Home Time to encash it: the Skills opportunity

Time to encash it: the Skills opportunity

by Revathi Kasturi
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The recently released census data on age-wise distribution of the population shows that India now has a rare demographic and economic opportunity. The population increased by 17.7% from 102. 86 crore to 121.06 crore during 2001-2011.But the increase in the 0-9 age group was only 0.4 per cent.  The good news is that the number of people in the 15-59 age group has increased by about 25%. This group, which is the working age category, also forms 60% of the country’s population. It means that the country has many more people who can work and support those in the children and old age category.

This is a classic case of demographic dividend which countries usually get only once in their history and sometimes only for a short period. Developed countries once gained from it but now have a larger older population and small young and child populations. China took great advantage of the dividend in the last few decades, but the situation is now turning unfavourable with the birth rate and the number of working people declining and old age population increasing. To make the best use of its opportunity, India should expedite economic growth and provide more employment to the people who are in the working age group. This also means providing more educational facilities and implementing skill development plans for those who need it. A good part of those in the working age category, even those who are considered to be qualified, need such programmes. Industry and services will have to provide the greatest share of these jobs because the employment potential in agriculture is limited. But a good part of the growth in population is in rural areas, and so urbanisation and investment in industry and infrastructure will need to be boosted. It is necessary to give productive jobs to those who need them.

This is a classic case of demographic dividend which countries usually get only once in their history and sometimes only for a short period.

The change in age-wise and geographical distribution of population will lead to social and other changes too. We can expect an increased migration of people from the northern states, looking for employment. Inability to provide employment to people who need it can lead to discontent and disaffection. The opportunity which has now come should not be wasted.

“Focusing on skilling our people will create several industries and professions where India will become the global talent pool. Our nurses, teachers, healthcare workers for elderly, construction workers, chefs, hospitality experts have great potential global opportunities if we skill people with quality standards and in sufficient numbers,” Mr Ramadorai, NSDA (National Skill Development Agency) Chairman, said at a recent event in Pune.

What are the challenges so far? Let us hear some voices.

Mr Pallam Raju, the former Union HRD Minister, while inaugurating a skill development workshop said that a lot of issues confronting the sector need to be addressed. They range from demand supply mismatch and poor quality of training to lack of infrastructure, shortage of quality trainers, relevance of skills and lack of standardisation. Absence of a labour market information system, of clarity on industry skill requirement and low awareness of existing courses, besides perceived lack of dignity, are some of the fronts that have to be addressed, he said. Raju underlined improving the accreditation and certification systems and establishing an institutional mechanism for providing access to information on skill inventory on real time basis. Noting that seven crore more people have to be imparted skills in the next five years, he said that there is a need for concerted action with improvement in the curriculum for skill development.

Parents would rather send their children to do a bachelor’s in arts than for vocational education and building skills.

CEO of National Skill Development Corporation Dilip Chenoy said that though the skilling sector is growing at the rate of 33% annually, “we have to increase it to 133% to 150% if we want to take it to 500 million skilled hands by 2022”.

One of the primary impediments to skills training is the question of who pays for it. While firms are not inclined to pay a placement fee for appropriately skilled persons, in many cases trainees are not excited by the remuneration offered. In others, people do not even take up the jobs offered after a stint of free training.

A typical skill development module would cost Rs.8,000-9,000 for a 200-hour course. While in many cases, students are expected to pay the fee, in other cases companies agree to pay part of it. Industry says it is important that a student pays for the course, as he/she has to be serious about the training.

In addition, the negative perception on skill training also plays a part. “Parents would rather send their children to do a bachelor’s in arts than for vocational education and building skills. So, the problem is not only of social acceptance, but also lack of interest,” said Shankar S Mantha, Chairman, All India Council for Technical Education (AICTE).

The skill development cycle:

Human capital development involves tapping the potential of youth, and providing them with the knowledge, skills and winning attitude to access jobs and build a bright future for themselves. With the demographic dividend opportunity in India, now is the time we have to focus on this.

Let us look at the whole cycle.

We identify the youth, assess their skills and potential, understand their interests and aspirations, counsel them on the opportunities in the market and enroll them into a suitable skill programme.

We then deliver quality training so that the learning outcomes are aligned to the skills required for the job. This is challenging because a fixed duration one-size-fits-all course may not yield the desired result. A one month or even a 3 or 6 month programme is unable at times to assist and prepare the youth who have come out of a broken formal education system.

We then do an assessment and deliver an industry-recognised (specific Sector Skills Council (SSC)) led certificate. This certificate should be a green card to access jobs.

Thereafter the youth joins the work force.

Mismatches and leakages take place in all the segments of this process. These are the challenges we face in the skills sector.

A very tight coupling is often not possible between all the segments. For example, even though a youth is skilled, passes the assessment and gets a job, he may drop out because he doesn’t find the salary adequate or finds the job too demanding.

So if you define success by one yardstick i.e. placed students, this would not recognise the countless other factors that determine the youth’s ability to hold onto the job.

On a different track, let us look at the much maligned but thriving coaching industry or the exam preparation market. Look at the JEE preparation market. Three lakh students write the test every year. Say 3000 are selected, leading to a 1% success ratio. Of the institutes who prepare for the JEE, some may get zero selections, and some 2 or 3. Even the famous Kota institutions get 20-30 selected out of 1000’s. So the success ratio for these institutes is only 1%! As against this, in the skills business the set target is minimum 70% placement! By setting such an unrealistic target, are we are setting ourselves up for failure?

