L and T skilled labor shortage

L&T Faces Severe Skilled Labor Shortage, Needs 45,000 Engineers and Technicians

Larsen & Toubro (L&T) Faces Severe Skilled Labor Shortage: Impact on Project Execution

Larsen & Toubro (L&T) is experiencing a severe shortage of skilled labor, with a deficit of 25,000 workers in engineering and construction and 20,000 in IT and IT services, according to Chairman S N Subrahmanyan. This shortfall, due to factors such as high attrition and migration, is significantly impacting the company’s ability to execute projects.

Factors Contributing to Labor Shortage

The company attributes the labor shortfall to a combination of extreme weather conditions, disruptions from recent elections, and a growing trend of workers moving abroad for higher wages, particularly to destinations like Russia and Israel. Additionally, there is a high demand for specific skill sets that are currently hard to find. Subrahmanyan, commonly known as SNS, also highlighted an attrition rate of over 10%.

Historical Challenges and Current Measures

L&T has intermittently grappled with manpower shortages. Last year, Chairman and MD S N Subrahmanyan acknowledged that despite the company’s aim to recruit over 30,000 laborers, challenges persisted. Adverse weather conditions have further complicated the situation, forcing adjustments in project schedules and, in some instances, suspending work during afternoons except for essential or critical tasks.

To support its workforce, L&T provides transport facilities, health drinks, and meals at construction sites. Additionally, the conglomerate has established skill centers and other initiatives to help mitigate the impact of these shortages.

Current Labor Force and Ongoing Shortages

At any given time, L&T employs over 400,000 laborers skilled in trades like carpentry and masonry across its projects. In the engineering division, an attrition rate exceeding 10% exacerbates the challenge, resulting in a consistent shortage of over 14,000 engineers. “Currently, we need about 20,000 engineers, accounting for attrition,” Subrahmanyan stated.

Broader Industry Trends

L&T’s labor shortfall reflects a broader trend across the infrastructure sector and the industry as a whole. Recently, TeamLease reported that the semiconductor sector could face a deficit of 200,000 to 300,000 professionals by 2027, a critical concern as India aims to secure a substantial share of the global semiconductor market.