Share with your CHRO
Larsen and T (L&T), one of India’s largest engineering conglomerates, is betting on internal capability building over salary competition to close widening skill gaps in electrolyser, semiconductor, and advanced infrastructure domains. Dr. C. Jayakumar, L&T’s CHRO, argues that compensation alone cannot manufacture the deep technical expertise these sectors demand. L&T’s approach centers on structured learning academies, apprenticeships, mentoring, and deliberate knowledge transfer from senior engineers to the next generation, treating talent creation as a supply-chain problem rather than a procurement one.
What this means for your business
The organizations most exposed to this dynamic aren’t necessarily the ones paying the least. They’re the ones whose talent strategy still treats compensation benchmarking as a proxy for workforce health. If your sector sits at the intersection of deep technical scarcity and rapid expansion, the salary lever has a ceiling: when everyone in the market bids up the same thin pool of specialists, you’re not solving a talent problem, you’re inflating it. The CHRO whose function can build capability faster than the market can price it holds the structural advantage.
The honest challenge with L&T’s “build don’t buy” framing, offered by a company whose scale makes internal academies economically viable, is that it’s easier to institutionalize when you employ hundreds of thousands across long-cycle infrastructure projects. The apprenticeship and mentoring model works when tenure is long enough for knowledge transfer to compound. For organizations with higher attrition or shorter project cycles, the calculus flips: you might invest in building capability only to fund a competitor’s talent pipeline. The build strategy is right in principle and context-dependent in execution.
The leading indicator to watch is whether your internal mobility rate is rising or falling. Organizations that genuinely develop talent see internal moves accelerate as people seek new challenges without leaving. If your mobility rate is flat while voluntary attrition in technical roles climbs, the employee value proposition is being evaluated and rejected quietly, before anyone announces they’re leaving. That’s the signal that compensation is doing all the retention work, and losing.
Concept deep-dive: Capability architecture
Capability architecture refers to the deliberate system an organization builds to develop specific skills over time, distinct from hiring for skills that already exist in the market. Think of it as an internal supply chain for expertise, with structured inputs like apprenticeships and mentoring, and measurable outputs like promotion-ready technical leads. The business case is straightforward: in domains where external talent is scarce and expensive, building is cheaper than buying, but only if the architecture is designed before the scarcity becomes acute.
Based on reporting from As demand outpaces skill creation, L&T doubles down on building talent internally: CHRO, originally published 2026-08-16 23:47:00.
