Labour Shortage Impacts Real Estate Projects, Developers Recognizing The Value of Technology and Speed


Advancements in technology have helped simplify lives and business in particular by making it faster and cost-effective. The realty industry too is waking up to the benefits offered by technology and is looking at it as one of the solutions to tackle the labour crisis in the market.
Citing the reasons for the labour shortage, Naushad Panjwani- Executive Director, Knight Frank India says, “For the last few years, the shortage of skilled manpower is on the rise. With the urbanisation of rural India many projects are taking off in the non-metro destinations, hence migration has slowed down. With opportunities available closer to home the preference is to stay put. Also, over the years many engineers have preferred to take up cushy ‘desk’ jobs over gruelling site jobs. Many engineers have excelled in finance and other glamorous jobs.”
According to an Ernst and Young and FICCI report released last September, the industry is grappling with a 30% labour shortage. The gap has been growing ever since and going further the situation is expected to worsen as demand is expected to rise three-fold.
There are several problems that arise due to the shortage of labour. Dhaval Ajmera, Director, Ajmera Realty & Infra India, says, “Construction-related projects in the state are facing a huge problem of labour shortage. Labourers are not available even at higher wages and as a result, ongoing projects, including many realty projects, are progressing at a snail’s pace. Real estate firms are feeling the pinch of skilled and unskilled labour shortage as infrastructure growth picks up and workers get tapped by retail and other service-oriented industries. Cost of acquiring and retaining talent is going up too.”
Ajmera adds, “For retaining labourers, we provide them with excellent medical facilities to upkeep their health and mental well-being. Also, we have introduced Bal Shaala to provide basic education to the kids of labourers who are working with us.”
As labour becomes increasingly hard to find, real estate players believe that technology could provide a solution that is both speedy and cost-effective.
Ajmera says, “Technology is definitely a solution to overcome the labour issue and is cost efficient. To ensure that the construction is not hampered by the absence of labour, we already have cranes as an alternate for manual jobs like weight-lifting at the construction sites to ensure that the work is carried on in momentum and there is no hindrance for delay. We also use pumps for sheltering to ensure that the work is moving at a faster pace.”
Many feel that government schemes like the National Rural Employment Guarantee Act (NREGA) are also contributing to the shortage of labour. Panjwani says, “This is with regards to the low-end labourers. The cost of living in Mumbai is very expensive for them. Also, they do not have a fixed job. With NREGA, they have assured returns and if they are absent for 100 days in a year, it does result in a serious lack of labour.”
Migration is another factor due to which there is a shortage of labour. Nayan Bheda, Chairman and Managing Director, Neptune Group, says, “In Mumbai, labour mostly comes from Bihar, but now that area has developed and there are a lot of jobs there. As a result, the number of people migrating has become much less. Also infrastructure work in many states is tremendous, especially in Gujarat. Moreover, government approvals
in Mumbai are not in place that adds to irregularities in work patterns, which puts off labourers.”
In such a situation, new technology can prove helpful. Rakesh Sanghvi – Director, Sanghvi Group of Companies, says, “There’s always a need for new technology to bridge the gap between the speed of construction and labour shortage. Machines prove to be very useful in aiding timely construction of big projects. But for small-scale projects developers prefer the traditional method – more manpower. Developers belonging to the affordable segment prefer the use of manpower.”
While technology can help developers cope with the shortage of unskilled labour, going forward there will be an increased demand for skilled personnel to man the machines. Diipesh Bhagtani, Executive Director, Jaycee Homes Ltd, says, “The realty industry is currently facing a major shortage of skilled labour. It has also become difficult to retain the staff as labourers form an unorganised sector. Training skilled labour and technological upgradation will help in addressing this issue. We train workers to acquire the latest skill sets in building construction and make a concerted effort in caring for their families too.”
Bhagtani adds, “For technology, we have international class architects working on our projects, bringing latest technological innovations in construction that helps achieve international quality construction, lower cost and faster delivery of projects. Technology also makes processes less labour-intensive. New improved and innovative construction techniques like ‘slip form construction’, ‘prefabrication construction’ and ‘dry wall technique’ adopted in most of our new projects have resulted in enhanced customer experience.”
Support from the government is crucial for the training of skilled labourers. Panjwani says, “They should promote and support recruiting training institutes that train labourers with specific skills. Bringing technology to the real estate industry is a very expensive proposal. The government should lower the costs involved in hiring machines and promote their use in the industry. It involves discipline and planning.”
With technology, there will be many changes that will come about in the industry. Sachin Sandhir, MD, RICS South Asia, says, “New construction materials and technology are paving the way for an improved, responsive and sustainable built environment, where shorter product cycles and new forms of work organisations are emerging.” He adds, “There is a need to invest in the skill development, training and education of our workforce; considering technology will need to be operated by skilled workers, thereby providing a stimulus to the growth of labour demand in the future. Newer technologies have the potential to not only reduce project costs but also improve time to market.”


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