India’s construction sector is facing significant challenges with labor shortages, largely due to workers’ reluctance to relocate for jobs, as emphasized by SN Subrahmanyan, Chairman and Managing Director of Larsen & Toubro (L&T), during the CII Mystic South Global Linkages Summit 2025 held in Chennai.
Subrahmanyan expressed grave concern over this issue, stating, "Today, there is a situation where employees have to travel to different parts of the world for assignments and business. Similarly, there is a need to work abroad and in other cities away from hometown."
These observations indicate not only the struggles within the construction domain but also reflect broader labor migration trends within the country.
At the summit, Subrahmanyan noted, "Labourers are unwilling to move for work due to comfort factors and the availability of various welfare schemes." He elaborated on the scale of the labor force within L&T, stating, "We employ about 230,000 staff and more than 400,000 laborers at any time. Despite this, we face high attrition rates, effectively needing to recruit about 1.6 million workers annually to maintain operations." This high turnover highlights the magnitude of the labor crisis faced by the construction industry, as Subrahmanyan reiterated the necessity of having 50,000 laborers for upcoming projects.
According to Subrahmanyan, the reluctance of laborers to migrate for work can be traced back to several factors, including successful government initiatives like the Jan Dhan scheme and direct benefit transfers. These programs provide financial stability, leading many workers to feel less inclined to seek opportunities far from home. "People do not want to come all the way from Muzaffarabad to Bombay to work, because why do you want to struggle?" he questioned. This sentiment resonates deeply with younger generations, who, unlike their predecessors, often favor comfort and stability over relocation.
The challenges extend beyond just manual labor. Subrahmanyan pointed out similar trends among educated professionals, especially those working within the IT sector. "If you tell an IT employee to come to the office and work, he says bye," he remarked, showcasing the difficulties faced by companies trying to mobilize skilled professionals. He added, “There is reluctance among engineering graduates as well; it’s not just blue-collar workers.” This shift puts added pressure on companies to rethink mobilization strategies.
The chairman observed how the booming economy of West Asia significantly impacts labor availability. With L&T's project backlog in the region expected to rise from $22 billion to $30 billion, many laborers opt for higher salaries abroad. Subrahmanyan pointed out, "Though the life of laborers there is difficult, they tend to earn three to four times more than what we pay here." This financial incentive is driving many to seek jobs overseas rather than within India, thereby compounding local labor shortages.
To address these challenges, L&T has initiated several measures, including establishing specialized HR departments dedicated solely to labor management. They have also launched training institutes aimed at skill development, offering courses to help workers improve their qualifications. Subrahmanyan stressed the importance of this initiative, emphasizing the need for innovative policies and educational efforts aimed at attracting workers back to construction roles. “We are trying to create goodwill by contributing to the local communities where we operate. This includes celebrating festivals and funding local initiatives to encourage workers to join us,” he mentioned. The investments reflect L&T's commitment to creating sustainable labor mobilization solutions.
With the need for infrastructure development more urgent than ever, Subrahmanyan’s concerns resonate not just within L&T but across the industry at large. He stated, “The nation has to grow, and infrastructure has to be built — roads and power plants. That is getting difficult to do because laborers are not available.” He urged for collective industry efforts to address this labor crisis, indicating it may soon jeopardize India’s broader national development goals.
At the core of this labor reluctance lies the changing workplace culture—one where young professionals place personal comfort and local opportunities over traditional career progression paths. This trend, noted Subrahmanyan, has transformed not only how jobs are cultivated but also how career trajectories are viewed by younger generations as they enter the workforce.
While L&T is acutely aware of the hurdles posed by labor shortages, the company continues to push forward with its recruiting strategies and technology investments. By leveraging tools like Artificial Intelligence to optimize operations and adopting forward-thinking construction methods, such as 3D printing, they are exploring innovative paths to overcome existing challenges. Subrahmanyan indicated, “If labor is getting difficult, maybe sometime in the future, we have to live with this. Innovation is our long-term answer.”
The need for evolution is clear—without it, the future of India’s infrastructure development could remain uncertain, jeopardizing national growth and vitality.