extract those established to serve the purpose of LMIs. This data are juxtaposed with the theoretical framework that classifies LMIs into a typology of matchmakers, information providers and administrators. Given the long history and phenomenal diversity in practices of LMIs in India, we conclude that it is difficult to capture them within the existing classificatory frameworks and thus offers opportunities for theory extension. We conclude that though the thekedaars are evolving into a more sophisticated and formalised versions of human resource companies or Staffing Solution Companies, there has not been much change in their core functions as labour market intermediaries.

Methodology Appendix

The companies in India are registered under the Companies Registration Act (1956) by the Ministry of Corporate Affairs (MCA), Government of India. The MCA releases monthly data of companies registered across India under a) Indian companies, b) foreign companies, and c) limited liability partnerships. They give information on the fields such as company name, date and location of registration, company type, authorised capital, paid-up capital, and activity code and description as per National Industrial Classification (NIC) 2004 and 2008. We began by looking at the standardised activity code and description of the published data, which used NIC 2004 coding for Indian Companies and NIC 2008 coding for limited liability partnerships and foreign companies for the most recent six months. The activity code of 78 in NIC 2008 and the 5-digit code of 74,910 in NIC 2004 was helpful for us. Notably, the activity code of 78 in NIC, 2008, as given in the table below, has notable similarities with the framework of Bonet et al. (2013) see Table 3.

Table 3 Similarities between Activity Code 78 of NIC 2008 and Bonet et al., (2013) on the classification of LMIs

Further, NIC 2004 used a 5-digit code, and the following codes were helpful for us.

• 1. 74910 under NIC 2004 is labour recruitment and provision of personnel.

• 2. 74920 is Investigation and security activities.

• 3. 74930 is Building-cleaning and industrial cleaning activities.

We derived the keywords from the names of companies registered under the activity description of NIC Code 2004 and 2008. However, the data on activity code/description for new company registered was not marked by MCA before March 2022. Thus, we had to arrive at a list of keywords from the data during March 2022 and September 2022. We compared these with the kinds of LMIs in the (Bonet, et al. 2013) framework and got the final list of keywords as in Table 4.

Table 4 First Order Keywords for screening HRCs

These keywords were then applied for the whole period of 2016–2022 to screen for the companies established for serving the purpose of an LMI to arrive at a final list of companies that have been established with the purpose of being a human resource company.

Exceptions: Amongst the keywords, “career” and “skills” were included initially owing to their presence in the names of companies under activity code 78. However, upon further enquiry, it was found that these companies may have job-seeking candidates as their clients rather than any company/organisation as the client, as in the case of an HRC. Additionally, skilling is a fast-growing industry in India today, which may or may not have the intention of being an LMI that ensures jobs. Thus, for these reasons, we drop the keywords of career and skill in our analysis. The difference between keywords from the framework in column one and the data in column three in Table 4 gives insights into the developing country experience of LMI expansion and offers opportunity for further theory extension.