Bridging The Employability Gap

Posted on July 10, 2012 in Business and Economy

By Shajan Samuel:

Self explanatory, nobody need explain the meaning of ‘Demographic Dividend’. India’s trump card during the recent high growth period – the so-called ‘demographic dividend’ was the result of a mistake, and that mistake is about to come back and whistle in our ears. We need our youth to become productive quickly, with more than 93% of jobs being in the unorganized sectors; implying that we need more jobs that require employees to provide manual labour, than mental labour. This Demographic Dividend which comes once in a life time, can very soon morph into a Demographic headache if we fail to skill our youth quickly. India’s sector wise GDP is split 17%, 28%, and 55% in agriculture, industry and services, respectively. The employed workforce is split 52%, 14%, 34%, correspondingly. The disproportionate services GDP contribution is an anomaly in a poorer country like India. The vast majority of service employment in India is in low-level and low-paying industries. The contribution of higher-level industries to the services GDP is driven by the information technology and software sectors which do not employ large numbers of people. We need the likes of states like Uttar Pradesh, Rajasthan and Madhya Pradesh to fire up. These are the states where the demographic explosion is going to come about from but will contribute insignificantly to the GDP. The laggards will have to become the front runners in every sphere, though the challenges are insurmountable.

That’s the good news. In the not-such-great news, finding the right people for all these new jobs may be harder than it appears. On the face of it, there is enough supply to supplement demand. After all, there are 12.8 million new candidates on the job scene every year. But when you delve deeper into their skills and qualifications, you wind up with a large subset of people who are inadequately trained and deficient in several core skills. Clearly, the need of the hour is skills-based training that can boost employability.

Stringent hiring standards in recent years have thrown the employability gap into sharper focus. Today’s employers are looking for candidates with well-developed communication skills, including proficiency in spoken English. While industry knowledge is vital, companies also value employees who can demonstrate adaptability, innovativeness, and the ability to think on one’s feet. Also high on their wish list are candidates with people-friendly skills who can successfully interact with customers and with their own team members.

Unfortunately, many in the current crop of candidates lack these critical skills. They find it hard to cope in a fast-paced environment that puts importance on effective communication and independent thinking.

How do we begin to address this issue? What can we do to ensure that our candidates are job-ready from Day One? The answers lie in one direction: our education & training system.

Traditional colleges are currently not meeting expectations when it comes to delivering quality training. Their textbook approach to education doesn’t provide the practical perspective that students need in order to be workplace ready. The classroom experience in many colleges is stuck in time and based on outdated curricula. When course offerings are changed, it is not based on a dialogue with companies to ensure that the changes are relevant to the business environment.

Perhaps because of this disconnect between degree-based colleges and employment, many of today’s youth don’t pursue higher education. Currently, out of the 15 to16 million students enrolling in colleges every year, barely half a million go on to graduate. A look at the broader population presents an equally grey picture. In 2009, out of the 232 million youth in the 20-34 age group, only 10 million opted to join a college-level program.

Traditional institutions, thus, have their work cut out for them. They need to work harder to improve their programs while showing solid results in employment outcomes.

In the meantime, it is up to the vocational training industry to pick up the slack in the system by supplying what it does best: practical and job-oriented training.

There is a real need for institutes that can accurately assess students’ strengths, develop their core skills in related areas, and then connect them to potential employers. Vocational training can then serve as either a substitute or as a supplement to traditional college education.

Currently, organised vocational training is still evolving in the country. Many institutes that focused solely on technical training in the initial years have tried to branch out into other areas but with limited success. They have largely operated as islands of training that are only weakly linked to the working world, and that has been their problem.

In order to be truly effective, vocational training should always have a finger on the pulse of industry. This requires ongoing interaction with companies to understand their hiring requirements and their candidate wish lists. By processing this input, institutes can gain deep insights into what employers are looking for in the people that they hire. They can then design programs that are truly aligned with industry and workplace needs. When combined with tools such as on-the-job training and e-learning, this will very quickly translate into greater employability and job preparedness for all of their students.

There is no denying that a candidate skills gap is weighing down India’s employment system. Quality vocational training can be part of a quick and nimble response to the problem. Done right, it can help to bridge the gap and bring supply in line with demand in the marketplace.

Inclusive growth can only happen when we uplift more students reeling under the BTL line and give them training leading to employment. The dichotomy between the public and private is pivotal to bringing both scalability and skill to move things at a faster pace. We need speed in execution.

State Governments run various schemes in this direction. One such scheme run by the A.P. Government is the “Employment Guarantee Marketing Mission Scheme” where the Government partners with education agencies to train and place students from BTL Line. The Government reimburses the entire fee including boarding. The programs are for 400 hours predominantly in retail, sales, marketing, customer service etc. The highlight of the Program has been the placement success which is currently clocking at 70%, Companies like Café Coffee day and Macdonald’s in the Hospitality sector, Big Bazar and others in Retail, Hindustan Lever’s in FMCG hire massively. We need many more such state Government led and funded programs. 58% of our graduates suffer from some sort of skill deficiency, and require last mile intervention to make them employable. Companies don’t want to pay for trained man power, and students want to pay for jobs and not for training.

Highest leverage solutions:

– Reforming the Apprentices Act. It is a matter of shame that India only has 2.5 lakh apprentices while Germany has 6 million and Japan has 10 million.
– Need a shared framework between employers and academia; e.g. TNEF, ICP’s
– Making government money available for private delivery. This needs contracting skills. The task can be accomplished through vouchers or by routing social spending like NREGS to skills.
– Vertical mobility. Need NVEQF to create a corridor between certificated, diplomas, associate degrees and degrees.
– Performance Management. Need to create the fear of falling and the hope of rising.