Or look at the formal education market. When a child enters school, the measure of the schools’ success is not how many of the students have got into IIT or IAS. We are happy if the pass percentage is high. We look at the number of students who received distinction, etc. Outcomes that are fairly directly linked to the learning imparted in the school.

So can we hold the skills programme accountable for ensuring 70% placement? Or is it high time that this skill building is decoupled from placement? A good ‘gate’ is the assessment post-training by the industry-led SSC. The training institutes need to turn out a qualified and certified skilled workforce. The SSCs in turn need to have a sound labour market information system in place to understand the demand-supply gap with respect to jobs at various levels.

Even though a youth is skilled, passes the assessment and gets a job, he may drop out because he doesn’t find the salary adequate or finds the job very demanding.

So who are the stakeholders & what then are the solutions? There is a role for all the stakeholders.

The government has a key role to play.

On a policy level, the Ministry of Human Resource Development (MHRD) has launched a National Vocational Education Qualification Framework (NVEQF). This establishes equivalence between the formal education system and the skills training certifications. For example, it provides mobility for youth to acquire credits through skills training and work experience on the job to get a bachelor’s degree. This is a great step forward and the implementation has just started. Vocational skills courses will now be rolled out to students in schools from 9th class onwards and through undergraduate education. Students will get credits for it too. This policy, if implemented, will yield results in a few years’ time.

The government has yet to align all its skill missions and initiatives. This is begging for attention. Turf wars seem to be the only reason holding it back.

In most countries, skilling the bottom of the pyramid is a government-funded initiative. In several countries, industries take on apprentices and are subsidised or compensated by the government. This is happening in India to a limited extent. This needs to now include certifications which are calibrated and defined by the industry.

Industry has a key role to play.

Salaries, especially in entry-level jobs in services as well as manufacturing, have remained stagnant. While nominal wages have increased, real wages have not. This makes it difficult to attract and retain staff. Industry has to focus on improving productivity and increasing minimum wages, otherwise this situation will remain as it is. Sectors like infrastructure and construction have not made adequate investments in technology. Perhaps that is the only way to improve productivity.

India has been witnessing jobless growth for the past few years. This poses a real challenge. It means that the positions we are filling are largely replacements for those who have left. In the BPO segment, this is popularly described as a revolving-door syndrome where you have associates exiting and entering all the time. We have to identify sectors and industries where net job additions are happening and support skill building initiatives for them. We need to encourage growth in employment generating sectors.

In high skill areas, rather than bemoaning the absence of experienced skilled people, industry would be better off by rolling out an apprentice or internship scheme.

And finally industry has to recognise that many entry-level jobs will not be aspirational. Funding and supporting the youth to undertake a continuing education plan would be the way forward.


The Skills Development Centres & Training partners have a key role.

The Skills Development Centres have a special role to play in translating the vision of the Government and the dreams of the youth into reality. They have to bridge the gap between the formal education system and industry. They have to make ongoing investments in pedagogy, curriculum content and delivery methods to ensure high quality. Learning outcomes must be defined. They must invest in and build scalable engines to cater to the huge numbers.

The youth themselves have a key role to play.

Youth cannot be bystanders and critics. They have to define and create their career paths. We have seen many youngsters who take up jobs not directly related to their formal education doing very well, whilst some others choose to remain unemployed. Today, with the abundance of continuing education programs, it is possible for youth to earn and learn at the same time. This is a sound time-tested approach. Youth need to be pragmatic and rooted in realities.

Anecdotal success stories abound, but have we fixed the model?

There are numerous success stories to be shared, of young girls and boys who have gained skills and confidence and taken up jobs. They are now the primary bread winners in their families. Some youth undergo huge positive transformation through the training program. Not only does it help them get a job, but it also prepares them for life itself.

Every training partner has many such stories to share. But we are looking beyond anecdotal evidence to fix the system itself and make it sustainable.

Game changer in the skills landscape?

On 15thAugust 2013, the Prime Minister launched a Rs.1000 crore STAR (Standard Training Assessment & Reward) initiative to get the skills agenda rolling.

This scheme marked a significant departure from earlier schemes and could be a game changer in the skills landscape. Huge expectations have been built up in India. The world is watching us too.

Very simply, the scheme envisages skills training in line with job roles defined by the industry. Trained youth will also undergo a certification process, again by industry. Those who pass will be eligible forRs 10000. This amount will cover training and certification costs, and in some cases a cash award too.

Today, with the abundance of continuing education programs, it is possible for youth to earn and learn at the same time.

By linking payouts to certifications, there is an emphasis on outcomes. No stakeholder gets a paisa if the student fails to meet the grade. All the stakeholders are aligned to the learning outcome. The student will get a certificate from the industry body if he is job ready. The training provider gets paid for only those students who meet the exit gate.

Of course to meet its objectives, assessments have to be fair and transparent. The SSCs have to live up to their responsibility, ensure assessments are proctored, and maintain benchmarks and standards on an ongoing basis.

This ambitious program is a huge subsidy for the industry. The industry has to embrace the process to skill and up-skill the existing workforce and work out a mechanism to give skill premiums. This will make the scheme sustainable in the years to come.

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