Who Pays for Training 500 Million People?

03 Jan. 2013 | Comments (0)

The views expressed by this author do not necessarily reflect the viewpoints of The Conference Board.

The deplorable state of skills in the Indian labor force is well known. The de facto accepted target by government and industry alike is that India has to train 500 million people over the next 10 years to maintain a healthy 9 to 10 percent growth. Herein lies both the opportunity and the challenge, more so, the challenge. Eighty percent of new workforce entrants have no opportunity for skill training, and the existing training capacity is only 3.1 million per annum (compared with the 12.8 million entrants joining the workforce). The demand supply mismatch makes it amply clear that skill development will be a challenge on multiple fronts to sustain high growth.

In spite of the obvious demand for skilled workers, there is an inherent stigma with vocational training for most people. As Anubhav Singh, banker, social observer, and philosopher, put it succinctly, "In a country where education is undertaken for the sake of education, or for 'class upgradation,' people continue to opt for degrees that do not necessarily lead to jobs."

Despite this stigma, the reality is that the country faces quite a tough challenge in the sphere of vocational education over the next five years. About 70 million more people have to be trained as the country aims at increasing the percentage of workforce with formal skills through vocational education and coaching from 12 to 25 percent at the end of the Twelfth Five Year Plan. The government is recognizing the need to bring changes to the existing education system and is also planning to introduce mechanisms that allow for structured movement between vocational and academic studies.

However, these changes are yet to be incorporated. Companies are struggling to find quality talent for entry-level positions due to the fact that vocational training is neither popular nor seen to be offering good job options. This skills gap provides a window of opportunity for private players in the coaching industry. In this journey, private players will have to identify early on who their real customer is (employer or candidate), how their business model can get the quality-cost-scale balance right, and most importantly, who is going to pay for the training programs. This journey is a marathon where only those with the muscle to sustain in the game long enough will stand to see the fruits of their efforts.

According to the industry, training and skill development is critical for providing decent employment opportunities among the growing youth population. Companies are the victims of the talent scarcity, as well as the culprit, and thus it becomes all the more important that they come forward and be involved in consultation to frame the curriculum. Creating an employable workforce calls for many measures that need to be implemented simultaneously, such as increasing access and quality at ITIs and other vocational institutes, education reforms, and so on.  

The lack of skilled workforce is not a problem that can be tackled by the government alone. Given the state of affairs and the government’s intent to increase the percentage of skilled workforce, it makes all the more sense for India Inc. to partner in this initiative and help build a skilled workforce. A skilled workforce is core to sustainable competitive advantage.

We invite you to share your thoughts as to who should bear the cost of training the unskilled workforce.

 

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  • About the Author: Ester Martinez

    Ester Martinez Ester holds a Postgraduate degree in Human Resources Management from EADA (Spain) and a Master’s Degree in Management from Indian School of Business (ISB), Hyderabad. With more than 14 years of …

    Full Bio | More from Ester Martinez

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