L&T: Grooming Leaders From The ‘Bottom’

Larsen and Toubro (L&T), India’s leading engineering, technology and construction behemoth, which has over five lakh employees, works on 800-1,000 projects at any given point in time — from constructing refineries and pipelines to marquee infrastructure projects in the country and abroad. And to add to the gigantic workforce, around 3,500 civil, mechanical and electrical engineers are recruited from IITs and NITs and other reputed government/private colleges every year.

So, how complex is it for the human resources (HR) department to recruit, train and maintain such a large number?

Sitting on the 5th floor of AM Naik Centre, L&T’s three-year-old corporate office at Powai in Mumbai, C. Jayakumar, executive vice president and head, corporate human resources, replies, “It is manageable because of our group structure and the concept of Independent Companies (ICs).” Each of the main verticals, at least 8-10 of them, functions with its own CEO, CFO, HRO, budget and five-year growth plan. “My job is to mainly coordinate with them seamlessly to meet HR needs across functions,” says Jayakumar, a veteran with L&T for over two-and-a-half decades.

The group’s evolution over the years, mainly on the back of large-scale digitisation since 2016 aided by modern tools such as virtual reality, artificial intelligence, machine learning, natural language processing, chatbots, etc, has helped the HR department address various challenges. “In the past it took at least two-three days to assess staff count data. Now the dashboard helps us assess the workforce real-time, at any project, any location,” says Jayakumar. L&T has a data bank of jobseekers —12-13 lakh — and AI helps in assessing the best-suited talent.

Graduate engineer trainees tend to leave their jobs after two-three years to pursue MBAs, the primary reason why L&T’s retention rate after a period of five years from joining is around 63% currently, up from 50-55% a few years ago. To retain quality talent, the company has in place a seven-step development programme to groom leadership from the bottom. To help graduate engineers pursue their MBAs, tie-ups are in place with leading institutions, including IIM Ahmedabad and SPJIMR. Over 120 diploma holders are sponsored for graduate engineering programme with reputed engineering colleges and around 170 engineers are also sponsored for MBA programme with IIM-A, SP Jain, KREA University, etc.

The group operates training centres for various businesses, such as the safety institute, the construction skills institute, the tunnel boring academy, the railways academy, etc., at L&T hubs, including Surat, Hazira, Vadodara, Chennai and Kanchipuram. Thousands of youth are also trained in professional courses every year, including plumbing, electrical, etc.

Pursuing an MTech in construction engineering and management is also an option for graduate engineers at L&T. Those with executive positions have to clear a nine-month-long module developed in collaboration with McKinsey to rise up the ladder. Best talent is sent abroad for training at reputed institutions, including Harvard, London Business School and the likes to equip them to take up leadership roles. Chairman emeritus A.M. Naik and CMD S.N. Subrahmanyan directly train around 24-25 future leaders for at least eight-nine months. Almost all of L&T’s current top leadership has come up through internal talent hunt and training, says Jayakumar.

Since L&T has numerous projects in remote locations, attracting as well as retaining talent is a challenge, especially in new and emerging business areas such as semiconductors, green hydrogen or renewable energy. “Those rare top talent come at a premium and most have one or two offers. But reverse brain drain is happening and many experienced expats are coming back to work in India,’’ says Jayakumar.

Whenever L&T takes up projects in remote locations, the HR and administration ensure quality housing for the family, education and other amenities. Even the welfare of contract labourers, including health, safety and insurance coverage, is taken care of at all project locations. ‘’Most of our employees love to stay at our guest houses rather than in hotels’’, says Jayakumar.

L&T’s attrition has come down to 10% or less from 13%-plus earlier due to various engagement and retention initiatives, claims Jayakumar. The group’s ‘Winspire’ programme promotes gender equality and inclusion. Women currently constitute 8.5% of its workforce, and the aim is to increase it to 12-13% in the next two years. “Women operate fleets of heavy machinery as well,” says Jayakumar.

With L&T evolving into a more digital and tech-driven firm, its HR practices and manpower management are also migrating to the next level.