High manpower costs and lack of skilled labour have become a sore point. Lakshmi Krupa reports
Whether you are in the market for an apartment or want to build your own home on a plot of land, the cost of labour has become as important a factor as, say, the sq. ft price or location. With property prices not coming down even now, when there is excess supply, one of the most cited reasons is spiralling labour costs.
The highly labour-intensive real estate industry is among the largest employers of unskilled labour. While builders complain about the lack of skilled and trained labour, labourers complain of unequal pay for men and women, hazardous working conditions, job insecurity and more. Analysts say labour costs have increased steadily, roughly four times over the last decade. “Today, unskilled labourers get Rs. 200-300 per day on average, but the rates are dependent on location and region. It was Rs.100-175 per day five years ago and around Rs. 50-75 per day 10 years ago,” says N. Hariharan, Office Director, Chennai, Cushman & Wakefield.
According to the Builders Association of India’s (Southern Region) data, the cost has increased by Rs. 50 in each category over the last six months. Male workers get between Rs.400 and Rs. 450 per day while women workers get Rs. 300-350 a day
The MNREGA factor
“In the last few years, the MNREGA (Mahatma Gandhi National Rural Employment Guarantee Act) has contributed to rising labour costs,” says Hariharan. Since MNREGA jobs are becoming increasingly available and assure minimum wages, workers prefer these to migrating in search of construction jobs. “The demand-supply gap has been growing, and is expected to rise three-fold in coming years,” he adds.
“Finding labour in the Chennai market has become quite difficult,” says A.B. Venkat, Sr. VP-Marketing, Land Marvel. Many workers are migrating abroad in search of employment. “We understand that traditionally this has been a huge source of employment and want to provide opportunities. We won’t be moving towards 100 per cent mechanisation, but unfortunately the quality of labour today is pretty low and we are mechanising various parts of our work,” he says.
A report by Synergy Property Development Services finds that “about a decade ago, if 700 to 800 construction workers were required on site for constructing about half a million sq. ft, today, the same work can be done by about one-fourth of the labour force”.
According to the report India's labour shortage is pegged to go up by 65 per cent by the next decade with more workers moving away from traditional brick-and-mortar industries such as construction and real estate to more lucrative industries such as IT, ITeS, banking and telecom.
The report adds that the acute labour shortage will drive the industry to go in for large-scale mechanisation.
It isn’t as much the shortage of manpower as the shortage of skilled talent that affects the industry most. “The shortage of quality talent in this sector mainly arises due to the absence of specialised real estate education. In recent years, even though demand for real estate has gone up drastically, the supply of graduates in related areas such as civil engineering, architecture and planning has not kept pace, remaining much lower than demand,” says Hariharan.
Apart from the professionals, skilled labour is also missing on construction sites, whether in masonry, carpentry, painting, tile-laying or bar bending.
Industry sources point out that women have been getting paid 15-20 per cent lesser than men in the unskilled labour sector, with men getting around Rs. 300 per day while women get around Rs. 250. In real estate, however, women have moved from office and clerical roles to those of agents and brokers, although slowly. “Women are also increasingly moving into roles of architects and designers and related fields of project management and monitoring,” says Hariharan.
The training gap
It’s important to note that the industry employs largely unskilled and semi-skilled workers. As machines increasingly take over, it is skilled labour that will be most sought after. Many organisations have now begun to provide training for the realty sector. These include the Indian Institute of Real Estate (IIRE), a registered non-profit organisation that has evolved into a certifying and accreditation institute.
IIRE offers real estate education and related skills training. NAREDCO has set up a National Institute of Real Estate Development (NIRED) as a centre for studies, research, training and certification. For unskilled labourers, the National Skill Development Corporation (NSDC) along with CREDAI-Pune has initiated a unique programme called Kushal to impart practical skills to unskilled and semi-skilled labourers. The programme offers free training to construction workers on site.
Hyderabad Industries Ltd has tied up with Shramika Educational society to train masons, carpenters and electricians. “Also, some paint companies and large developers give on-the-job training to unskilled workers, who are then bound by long contracts or bonds, and they get lucrative wages,” says Hariharan.