How LabourNet is bridging the gap between employers and jobless migrants

LabourNet CEO Gayathri Vasudevan (left)
Workers are looking for jobs which they don’t get. The market is looking for particular kinds of workers which it does not get. The two pass each other like ships in the night. Why this yawning gap? 

This was the thought that struck Gayathri Vasudevan in 2008 when she was working with the International Labour Organisation. She quit her job because she ‘wanted to see execution on the ground, policy alone was not resulting in execution’ and created LabourNet the same year in Bengaluru to see if this gap between what the market needed and what was available could be closed. 

For three years, LabourNet ran a call centre in 48 zones of the city to register workers, certify them and send them to homes to perform jobs such as carpentry, driving, plumbing, electrical repairs and so on. It was a ‘hyper local connection’ like Urban Clap, i.e. connecting a house owner who needed a good electrician or plumber with a certified person.  The assumption was that the ‘information asymmetry’ in the market had to be fixed. 

The response was tepid. She delved into the reasons and found that one, people wanted workers with experience rather than just certification and two, the moment workers said they had come from an NGO, people felt they were not ‘really’ qualified. Vasudevan, 48, also noticed that while experienced migrant workers were finding jobs, relatively inexperienced ones weren’t. That’s when she decided to start from scratch and look at vocational training as the starting point. 

“The reality was that their education did not equip students for real world application. This in turn led to depressed wages, low job security, and stagnant productivity. Unemployment levels in India were not sky high; what was more worrying was that 300 million of the workers earned less than US$ 3 per day,” said Vasudevan.

From 2011, LabourNet changed track, ceasing to be a hyper local connection and starting technical and vocational training in three places: at work sites, its own training centres, and in schools. The main aim of all these activities was to bridge the gap between skills and market needs and to increase wages.  

Work sites and shop floors: LabourNet has worked with around 100,000 workers so far, training them at construction sites and with leather companies and rubber manufacturers. Typically, these workers were originally earning between Rs 9,000-10,000 per month (including overtime).  Vasudevan has managed to increase these wages by about 15 per cent to Rs 11,000-Rs 13,000 per month. Her aim over a two year period is to push this further to Rs 20,000-25,000 a month.  

Training centres: A second segment of training is delivered through Labournet’s 100 training centres in Karnataka, Tamil Nadu, Maharashtra, Himachal Pradesh, and Haryana.  This lasts for two-six months and includes beauticians’ work, welding, auto services (2-3 wheelers), and electrical services. Another 100,000 workers have received training through these centres.  Some have joined full-time and others have become micro entrepreneurs. 

Schools: LabourNet runs a four-year vocational training programme in schools. It begins by helping students identify their areas of interest from Class 9 onwards and guides them into the right training after Class 12, if they don’t want to pursue academics. It is working in 500 schools in Punjab, Haryana, Himachal, Odisha, Assam and Chhattisgarh. Around 30,000 students are enrolled in the training. 

Around 2013, LabourNet started working with micro-entrepreneurs in the medium and small enterprise sector who typically don’t invest in in-house training, tending to use outside contractors for their labour needs. LabourNet helps them to operate more as a ‘business’ than as an ‘individual’. 

It trains them in managing a team, finance, and inventory and stocks so that they can increase their yearly average earning from Rs 2.5-3 lakh per annum to as high as Rs 10-25 lakh per annum. Today, the company works with around 7,000 micro-entrepreneurs and some of them have managed to raise their incomes by 20-25 per cent over the past 18 months. 

From starting out more as an NGO, the company has grown at a rapid clip with 136 per cent year-on-year growth for last few years. Its annual revenue is touching Rs 175 crore. 

Vasudevan has very aggressive expansion plans: the goal is to reach $200 million (approximately Rs 1,500 crore) by 2024. A total of Rs 35 crore of equity funding has been raised in three tranches. In addition, debt funding of Rs 22 crore has been raised. The primary investors include Acumen and the Michael and Susan Dell Foundation. Labournet now has 2,000 employees, 43 per cent of them women. “For me, more than all the data, revenues and profits, LabourNet has been a ‘labour of love’ that’s allowed me to appreciate the real spirit of India’s countless migrant men and women who have a resilience I have never seen before,” she said.

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