L&T Warns Of Infrastructure Slowdown Amid Skilled Labour Shortage

Larsen and Toubro Ltd. has cautioned that the pace of infrastructure progress could slow amid skilled labour shortage in certain sectors, even as the government's continued thrust on capital expenditure and business optimism augurs well for investment activity.

The company said the execution of its close to Rs 5 lakh crore worth of orders—of which 60% needs to be executed in India—will require three to four times the labour force at any point in time. "If I work with a labour force of 3 lakh people, I would require a database of 9 lakh people to replace when the churn happens," R Shankar Raman, chief financial officer of L&T, told NDTV Profit.

According to him, consistent availability of labour becomes an issue as safety and quality can suffer. Even if the workforce is available, it has to be a skilled workforce trained enough to meet the complex project requirements in the future.

As a major player in India's infrastructure and construction sector, L&T's results are closely watched for insights into the country's capital expenditure landscape.

If the labour moves or migrates due to festivals, harvesting, sowing or wedding season, they need to be replaced with an equally skilled workforce, he said. "We need to have a database of 9 lakh people to replace with skilled labour in such cases," Raman said. "There's no running away, and organisations have to gear up to meet the requirement."

The company has taken steps to set up the training infrastructure and is using digital models to skill the workforce. "We're trying to gamify the training to make it easier for the modern generations because they like to be trained on digital models instead of hard models,” Raman said.

“We have simulations in our training centers and we are trying to scale that up, not just in India but even in the Middle East,” he said.

This would help to not just meet the local requirement of skilling the resident population, but also to deliver on time. Having a skilled workforce is also a competitive differentiator, he said.