The relentless rhythm of looms and whirring of spindles have, for long, been associated with people’s livelihood in Komarapalayam—a textile town located about 400 km southwest of Chennai, the capital of the southern state of Tamil Nadu.
But that’s changing. A peek inside Nirmal Sathyaraj R’s office shows how the textile town is responding to corporate needs. As the head of corporate relations, industry interface, training, and placements at Komarapalayam’s JKK Nattraja Educational Institutions, Sathyaraj never juggled so many balls on campus.
The 37-year-old’s to-do list looks something like this: connect with companies’ human-resource (HR) teams to learn about vacancies; follow the groups that circulate job opportunities on instant-messaging apps such as Whatsapp and Telegram; call up local as well as large recruitment-services firms; and prepare students for campus placements.
The organisation he works for has over 5,000 students enrolled across its seven colleges in Komarapalayam, which offer degrees in pharmacy, engineering, arts and sciences, and more.
But now, people from the local community also call him up for job opportunities or referrals.
Komarapalayam has a population of about 80,000, and a sizeable chunk of it makes a living from the textile industry. But that very fabric of this town is changing as companies are desperate to find workers across age groups throughout Tamil Nadu for bigger-than-ever factories.
Four major suppliers to iPhone-maker Apple—Finland’s Salcomp, Taiwanese giants Foxconn and Pegatron, and homegrown Tata Electronics—alone are set to hire around 115,000 people for their units in the state over the next three years.
Amid this, Sathyaraj has started counselling even high-school students on their career path. He suggests upskilling courses, trains diploma holders on interview skills, and helps people write their resumes.
Such is the demand for factory workers that companies are even inviting candidates with education till class 8 to job fairs.
At the centre of this employment spurt is the country’s $155-billion electronics-manufacturing industry. The sector is seeing a fresh wave of energy with global firms such as Apple diversifying their global supply chains, the Indian government’s incentives to boost local manufacturing, and the growing usage of electronic components in industries ranging from aerospace to electric vehicles (EVs).
India is witnessing the “second wave of electronics manufacturing”, said Rahul Shah, co-founder of Bengaluru-based executive-search firm Walkwater Talent Advisors. The first wave was led by Tamil Nadu, he added, when Finnish mobile-phone maker Nokia, in 2006, started its plant in Sriperumbudur on the outskirts of Chennai.
Nokia’s entry into India paved the way for several global suppliers, including Salcomp, Flextronics, Foxconn, and Sanmina—all of which made Sriperumbudur an electronics hub.
The state now wants to cement itself as India’s top electronics exporter—the title which belonged to either Karnataka or Uttar Pradesh until March 2022. The following year, Tamil Nadu trebled its exports to $5.4 billion, taking the pole position.
Dominant player // At $6 billion, Tamil Nadu accounted for a third of India’s electronics exports between April and December of 2023; its market share was higher than that of Uttar Pradesh and Karnataka combined
A chunk of this growth came from Apple’s contract manufacturers.
Mobile phones comprised 53% of India’s $20.35 billion electronics exports during April–December 2023. That’s why attracting additional investments from smartphone companies and facilitating their expansion is critical to Tamil Nadu’s ambitions.
And the state’s efforts in that direction were on full display at the recently concluded Global Investors Meet in Chennai.
Tamil Nadu, which boasts the highest number of factories in India, cashed in on Apple’s diversification strategy to shift some production away from China. It got the US tech giant’s suppliers, such as Tata Electronics, Pegatron, and Salcomp, to commit billions of dollars to ramp up their existing capacities in the state.
The two-day event also attracted investment commitments worth Rs 6.6 lakh crore (US$80 billion) in areas including footwear, EVs, electronics components, and semiconductors.
But operating each mega factory requires tens of thousands of workers. And hiring and retaining them is anything but easy.
The hiring trap
“All these companies are under tremendous pressure to scale up as they have a huge order book pending,” said a senior executive with a talent-management firm. They and several others quoted in the story are unnamed as they did not want to comment on this matter publicly.
For context, India’s iPhone exports soared 177% to US$5 billion between April and October 2023 compared with the previous year’s corresponding period. The country’s share in global iPhone exports hit 7% in 2023 from just 1% three years ago.
As a result, there’s intense competition among Apple’s suppliers to grab the maximum share of the manufacturing pie. The most aggressive among them is the latest entrant on the list—Tata Electronics— which started making iPhone casings in the industrial town of Hosur, not very far from Bengaluru, in 2021.
