Realty needs to build legions, brick by brick

Yet India is a labour surplus economy and the US isn’t. Also the skill levels available for workers to pick up in the US far outweigh those available in any metro in India. Despite the difference, the sharply rising wages show how the skill shortage in the construction sector is driving up wages without any benefit to the rest of the economy.

WAGE LEVELS

* Minimum wage rate for skilled worker in Delhi: R9,568 per month

* Minimum wage rate in New York city: $7.25 per hour(Conversion based on a 26-day period and applying a PPP factor)

The result: plumbing gear for instance bought from the best of companies do not sit on their hubs properly. Repairs by the neighbourhood hardware dealer with a makeshift plumber creates a temporary solution. Eventually the cold water tap gets stuck, or won’t close properly, leaking water in the bargain.

This is a common occurrence in almost every real estate project. The examples point to the lack of adequate skilled people who can deliver quality services for the sector.

A study brought out by the Royal Institution of Chartered Surveyors (RICS) — an independent, representative professional body which regulates property professionals and surveyors — titled ‘Real Estate and Construction Professionals in India by 2020’ says that the shortage begins right at the top with fewer professionals available in core disciplines such as engineering, architecture and planning.

Bridges over sewers

“It is a fact that there is a shortage of both civil engineers and architects. The problem has reached such proportions that several colleges are shutting down their civil engineering departments,” says PSN Rao, a professor at the School of Planning and Architecture, New Delhi.

“Earlier there were courses in public health engineering. Now hardly any institute offers it for there are neither teachers to impart knowledge nor students to enrol,” adds Rao. The discipline deals with design and operations of water supply and sewerage systems, the backbone of any city. “Currently civil engineering departments in elite institutes have branched into specialisations in roads, bridges, even nuclear reactor construction, but not this vital field,” says Rao.

With official statistics projecting the country’s population to hit 1.379 billion by 2020 of which 35.98 per cent or 496 million living in urban areas, the consequences would be enormous. It is already showing in our cities: well-designed bridges, flyovers, viaducts and world-class highways. But come one spell of a thundershower, and one gets to see the city’s Achilles Heel: overflowing drains and flooded roads.

The kind of urbanisation projected would entail a corresponding growth in real estate. The RICS study estimated a total incremental demand of 7,566 million square feet of which the residential segment accounted for 3,278 million sq ft and a near-about figure for the commercial and industrial segment.

By 2020, residential demand would balloon to 4,232 million sq ft, which would need legions of professionals to manage that kind of growth.

Vacancies to fill

“The shortage of skilled manpower is at all levels in construction and real estate. At the labour level, workmen level (masons, plumbers, electricians, carpenters etc.) and also at the managerial level,” says Pankaj Bajaj, pesident, CREDAI NCR.

“A robust construction sector is an essential pre-requisite for India achieving the 6 per cent and above growth,” says Dilip Chenoy, CEO, National Skills Development Corporation (NSDC), a government-promoted initiative at imparting skills through a public-private partnership arrangement.

The RICS study says that in 2010, as against a demand for 4,382,000 professionals, the total supply remained at 5,69,000, a shortage of 87 per cent. In 2020 demand is projected to reach 5,113,000 while supply would only reach 8,83,000 — a shortfall of 83 per cent.

The managerial-level shortage is also due to the profession getting increasingly complex and are seeing the need for specialised professionals such as land acquisition specialists, valuers, quantity surveyors, facilities managers and experts in sustainable development.

The study says that such skills and qualifications are not being imparted in the traditional university system leaving them to core professionals such as civil engineers and planners who are carrying out such functions on an adjunct basis.

The industry is gearing up to meet such lacunae through education. The construction industry has set up National Institute of Construction Management and Research that offers several programmes in various disciplines of real estate and project management.

Further, the Confederation of Real Estate Developers Association of India (CREDAI), is building an institute for real estate research in association with the IIM Bangalore.

Even as these endeavours are a step at developing key managerial talent, it is the bottom of the talent pyramid that is crying for attention.

Bottom of the pyramid

“Two of the most important factors that will help any developer achieve project goals are the implementation of advanced innovative technologies and the timely availability of skilled as well as unskilled labour,” says Prashant Solomon, joint MD, Chintels.

It is ultimately their capability that results in the world-class finish that developers expect to deliver and buyers pay for. It is also due to their inability that promises made are often not kept.

“At the construction labour and workmen level, the basic reason of the shortage is that they tend to be basically rural, agricultural labour which doubles up as construction labour during the lean agricultural season. This is the reason we see huge shortages commencing from February right up till June every year when the labour force is harvesting their crop,” says Bajaj, who is also the managing director of Eldeco Properties.

A study by the Planning Commission working group for the 11th Five Year Plan has estimated the skilled workers in the construction sector at 4.25 million and the semi- and unskilled workers at 47.24 million. In 2020 the skilled work force would grow to an estimated 5.75 million while unskilled workers would rise to a whopping 95.14 million.

“They do not look at it as a long term career with incentives to skill up. They keep migrating from farms to cities and aback and also to different cities. This also the reason why construction labour is short on skills and unproductive,” says Bajaj. He also pegs half the time over-runs to this factor. “It is obvious that we need to invest in skilling and mechanisation of the industry,” says Bajaj. The downside of that would be at least a 25 per cent rise in construction costs.

Several big developers including Bajaj are running training academies to impart basic skills.

The NSDC in association with CREDAI has over the past 12 years have skilled 97,920 construction workers drawn from migrant labour. The Indian Council of Sanitaryware Manufacturers in partnership with NSDC have given plumbing skills to 12,11,768 trainees over 10 years.

Although such efforts are steps at addressing the issue, there clearly is a need for much more.

“The demands of the day can just not be met with this kind of an approach. Unless and until we gear up the overall system in a comprehensive and systematic manner, we will be far from competitive in the emerging global economic scenario,” says Rao.