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Pre Hire Training…Investment or Cost

Article first published in Hindu Business Line across all editions

An economic growth engine is well-oiled only if it has a steady supply of skilled resources.If India has to sustain the current pace of growth in its knowledge economy or meet the many ambitions of its private enterprise then a complete overhaul of its many institutes that impart vocational skills is needed.

While nearly 5 million students graduate every year from a thousand colleges and universities, nearly half of them are not employment-ready due to insufficient English language and cognitive skills, according to a recent report.

What is severely lacking in mainstream education is the absence of industry-specific skills and domain knowledge. Often, the skills taught in our technical institutions are not tailored to meet the needs of the industry, resulting in a higher unemployment rate among fresh graduates.

The oft-cited Nasscom-McKinsey study revealed that only 25% of the engineering graduates are employable. The number of unemployed educated youth between the ages of 15-29 has been growing in urban India and stands at 10 percent for males and 23 percent for females.For urban India, graduate unemployment is 8.2 percent while unemployment among post-graduates is slightly lower, at 7.7 percent.

The employability gap is not limited to India alone. According to the U.S. Bureau of Labor statistics, unemployment rates for those with bachelor’s degrees or higher are still much better — at 3.8 percent — than those with only a high school diploma, which was 7.4 percent in May. Clearly, unemployability is a huge problem globally since candidates are not work-place ready.

So what does this mean?

A new recruit is considered work-place ready, if he/she can contribute to the company’s growth by efficiently handling the day-to-day tasks. However, the first-day-first-hour ready workforce is a myth. Typically, IT companies allocate 3-4 months of training at an average cost of Rs. 200,000 per employee to make the freshly-inducted employee productive.
In non-technical domains, the training varies between 2-4 weeks. Is it any wonder that companies these days are considering pre-hire training as part of the standard induction process?

Pre-employment programs are generally short courses, comprising skill sets identified by industry as essential for entry into the industry or occupation. It could be soft skills such as interpersonal skills, collaborating with stakeholders in multiple functions and geographies, cross-cultural interactions, multi-tasking, project management and cognitive skills.

While earlier, individuals aspiring to hone or upgrade skills opted for pre-hire training, nowadays, corporates are beginning to include pre-hire training as part of the recruitment process.

Pre-hire training: An investment or cost

Consider this: For every employee who falls short of expectations, an organization will have to bear costs equivalent to two and a half times of an individual’s salary. An unproductive new hire may weigh on the company’s efficiency rate and costs as the company ends up spending a lot on training and mentoring.

Training costs make up nearly 2-3 per cent of total staffing budget. Organizations realize that training is not a luxury but a necessity. Besides streamlining existing training programs for new hires to include mobile training and self-paced learning programs, what if there is a more time-tested way to harness new talent.

Pre-hire training enables you to do just this. Small and medium-sized businesses especially in non-IT related sectors find it easier to hire and do their own training. Starting on a blank slate allows a company to instruct the employee more easily about the company’s protocols and processes. It is easier to estimate training time to bring the recruit to speed.

Even though pre-hire training may be more expensive on a per employee basis the company will save a lot more in the longer run. Companies can train employees in skillsets relevant to their industry. A pre-hire training program can be the gateway to an organization’s growth if the industry works with the academia to mobilize and train resources in relevant skill sets. Through pre-hire training selected candidates can be trained on IT skills, practical use of machines, project management, communications and team work practices. They can be given practical knowledge and significant on-the-job training to bring their skill levels on par with regular employees.

Developing skilled workers enhances their efficiency and flexibility; skills bottlenecks are reduced and skilled workers are able to contribute to the company’s growth and help in economy building. Educational institutions are starting to give vocational training its due especially in a gloomy job market where the IT, BFSI and retail sectors are not hiring at the fast clip they normally would. While the debate is still on whether it should be the corporate sector or the academia that takes on the onus of pre-hire training, it cannot be contested anymore that employable skills are a necessity for graduates and post graduates in a hyper competitive economy.

  • OP Dayani

    98% of the institutions offering education do not get the students equiped for industry.

  • why this problem is not there in Govt. Why only pvt companies are crying that the education system is not Good. Still why do these companies fix miinimum criteria as per college/university evaluation rather than delinking jobs from formal certificates ?. Do they hire an honest fellow or a smart candidate ? What is the meaning of soft Skill? Selling to customers what they do not need through glib talk or being politically correct? The ideals and examples given are like selling a fridge to an Eskimo?how far they are correct in the larger scheme of things like environment and welfare of all? Ha, ha today’s news is that Yahoo is sacking 400 from their Bangalore office,the reason- they donot have soft skills. People with softskills survive at the cost of Honest and upright men/women. The corporate world has become like entertainment industry without any morals and scruples. Chamchagiri and couch casting is termed as softskills. Corporates need to introspect.

  • Ranga,V.C

    I totally favour views expressed. In almost all jobs pre-employment training is benificial.
    Many Engineering Colleges do provide theoritical frame. But industry needs skills. Even BEds cruned out from Colleges of Education do lack skills. Internship and attachment to industries do sharpen skills

  • Educating the Educator

    Answer to this is very simple. Keep the mainstream education in synch with mature industry practices. For any evolving or specific technology, industry or employer has to provide the training.Employee can not invest time and money to learn 100 things to realize that employer uses 2-3 or maximum six of those skills.

  • Sriprakash Bhattacharya

    I think that pre-employment is very useful before putting the employee top his actual assignment Truly speaking it has been observed that what an employee is required to know during employment is not taught in the colleges and what he has been taught in the colleges, is not required or does not come to use while in employment.Under the circumstances, a big gap or void remains which needs to be bridged. In India there are only a handful institutions which help in bridging such gap or void. Simultaneously, it is also true that every thing can not be taught through imparting training. Certain things can only be learn while the employee is on job. Keeping in view of this a training module need to be designed very carefully, systematically, diligently and demand basis. Such training will not go to the ash.

  • venkatramu38

    This subject needs a lot of preliminary assessments to ensure that the right type of training is made available to those who are needed for the jobs.It is a demand-supply phenomenon. It should so happen that the trained ones are straightaway absorbed and ensured that they do not become surplus. A proper assessment made of the future requirements and accordingly, the training programme charted out and a flow chart mechanism should take charge of the situation that there are no surplus trained people waiting for their placements, thus a career is assured for each and every aspirant to ensure that the system works effiiently.

  • G V S Sastry

    Training is always useful to employees as well as to the organisation. It will always fetch to the company though some employers feel it is waste of resources.

  • reghu varma p.k

    Pre hire training is really inevitable. As pointed out, the educational institutions now a days give more thrust on passing exams rather than focusing on real knowledge and skill development. When this is said, it is to be noted hat soft skills may be more important over long time than occupational skills. Soft skills are behavioral competencies of inter personal skills which include proficiencies such as public speaking, group discussions, inter personal communication and personality development skills. Moral uprightness and exposure to real situations in the type of industry/ business’ service too is necessary. The focus shall be to develop an attitude of service with dedication, discipline and determination.

  • Aditya Kulkarni

    Agree with the points of view. However, it is high time to remove the corruption from the training industry. I understand the going rate is about 40 to 50 % of the training fees! A director of Espoir Technologies, whose professional interview simulator is an innovation that ensure professional interview training and ingraining, told me that 70% of engineering and MBA colleges asked for bribes even after getting convinced that this innovation is the only solution for their students’ interview , viva-voce and English communication related short-comings. Fekus survive in training industry as the victims don’t know that they are being victimized.

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