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Bridging The Skills Gap

Article first published in Indian Management across all editions

The government’s proposal to make skills training a fundamental right could not have come at a better time. Lack of job skills, rapid increase in urbanisation, and fewer job opportunities have led to the rise of an army of educated unemployed in India. The country sees millions of graduates pass out each year. According to a 2013 Labour Ministry report, one in three graduates up to the age of 29 is unemployed. In its India Skills Report for 2014, Wheebox, an online talent assessment company, observed that only 10% of MBA graduates and 17% of engineering graduates in the country are employable. In its National Employability Report of Engineering Graduates for 2014, Aspiring Minds said “less than one out of four engineering graduates are employable in the country.” As per a NASSCOM report, only 25% of IT graduates are readily employable. Basically, 75% of technical graduates and over 85% of general graduates are unemployable by India’s high-growth global industries, including information technology and call centres.

On average, Indian companies spend nearly $330 per employee on training in order to create a work-ready force. According to consulting firms such as Deloitte and PwC, Indian IT and ITeS companies spend anywhere between 3 and 3.5% of their payroll costs in training talent. In contrast, according to a recent survey by Deloitte, training expenditure in the US grew by 15% last year, the highest in seven years—a clear indication of the skills gap perceived by American companies. The situation is exacerbated when companies make wrong choices in hiring an employee. India figures among the top four countries worldwide, with the cost of one, single bad recruitment seemingly over $31,000, according to a survey conducted by global human resource consultancy firm CareerBuilder. The survey states that 88% of companies in Russia said they were affected by bad hiring last year, followed by 87% in Brazil and China, and 84% in India. In the US, it was 66%. While one could blame universities for failing to provide industry-relevant skills, the problem is rooted in our dismal education system. Pratham’s annual survey found that about half of fifth graders in rural India cannot read at a second-grade level. The non-governmental organisation, which aims to improve education, looked at grade-school performance at 13,000 schools in rural areas, where 70% of the population still resides. Going by recent studies and reports, here are some facts:

  • Only 2% of the existing workforce has undergone formal skills training
  • Only 15% of the existing workforce has marketable skills
  • It is estimated that 90% of jobs in India are skill-based and require vocational training
  • India will have a fifth of the world’s working population in the next decade

Demographic dystopia
Today, India boasts of having a young population with nearly 365 million people in the age group of 10-24 years. It is further estimated that the average age in India by 2020 will be 29, as against 40 in the US, 46 in Europe, and 47 in Japan. The Indian government hopes to take advantage of this young, dynamic, and productive workforce to make the country a global manufacturing hub and the skilling capital of the world. Interestingly, while the labour force in the industrialised world will decline in 20 years, India’s demographic dividend will begin to kick in. Over the next decade, 13 million people in India are expected to join the workforce. If these facts seem a reason to celebrate, do not break the bubbly yet. If India is unable to transform the young brigade into a work-ready band, the demographic dividend it is so proud of will turn into a disaster. Two things can help avert this catastrophe: skills development and vocational training.

Bridging the skills gap
The skills gap is a common thread bringing together emerging economies—from Africa to
Bangladesh to Nepal—and India must lead the way in showing the world how to narrow it. Successive governments have recognised this and initiated various schemes to help bridge the employability-skills chasm. But it was only through the formation of the National Skills Development Council (NSDC) the battle to tackle the skills gap got a firm footing. The NSDC’s vision to train 500 million youth by 2022 has seen a plethora of initiatives and greater public-private collaboration.
More importantly, the government’s proactive measures such as Skilling India campaign, setting up a Ministry of Skill Development and Entrepreneurship—a first in the country—along with more recent initiatives such as the National Skill Development Mission, Skill Loan Scheme, and the Pradhan Mantri Kaushal Vikas Yojana (PMKVY) aim to create a ‘Skilled India’. The government has also brought about some changes to labour laws to enable young job seekers gain industry-relevant skills. In the Apprentices Act, the government is seeking to expand the scope of employment vis-a-vis apprenticeship on the shop floor. Until now, most apprentices have been from engineering backgrounds; the government aims to induct more non-engineers as apprentices through this measure.

