Skilled-labour crunch to treble by '20, warn experts

A severe crunch of skilled manpower in construction industry, expected to triple in the next decade from the present 30%, will negatively impact the overall productivity of the sector, warn industry experts.

Currently, the construction industry is facing a huge manpower shortage, especially those with skill-sets, to sustain growth in infrastructure and real estate sectors. "The construction process is highly dependent on the manual work and hence labour component is critical. Labour shortage causes delays in projects and raises the input costs leading to cost over-runs," Cushman & Wakefield executive director (corporate and investor services) Sumit Rakshi said.

Labour costs, accounting for nearly 15% of the total input, has increased by 30-40% since the past one year as availability of skilled workers is constrained, he said. When there is a delay in project due to labour issues, other costs also move up leading to higher costs overall, RICS South Asia managing director Sachin Sandhir said.

"Rising cost of cement, bricks and steel among others has already taken a toll on the performance of construction sector. Further, labour shortage leads to an average delay of 6-12 months across most projects thus affecting bottomlines of developers," Sandhir pointed out. According to a survey, real estate, construction and infrastructure sectors employ around 50 million, out of which only 2 million are professionally qualified, while the remaining chunk comprises unskilled and semi-skilled workers.

Over the years, growth of unskilled construction labourers has risen significantly from nearly 10.67 million in 1995 to around 25.60 million by 2005, depicting a CAGR of almost 9.15%. Besides the shortage of labour force, the current supply of core professionals comprising architects, engineers and planners is also in severe shortfall, Sandvik Construction vice-president Raghavan Ramaswamy said.

As of 2010, the demand for such professionals was 4.38 million with a supply of merely 5,69,000, with shortage of around 87%. By 2015, this demand is expected to rise to 4.73 million whereas, supply would be nearly around 7,25,000.

"The construction industry needs to increase extent of mechanisation. There is also a need to make available a section of professionals entering the market, who are qualified and capable of offering certain level of expertise and meeting the needs of the clients/consumers," he said. He also said there is also a need to launch specialised courses for this sector.

"The government should introduce more courses or at least make it a part of the technical curriculum. In addition to government initiatives, corporate investment in employee education and training can play a critical role to meet the rising demand for high-skilled workers," Ramaswamy said.