L&T’s chairman and managing director SN Subrahmanyan says the firm is facing a shortage of about 35,000 labourers. “We just don’t get enough labour, and the shortage is across business segments. The lack of skilled hands continued even after the pandemic, the time when the labourers migrated back to their villages,” he told FE.
L&T’s problem mirrors that of the industry in general, and infrastructure sector in particular. Last month, RPG Group chairman Harsh Goenka voiced similar concerns on microblogging site. “We want construction workers — we can’t find enough! We want truck drivers — huge shortage! We want plantation workers — they are not available! Can’t understand solution,” he wrote.
The problem seems to be growing by the day. According to TeamLease Services data, India is grappling with an alarming shortage of about 150 million skilled workers, compared with 138 million in 2020. The key sectors that face shortage are auto and auto components (35 million), building and construction (33 million), textiles & clothing (26 million), transportation & logistics (18 million), retail (17 million) and healthcare (13 million) among others.
“One of the underlying challenges contributing to this labour scarcity is the stark contrast in formal skill training. Only 5% of India’s workforce has received formal skill training, whereas countries like the UK (68%), Germany (75%), the US (52%), Japan (80%), and South Korea (96%) boast significantly higher skill development rates,” Kartik Narayan, CEO – staffing at TeamLease, said.
This deficiency is felt acutely across industries, particularly in construction (85%), IT and technology (84%), manufacturing (84%), wholesale & retail trade (84%), banking & finance (83%), education, health and government (83%) and restaurants and hotels (78%).
The shortage is likely to badly impact sunrise sectors like solar module manufacturing, which is expected to reach 95 GW of capacity by 2025-end. It is estimated that about 30,000 skill-certified workers will be needed for this sector by FY24-end, while the supply would be only about 10,000 skilled personnel.
How will the industry bridge this skilling gap?
“In one word, training,” said L&T’s former non-executive chairman AM Naik. “Training is the bridge between academic knowledge and performance on the field. India — or more specifically, Indians — need a change of mindset. We tend to look down on blue corner jobs. This creates an imbalance in the job market.”
Naik saidmost candidates’ first choice is either a management consultancy or IT-related jobs. There are few young graduates who are prepared to sweat it out in the field.
“This job is quite tough because an engineer might be working in Ladakh today and in Rajasthan a few months later,” he added.
Goenka asked several questions on X. “Do we need to mechanise more to reduce the need of people? Do people not want to work and live on doles? Do we need to do more towards skill development? Do we need a digital platform that matches employees and employers effectively?.” He added that “responsible skilling and training” are significant.
According to Suchita Dutta, executive director at Indian Staffing Federation, the apex body of organised staffing companies, “Companies are compelled to explore innovative strategies such as automation or outsourcing to bridge this gap without compromising on quality or output standards. While the shortage presents obstacles that need addressing, it also signifies immense opportunities for skill development programmes and vocational training initiatives.”
This is where flexi staffing firms pitch in as sourcing companies and on boarding experts, she said. The overall flexi staffing industry posted a 14% rise in FY23 and a 0.4% rise in the fourth quarter of FY23 year-on-year, Indian Staffing Federation data showed.
“Over the course of last one year (August 2022-August 2023), the infrastructure sector experienced a remarkable surge in job postings, with a substantial 62% rise in job postings. However, in stark contrast, the sector saw only a 5% rise in clicks (job seeker interest) during the same period, highlighting a significant disconnect between job supply and job seeker interest,” Sashi Kumar, head of sales at Indeed India, said.
Despite heightened demand for talent spurred by increased economic activity and infrastructure development, the sector grapples with significant challenges. These encompass an ageing workforce and a diminishing influx of new entrants. “The requirement for specialised skills in construction roles further restricts the pool of qualified workers, resulting in a substantial disparity between talent demand and the available workforce,” he added.