In November 2023, Tata Electronics also got into the end-to-end assembling of devices after acquiring Wistron Infocomm Manufacturing (India), which had a unit in Kolar, Karnataka. It employs about 15,000 people in Kolar.
Now, the company plans to quadruple its workforce to over 40,000 people in Hosur. Tata is even exploring a joint venture with Pegatron for its second assembly plant.
Driven by the necessity to hire more hands, companies are pulling out all the stops to lure workers.
Tata Electronics offers its employees two meals a day, transportation, and hostel. It spends over Rs 10,000 (US$120) for each employee availing of all these benefits while charging them just a tenth of that amount. The company is also reportedly building a large housing unit close to its plant in Hosur.
Taiwan’s Hon Hai Precision, commonly known as Foxconn, too, provides similar perks to its 40,000- strong workforce in Sriperumbudur and is constructing an industrial township to house over 20,000 people on the outskirts of Chennai.
The Indian subsidiary of the world’s largest mobile-charger manufacturer, Salcomp, is also setting up a housing complex in Sriperumbudur to accommodate its workers. The company currently employs 15,000 people and plans to double the headcount to 25,000 by 2025.
In their pursuit of growth, these companies see no town as too small, no qualification as insignificant, and no skill as useless.
Recruitment by Tata Electronics, Foxconn, and EV manufacturers like Ola Electric and BYD has increased by at least 40–50% in one year, according to Sathyaraj. “Foxconn hired 10,000 people across Tamil Nadu last year, including a decent number from our college,” he added without sharing the placement figures.
Most electronics manufacturers look for frontend blue-collar roles such as assembly-line operators, smartphone-assembly technicians, quality-control officers, and machine-maintenance executives, said Sathyaraj. “For unskilled or semi-skilled roles, a three-month training is more than enough to prepare them [workers]. So, companies are ready to take even those who have passed class 10 or 12.”
Tata Electronics, Ola Electric, Foxconn, and Salcomp refused to discuss their hiring and expansion plans with The Ken. The headhunters quoted in this story, too, refused to comment on these companies.
There’s also a considerable demand for electronics and communication-engineering graduates, Balasubramaniam Saravanan, the director of placements at Sona College of Technology in Salem, told The Ken.
Electronics design and development firms have hired over 50 students from the batch that is graduating in 2024 at an average annual compensation of Rs 7 lakh (US$8,400), he said. This is a rise of over 25% from the previous year’s recruitment drive. “We are expecting more companies in the upcoming placement rounds.”
A never-ending hunt
The boost to electronics manufacturing is also improving gender diversity across factory floors. Even in other industries.
Tamil Nadu accounts for over 40% of the female workforce in India’s manufacturing sector. But these women have been predominantly employed in traditional industries, such as textiles and leather, and micro, small and medium enterprises.
Thanks to electric two-wheeler maker Ola Electric, which started an all-women Futurefactory in Krishnagiri in 2021, companies engaged in manufacturing EVs and battery-cells are hiring more female workers.
Women’s participation in the EV industry is rising due to the simplification of the assembly process with the use of robotics, believes Subburathinam P, who heads staffing practices for telecom and EV industries at recruitment firm Teamlease Services.
Automobile manufacturing, especially EVs, is becoming more like electronics-parts assembly. So, EV companies are preferring women, who are already fairing well in the electronics industry
Subburathinam P, chief strategy officer, Teamlease Services
There’s also been a shift in traditional automakers’ mindset.
“[About] 10–15 years ago, some of the auto-manufacturing firms didn’t even have separate washrooms for the female workforce,” noted Girija S, vice president at Quess Corp, a tech-enabled staffing and managed outsourcing-services provider. Now, companies specifically look for female employees, she added.
That’s because women are more target-oriented and less likely to switch jobs frequently, said HR experts.
But hiring female workers in large numbers has its own quirky challenges. For instance, women have rejected employment offers because electronic manufacturers don’t allow workers to carry any form of metal, said the talent-search firm executive quoted earlier. Complying with that would require them to remove their mangalsutra—a marker of married status among Hindu women—before entering the shop floor.
“Although companies provide safety lockers, many women consider this as a very sensitive thing,” they added.
And challenges such as these only compound the woes of manufacturers who are struggling to build their workforce.
Due to the influx of companies, several regions in Tamil Nadu have started facing acute manpower shortages, according to Teamlease’s Subburathinam. The industrial belt of Hosur-Krishnagiri-Dharmapuri, a poster example of manufacturing boom, is also the first to be caught in the crosshairs of rising demand and a workforce that’s fast turning shifty.
