Declining Labour Migration in India: Are Government Welfare & Local Opportunities the Reason?

Declining labour migration in India is reshaping workforce dynamics across key industries. Migration has historically fueled economic growth by enabling industries to meet labour demands across regions. However, recent trends show that both blue-collar and white-collar workers are increasingly reluctant to relocate for employment. Labour shortages in construction and technology sectors have become a pressing concern as workers prioritize local opportunities over mobility.

SN Subrahmanyan, Chairman and Managing Director of Larsen & Toubro, recently highlighted this challenge, stating, “Labour is not willing to move for opportunities… Maybe their local economy is doing well, maybe it is due to the various government schemes & DBTs available to them, but they are not willing to move.” This shift in workforce preferences has significant implications for industries dependent on skilled and unskilled migrant workers.

For construction projects, the declining willingness to migrate affects the timely execution of large-scale infrastructure developments. Simultaneously, the technology sector is witnessing resistance from professionals who prefer remote or hybrid work over relocation. The combination of these factors is influencing hiring strategies, operational costs, and overall business planning for companies across India.

Declining Labour Migration and Workforce Mobility

For decades, construction and infrastructure projects across India have depended on migrant labour. However, companies are now facing difficulties in mobilizing workers for large-scale projects. Several factors contribute to this:

Government Welfare Schemes: Programs such as MGNREGA, Jan Dhan Yojana, and direct benefit transfers provide financial stability, reducing the need for labourers to migrate.

Improved Local Economies: With better employment opportunities available in their hometowns, many workers see less reason to move.

Quality of Life Considerations: Migrant labour often faces harsh working conditions, lack of social security, and separation from families, leading many to opt for jobs closer to home.

Cities Affected by Declining Labour Migration

Tech Hubs Facing Hiring Challenges: Bengaluru, Hyderabad, Pune, and Chennai have long been preferred destinations for tech professionals. However, companies in these cities now struggle to attract talent willing to relocate.

Labour Migration Hubs Impacted: Cities like Mumbai, Delhi, Ahmedabad, and Surat, known for their dependence on migrant workers in construction and manufacturing, are facing labour shortages.

Industry Impact of Declining Labour Migration

The declining willingness to migrate has a direct impact on industries that require workforce flexibility. Some key challenges include:

Labour Shortages in Construction: Large infrastructure projects such as the Mumbai Coastal Road Project and the Delhi-Mumbai Expressway have faced delays due to workforce shortages.

Recruitment Challenges for IT Companies: Finding talent willing to relocate for on-site work is becoming increasingly difficult, slowing down project timelines.

Higher Operational Costs: Companies must now invest in better incentives, including higher salaries, housing benefits, and local hiring strategies.

Data on Workforce Shifts

• A report by CMIE (Centre for Monitoring Indian Economy) states that India’s labour participation rate fell to 40% in 2023, compared to 46% in 2016.
• A NASSCOM survey found that over 70% of IT professionals now prefer remote or hybrid work models over relocation.
• In the construction sector, over 30% of skilled labourers who migrated for work pre-pandemic have chosen not to return to metro cities.

The Way Forward

To address this shift, businesses must rethink their workforce strategies. Some potential solutions include:

Enhancing Local Hiring: Investing in upskilling programs to create a sustainable workforce within regional markets.

Flexible Work Policies: Adopting hybrid work models to retain top tech talent without requiring relocation.

Better Worker Welfare: Improving working conditions and benefits to attract and retain both blue- and white-collar employees.

Adapting to Workforce Changes

The preference for local opportunities over migration reflects a broader change in India’s workforce mindset. While this shift presents challenges, it also offers opportunities for companies to innovate and create more sustainable, worker-friendly employment models. Businesses that adapt to these changing dynamics will be better positioned to attract and retain talent in the evolving job market.

About Spectrum Talent Management

Spectrum Talent Management is a leading manpower solutions provider in India, offering recruitment, staffing, and workforce management services. With over 16 years of experience, a presence in 13+ offices, and a global footprint across 18 countries, the company specializes in delivering tailored workforce solutions to meet dynamic industry needs.