Solving the labour crisis

With Sri Lanka well into its new phase of reconstruction and post-war development, the burgeoning skyline of Colombo and the large-scale construction projects elsewhere in the island have brought with them several logistical dilemmas for the Government as well as the contractors undertaking them. 

A shortage of labour has been chief amongst the problems as labourers flood out of the country in search of better incentives, particularly to the Gulf States.

This situation has left contractors desperate for a larger workforce, even offering incentives including vehicles for workers in order to dissuade them from seeking their fortunes elsewhere. With Sri Lanka’s construction plans in overdrive, contractors have even resorted to illegally employing foreign workers to man various construction projects around the country.

According to reports, the annual investment in new homes, roads and ports is expected to rise threefold from around Rs. 600 billion to as much as $ 11.6 billion this year. According to the Chamber of Construction Industry however, Sri Lanka will also need around 400,000 new workers just to keep up with the flow of these projects while some believe that the number is as high as 800,000. Experts believe that without bringing in labourers from outside the country, Sri Lanka is now facing a severe labour crisis.

With private contractors resorting to providing lavish incentives to curtail the flow of tradesmen out of the country, the Government instead seeks to raise the minimum wage requirements for workers heading overseas in order to curb migration. It is proposed that a Sri Lankan worker will only be allowed to travel abroad for work if they can submit evidence of future earnings exceeding $ 400 per month. Experts however see this as a risky strategy as foreign remittances remain the country’s foremost foreign exchange earner.

The Government also estimates that around 200,000 foreigners are employed illegally in the construction sector alone but the Government’s action to open up the sector to Nepalese, Bangladeshi and Indian workers may turn out to be a key factor in solving this issue.

With the social stigma amongst young people in the country surrounding blue collar jobs in construction, the notion that foreign workers will steal jobs from Sri Lankans is somewhat misguided. The fact that the shortage is so acute at the moment is testament to that while the lack of labour is also driving up costs, making it more expensive to build in Sri Lanka than in other South Asian nations. Furthermore, feeding demand through training domestic workers will take far too long because of the time it takes to gain the necessary experience for such highly technical jobs.

If there is free movement of labour, workers from oversees could take temporary jobs just for the duration of the development boom. This is particularly beneficial for cyclical job markets such as construction as was experienced during the Irish property boom (2000-2007).

An inflow of labour would also control excessive wage inflation which would naturally bring down construction costs and with nearly a million houses needed over the next few years, low-end housing would be more accessible if costs are reduced, thus creating the necessary space for sustainable development.

The fact that Sri Lanka is in dire need of affordable labour is undisputable. Therefore, the Government has to take decisive action to ensure that the country’s rapid development drive does not grind to a premature halt due to short-sightedness and inaction on its part.