To explain it better: my grandfather was interned in a german concentration camp in 1943 (after Italy surrendered) and later kept in a russian camp until 1946. He was fairly well treated in his own words, also thanks to his ability to speak both german and russian; and he often told me that many russian soldiers encouraged him to stay as a free man, rather than going back to Italy, given that there was no shortage of work.
Was this part of a coherent social policy, since the USSR might have been in need of work force? Or was this simply small talk?
The Second World War completely devastated the Soviet Union. Operation Barbarossa (the German invasion of the USSR in June 1941) was a war of annihilation; a month before the invasion, the Guidelines for the Behaviour of the Fighting Forces in Russia were distributed to the German forces. These guidelines stated that
"Bolshevism is the mortal enemy of the National Socialist German People. ... The struggle demands ruthless and energetic action against Bolshevik agitators, guerrillas, saboteurs, Jews and the complete liquidation of any active or passive resistance."^1
In this way, the war in the East was significantly different than the war in the West, and involved a much larger proportion of summary executions and destruction, in part due to Hitler's notorious Commissars Order, which deemed political commissars in the Red Army 'were not to be regarded as soldiers under the Geneva Conventions' and should be separated from other forces and immediately killed.^2 The attitude of the German forces was, therefore, ruthless, and the total death toll of the Soviet Union by the end of the war was approximately 27 million people, 11 million of which were combatants (these figures are often disputed in the historic literature). In the postwar period POWs were less likely to be offered Soviet citizenship or work than they were to be herded into concentration or forced labour camps, either dying along the way through exhaustion, disease, or execution, or being worked to death through manual labour.
For the reasons stated above, at the end of the war the USSR lacked economic manpower. As part of their plan to offset this labour shortage, the Soviets used POWs to help rebuild cities and in the construction of other projects. After the Battle of Stalingrad (1942-43) the Red Army captured 91,000 German POWs.^3 They were used to perform some of the most dangerous tasks that needed doing. German POWs after Stalingrad were 'put to work retrieving Volga river craft sunk by the Luftwaffe and the German Army.'^4 This work was so dangerous that '[o]ne Russian shipyard manager, shaken by the number of prisoners who died on this work, swore his daughter to secrecy before telling her about it.'^5 Such was the state of the city of Stalingrad in 1943 that Foreign Minister Vyacheslav Molotov declared that German POWs would not return home until the city had been rebuilt.^6 Conditions were so bad for Italian POWs captured after the Battle of Stalingrad that there were numerous reports of cannibalism in their POW camps.^7
While some POWs were used for forced labour in cities, many more were transported in horrific conditions to concentration or labour camps with very little regard for their welfare. German POWs seem to be the most harshly treated among the Axis prisoners captured by the Soviets, most likely due to Germany's primary role in the invasion of the USSR and their treatment of Soviet POWs. The previously mentioned POWs captured at Stalingrad were initially provided 'no facilities and no rations ... whatsoever', and even after three or four days when food did arrive 'it was hardly sufficient'.^8 As the war progressed and the Red Army drove West towards Germany and Berlin, 'captured soldiers were routinely herded into open fields and left there with minimal food and no medicine, when they were not shot outright', and death rates of POWs in the first months of 1943 were around 60%.^9
TL:DR: Due to the labour shortages and the end of the war, POWs were most likely to have been forced into manual labour, killed off as they were captured, died during transport to concentration camps, or left to starve where they were found. I have not found evidence of a widespread Soviet policy of offering POWs the chance to stay as free Soviet citizens, and it is likely that the exchange between Russian soldiers and your grandfather was just small talk. You grandfather, as an Italian POW, was likely treated better than the German forces captured by the Soviets, but was nonetheless lucky not to have died in the USSR.
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