Transformative collaboration
Earlier, lack of a coordinated effort between various ministries, the Centre and state governments, public and private sector, and the academia made any skills development related schemes a failure, even before they began. However, current efforts by the government(s), the NSDC, trade bodies, and the academia have been relatively successful due to better collaboration. Partners such as Centum Learning have made NSDC’s ambitious target to skill 500 million people achievable. A key ally to the
NSDC in fulfilling India’s national skilling mandate, we have become their largest partner contributing 20.2% of its overall achievement in the last financial year.
Our unique approach to skilling has made us the trusted go-to partner for companies looking to deploy skills development and vocational training initiatives. With domain expertise in 21 industry verticals and over 1,358 learning and development specialists, Centum has partnered with over 350 corporations to address the ‘skills-demand’ gap. We have taken our skilling engagement even further to establish corporate universities with clients such as Airtel and Skoda. Enterprise Training Solutions have become popular with companies, including Titan Industries, Punjab National Bank, and American Express. Take the case of Rajeev Bairwa, an uneducated and unemployed youth from Gaya in
Bihar. Like any other rural area in India, his village had sparse electricity with no access to modern technology. He was selected for training at Centum Skill Development Centre and today works at Navabharath Fertilizers in Jagdishpur, where he is an agro-consultant counselling farmers on the use of fertilisers. He has learnt to operate computers and is the only person in his village with this skill set.
We are also partnering with the Cellular Operators Association of India (COAI) in an interesting experiment. Together, we have launched a massive outreach programme to mobilise disadvantaged youth for skills training. One of the biggest challenges facing the implementation and execution of any skills development initiative is reaching out, educating, and motivating youth in the rural and remote parts. The outreach programme would help implement PMKVY, the government’s flagship outcome-based skill
development scheme. The pilot phase will be rolled out in Bihar, covering a subscriber base of 22 million and subsequently a nationwide roll-out by all the telecom operators that will cover nearly 400 million subscribers. Telecom providers will send text and voice-based awareness messages to the target audience. Interested youth can give a missed call to a toll-free number and an interactive voice response pushed to them would capture relevant details through an application. Dedicated teams managing the application would then enrol those interested in different skilling programmes under the PMKVY scheme.

While the success of this programme can only be gauged at a later date, it is a great example of transformative collaboration. Besides the realm of vocational training and skills development, such creative partnerships are also necessary in the education sector. India continues to confront a high ‘school dropout rate’—nearly 56.8%—by the time students reach the tenth standard. Further, we have partnered with CBSE and trained over 3,200 school principals and senior teachers under the Leadership and Strategic Management Training programme; and implemented National Skills Qualification Framework in Haryana for nearly 28 schools.

An inclusive approach
By making skills training a fundamental right, the government can pave the way for youth in rural India to unleash their latent potential and be a part of nation building. Only through an inclusive approach can India accelerate its growth rate. Vocational training, skills development, and quality education need to be made available to youth in the remote and rural areas. Such a holistic approach will also lead to ruralisation and stem urbanisation, easing the pressure on crumbling infrastructure. The game changer would be a better industry academia- government link that creates workready human capital. The proposed ‘right to skill’ [legislation] will task state governments with the responsibility of imparting vocational training through special universities that will be overseen by a regulatory body at the Centre. Chhattisgarh already offers the ‘right to skill’ as in countries such as Germany and Switzerland. Indeed, the country’s ability to seize the opportunities available to its young population completely depends on its success to tackle the issues plaguing its education and vocational training. Moreover, companies must find the right balance between building skills for today and preparing for an uncertain future, which calls for agile learning systems that are scalable, technology-driven, and innovative

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