Boom time for real estate, but where are the workers?

Mumbai: Real estate and construction firms are giving out incentives to blue-collared workers to retain them on site this festive season. This is happening on the back of a severe manpower crunch in these industries, as a host of factors weans the workers away to other sectors.

“This year onwards, we are coming up with an incentive programme in which the worker or a team will get compensated if they complete their task before time and stay back at the project sites during festive season," said Megha Goel, chief human resources officer of Godrej Properties Ltd, adding that the industry is facing a manpower crunch for “construction workers, architects, and sales executives who can work on affordable to luxury projects".

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Manoj Gaur, chairman of Credai (Confederation of Real Estate Developers’ Associations of India) estimated that there is at least a 25% shortage of manpower in the sector at this time. “Companies are offering incentives for additional shifts, target-based incentives, and contractors are paid more if they manage to finish work in fewer days," Gaur said.

Hiranandani Group's managing director Niranjan Hiranandani said there is a shortage of at least 1,000 workers in his projects, including carpenters, bar benders, and plumbers. “Fifteen years ago, if I needed 100 skilled workers, I got 500, and now if I need 100, there are barely 20 skilled who meet the criteria," he said.

In July, infrastructure and construction firm Larsen & Toubro (L&T) had highlighted the manpower shortage when it said that it needs about 45,000 engineers and labourers. “We would at the moment, including attrition, need 20,000 engineers on the IT and IT-enabled services (ITes) business, and another 25,000-30,000 labourers for L&T group," S.N. Subrahmanyan, chairman and managing director of L&T had said in a press meet.

What’s sending workers away

Weather and safety concerns, poor living conditions and better compensation from sectors like quick commerce and logistics are deterrents to join the realty sector.

The major chunk of workforce in the blue-collared profiles come from Odisha, West Bengal, Chhattisgarh, Bihar, and Rajasthan. “They get paid ₹13,000-18,000 a month, but would prefer a quick commerce, delivery, logistics job over construction work," said Aditya Narayan Mishra, CEO of CIEL HR Services, a recruitment firm.

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Another factor at play is that workers do not have the skill sets that new projects demand, making them look at Israel and the Middle East for jobs. “The new projects need work done on aluminium and steel, and we lack that. Besides summers, the winter months become difficult for work because of the pollution and labour movement gets restricted," said Gaur.

The boom that is looking for workers

The real estate market has seen a sharp turnaround since the pandemic on the back of rising sales and property prices, lower unsold stock, aggressive land-buying and project launches.

The boom is not limited to metro cities but has galloped into tier-II and tier-III towns as well. Mint wrote in July that residential property sales in tier-II cities saw higher growth in FY24, led by higher demand for better quality homes. About 52 small cities grew 26% in sales last fiscal year compared to a 21% rise in the top eight metros, according to Liases Foras, a consultancy firm.

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Meanwhile, recruiters who work with the real estate and construction firms as vendors are hosting job fairs in villages to get the workforce. “We look for diploma holders, graduates from industrial training institutes (ITIs), and search through job sites that have a larger reach for white collared jobs in the sector," said Mishra of CIEL HR Services.