Abstract

In February 2025, India-based Larsen & Toubro (L&T), a multinational conglomerate, stated that it was experiencing a significant labor shortage throughout its businesses, which was causing delays in project execution. Sekharipuram Narayanan Subrahmanyan (Subrahmanyan), Chairman and Managing Director, L&T, expressed concern over the high rate of workforce attrition as well as unavailability of skilled labour. Although L&T employed 400,000 workers, it reportedly ended up hiring an extra 1.6 million workers per year due to attrition, which occurred three to four times a year at the rate of 10%. Subrahmanyan attributed the high attrition to the various government schemes & DBTs (direct benefit transfers) available to workers and their reluctance to relocate for jobs. L&T was struggling not only with the shortage of skilled and unskilled labourers but also with a shortfall of 20,000 engineers in its IT and IT-enabled services. Although L&T had created a dedicated ‘HR team for labour’ department and implemented welfare schemes, the company continued to face manpower shortages. How can Subrahmanyan help L&T navigate the labour crisis?

Learning Objectives

The case is structured to achieve the following Learning Objectives:

• Understand the internal and external factors that create manpower shortage in a company and how it affects the company.
• Analyze the role of HR policies in addressing a labour exodus.
• Design a manpower retention strategy for a large construction company.

Keywords

L&T; Construction Industry; Labour Crisis; Migration; HR Policy; HR Planning; HR Forecasting; Retention Strategy