Workforce crisis hits construction & infra firms like L&T, KEC, HCC

The shortage has been exacerbated by workers' refusal to work in extreme weather conditions or relocate across states for the minimum wages on offer. Lack of skillsets required for the job is adding to the trouble.

“We are short of about 25,000-30,000 associates or labourers that we want at our various project sites," S.N. Subrahmanyan, chairman and managing director of L&T, said on Wednesday at a press conference. 

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Subrahmanyan added that this has come at a time when the company's clients are asking for projects to be completed faster “due to various reasons, with the growth of the economy and due to their own economic reasons".

“The crisis is very severe and the gap is in both skilled and unskilled labour in the construction business," S. Venkatesh, group president of human resources (HR) at RPG Group, said. "The boom in infra and construction business in Middle East and countries like Israel is impacting our manpower supply." 

RPG Group owns KEC International, which works in the engineering, construction and procurement (EPC) industry.

Where's the gap?

The gap in demand and supply is in both skilled and unskilled workforce. Skilled workers who can operate construction machines, fitters, riggers, and welders are in huge demand, and even unskilled workers who help out at the sites are in short supply.

In fact, the demand-supply gap is so severe that real estate and construction companies will need to increase their gig workforce by 11.5% versus 8.5% by the manufacturing industry, according to an internal study by recruitment firm TeamLease Services.

"This summer has been tougher than earlier years to get blue-collared workforce for the construction and infrastructure business and shifting them from many northern regions to southern and western parts of the country," said Kartik Narayan, chief executive officer (CEO), staffing, TeamLease Services. 

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Climate change, extreme weather conditions impacting crop patterns, unseasonal rains, etc. are pushing a subset of workers to stay in the farms rather than move to another state to work in the construction business to earn a few thousand rupees a day.

Narayan highlighted that some workers get paid ₹12,000- ₹13,000 a month, which is often barely ₹5,000 more than what they earn in their hometown.

Ajit Gulabchand, chairman of engineering and construction firm HCC Ltd, noted that there was a “clear shortage of both skilled and competent workforce who are heading for not just the Middle-Eastern countries but even Russia".

The chairman of the Mumbai-headquartered firm that works on highway, roads, bridges, etc., stressed on taking immediate steps to improve the gap. “How do Indian firms get the workforce they need for these projects? We need to have discussions with the government on this," he added.

Why the crisis?

Blue-collared workers are those who have learnt a particular trade and often work in construction , manufacturing, real estate, and transportation sectors. They include masons, carpenters, those who are into bar bending, and those who work with cranes. Some of them earn on daily wages, some work for contractors, while others are picked up by staffing companies or directly by the company responsible for a project.

Recruitment heads pointed out that the deployment of workforce in a largely unorganized manner is leading to few opting for these sectors. 

“Companies outsource construction work to thousands of contractors, each taking up one part of the project, who in turn hire workers," said Lohit Bhatia, president of workforce management at business services provider Quess Corp. 

A major challenge in unorganized labour where multiple contractors are taken on board is that short-term contracts are rolled out to the workforce. So, once once a project gets over, they need to start hunting for another one. 

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“In comparison, those in the gig workforce in retail and banking are put on one project after another since the workforce is more organized," Bhatia said.

According to a study by blue-collar worker marketplace Huntr, the United Arab Emirates remains the largest hub, with around 3.4 million Indian migrant workers, followed by Saudi Arabia at 2.6 million, Kuwait at 1 million, Qatar at 750,000, and Oman at 700,000. 

Workers in the 18-30 age group comprise 50-60% of the workforce. They take up labour-intensive job roles like construction labour, factory work, warehousing, and domestic help. 

The report, released in June, highlighted that demand in the Middle East is driven by ongoing infrastructure projects and mega-developments in the UAE, Saudi Arabia's NEOM and Red Sea Project, and Qatar's FIFA World Cup infrastructure build-out.