CHENNAI: Larsen & Toubro (L&T) is grappling with significant labor shortages, as highlighted by its Chairman and Managing Director, SN Subrahmanyan, during the CII Mystic South Global Linkages Summit 2025. Emphasizing the construction industry's challenges, he noted, "We have to employ 4 lakh laborers and the attrition rate is three to four times a year, so for employing 4 lakh laborers we employ about 6 million." This sentiment reflects the stark reality of labor mobilization faced by one of India's largest infrastructure developers.
Despite employing nearly 2.5 lakh staff and 4 lakh laborers at any moment, the reluctance of workers to move for jobs poses unique challenges. Subrahmanyan attributed this reluctance to various government welfare initiatives, including Jan Dhan accounts and the Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA), which provide economic stability to local workers. “People are not willing to come for various reasons, because of the bank accounts (Jan Dhan), the direct benefit transfers, Garib Kalyan Yojana, and the MGNREGA schemes and not wanting to move from rural places preferring comfort,” he explained.
The industry trends depict how welfare schemes diminish the urgency for many to seek opportunities far from their hometowns. Though the construction sector is critically important for India’s growth and infrastructure development, mobilizing labor has become increasingly complex. Subrahmanyan illustrated this dilemma by highlighting the increased preference among young engineering graduates for local employment opportunities over relocation. “When I joined L&T in 1983, my boss said, if you are from Chennai, you go to Delhi and work. Today if I take a guy from Chennai and tell him to go to Delhi and work, he says bye,” he remarked, pointing to the changing culture of work.
The scenario is not limited to the construction workforce; it extends to engineering roles, particularly within the IT sector, where professionals increasingly prefer remote work over traditional office environments. This cultural shift complicates talent distribution across regions and creates workforce distribution challenges. Senior leadership may struggle to adapt to these new preferences. Subrahmanyan conveyed this transition by stating, “We have to see how to live with this world and have policies which are flexible to understand all this and take it forward.”
To combat these labor shortages, L&T has taken proactive measures, including employing digital communication methods to reach out to potential workers, sending out job offers directly via messages to tradespeople. While this method signals progress, establishing contact is only one aspect of the larger challenge—actual mobilization. The construction giant's HR department is now dedicated solely to labor recruitment, enhancing operational efficiency.
Subrahmanyan pointed out, “Imagine having to mobilise 1.6 million people every year,” emphasizing the increased staffing needs driven by attrition rates. The situation is compounded by broader market factors, like the attractive opportunities presented by contracts overseas, with the company’s backlog reaching upwards of $22 billion across the Middle East. Consequently, many workers prefer jobs abroad, where salaries often outshine local offerings.
Despite these difficulties, Subrahmanyan articulated hope for L&T’s adaptation through innovation, emphasizing skill development and the integration of technology. AI and 3D printing are being explored as solutions, relieving the industry’s heavy reliance on traditional labor. He noted, "3D printed buildings are still costly when seen at a rate per square foot, but if labor is getting difficult, maybe sometime in the future, we have to live with this." Such forward-thinking strategies aim to build resilience against future labor challenges.
Meanwhile, Subrahmanyan recalled his past experiences, contrasting them sharply with current attitudes, saying, “It’s a funny world which we are trying to live in and many of us wearing slightly more white hair are trying to understand it.” The industry must navigate these cultural evolutions to remain competitive. He called for flexible HR policies to accommodate these changes, presenting workforce dynamics as both challenging yet necessary for the nation-building efforts of L&T and the broader construction industry.
With India's ambitions of growth hinging on timely infrastructure development, addressing labor availability becomes imperative. Subrahmanyan’s comments underline the urgency to understand and adapt to changing workforce behaviors to meet the industry’s demands efficiently, ensuring future construction projects are not significantly impacted.