A base for automakers TVS Motor and Ashok Leyland, high-precision-components maker Sundram Fasteners, and fashion-accessories seller Titan Industries, the belt has transformed in the last five years. It now houses the manufacturing units of over 20 major EV and electronics makers, including Ola Electric, Ather Energy, Tata Electronics, and Delta Electronics.
“The available pool [of workers] in a particular location is common to all companies. A majority of these openings are for assembly-line operators, which mostly require unskilled and semi-skilled people,” added Subburathinam. And not all the employable people—especially women—would necessarily want a job.
These factors could lead to a demand-supply mismatch, forcing recruiters to expand their search. This explains why Foxconn is hiring women workers for its Chennai factory from smaller towns like Komarapalayam.
The labour supply for roles such as assembly-line operators, pick-and-place operators, smartphone-assembly technicians, and machine-maintenance executives has dried up in Tamil Nadu, said a recruiter for an electronics manufacturer in Hosur. Their firm is now expanding its search to the nearby states of Karnataka, Andhra Pradesh, and Telangana.
But not all companies can afford to do that. When state governments invite firms to establish huge factories, it always comes with a rider: a chunk of the workforce for these facilities must be sourced from within their territory. Tamil Nadu, Karnataka, and Andhra Pradesh demand 75–100% of local hiring, depending on the sector.
“All companies are bound by MoUs [memorandums of understanding] they sign with the local government. So, they can’t go beyond the prescribed norms and hire from other states,” said the headhunter.
Big drill for skill
While finding workers in such large numbers is hard, retaining them seems harder.
Recruiters who spoke with The Ken said for interviews, they typically invite double the number of candidates as the job openings.
“There are dropouts at every stage,” said Subburathinam, adding that some workers even quit within a week or 10 days after finding out that the role involves hard labour. Those at the assembly lines, for instance, may need to stand the entire time while working.
And hiring for the sector is likely to become more challenging. By 2025-26, the number of people employed in electronics-manufacturing -services in India is likely to surge by about 5X to over 6 million.
So, Tamil Nadu’s lead in electronics manufacturing depends not only on offering concessional land or infrastructure but also on ensuring a quality supply of human capital.
To that end, the state has tied up with 494 Industrial Training Institutes (ITIs) to offer 700 courses to equip workers with electrical, electronics, manufacturing, and other skills.
Companies aren’t behind in this area either. A lot of them are tying up with ITIs and local skill-development centres to prepare workers to meet their demands.
In June 2022, Tata Technologies, the homegrown multinational engineering and product-development company, joined hands with the Tamil Nadu government to transform 71 state ITIs into technology centres at an investment of Rs 2,204 crore (US$265 million). Such centres are aimed at providing skill development in areas such as EV maintenance, robotics, automation, advanced plumbing, and additive manufacturing.
Tata Electronics has even co-developed a diploma course in digital manufacturing along with Tamil Nadu’s Directorate of Technical Education. The programme will offer three months of classroom sessions and nine months of paid on-the-job training at the company’s Hosur plant.
Similarly, the Chennai-based conglomerate, TVS Group, has been running an exclusive training and services company since 2010 to arm people with automotive and engineering skills.
ITIs and local skill-development centres, according to Subburathinam, are the low-hanging fruits that companies tap for trained workers before looking at other avenues. “If an organisation requires 40–50 electricians in one go, where else will they find those many people.”
But training workers for blue-collar roles isn’t really a problem, countered Atul Lall, vice chairman and managing director of electronics-maker Dixon Technologies India. The need of the hour, according to him, is to get engineering talent of a higher order if the country aspires to move up the value chain— from merely assembling devices to becoming a component manufacturer.
To make his point, Lall gave the example of the latest iPhones or Samsung smartphones. “They are all made of titanium. Do we have [enough] engineers who understand that kind of organic chemistry, how titanium is processed, and what its properties are?”
Unfortunately, India isn’t producing such engineers, and the academia needs to intervene, he added.
Evidently, Tamil Nadu appears to be cognisant of that need. The state took a step in that direction during the Global Investors Meet. It launched ‘Semiconductor and Advanced Electronics Policy 2024’ to increase its share of electronics exports to 40% and create a skilled talent pool of 200,000 in the sector by 2030.
Thanks to the hunger for electronics dominance, people like Sathyaraj will likely have a lot more on their plate in the months to come.
Source: The Ken