In the concluding part of the three-part series, we take a look at what makes the skilling business a difficult one to crack
The simple fact about skilling is that it isn’t an easy business. Not only is it a challenge to get prospective candidates into skilling institutes, industry is yet to be fully convinced of the benefits of inducting a skilled worker at higher wages, but across the board there is consensus that getting the various stakeholders together to create an ecosystem is essential.
For the National Skill Development Corporation (NSDC) — the Rs 2,500 crore public-private-partnership tasked with skilling 150 million people by 2022 — this is the difficult reality that it needs to contend with.
“There is no structured data available in India, unlike other countries. No names or addresses, although there are so many projects happening like Aadhaar and other such schemes. There are lot of supply-side people, but who are they and where are they? So it becomes a mammoth task to target them, and to even reach that person becomes very difficult,” says Sanjay Bahl, President of NIIT’s Skill Building Solutions business that will train 7 million people in 10 years under its partnership with NSDC.
Bahl is going for the massive, young population that completes its Standard X and XII exams but subsequently drops out of the formal, mainstream education system. "Your typical gross enrolment ratio says that 87 per cent of the people fall out after (class) X and XII, so there is a huge population (waiting to be tapped),” he explains.
On the back of NIIT’s established brand and delivery systems, Bahl hopes to target low-to-mid income families to drive its skilling business. But for a number of NSDC’s other partners, who neither have the size, scale or brand name of NIIT, it is going to be an uphill battle to get students into classrooms.
“The challenge in India is that the behaviour of paying yourself to get trained is very low. Here the tendency of the urban educated is to pay for higher education. Parents will sell their home to send a child to an IIT; that is the perception of higher education. To monetize vocational skills from an individual is very tough,” says Sanjeev Duggal, CEO and Director of Centum Learning, one of NSDC’s biggest partners.
In the rural market, Duggal explains, the paucity of money means that vocational skill are very low down in the order of priority. Firms, therefore, need to able to work very deeply with government and industry. “So if you’re not a large players and you don’t have a history, then large corporate aren’t going to work with you and large dependence of government projects isn’t going to come to you,” he adds.
Then, there is also the issue of convincing a seemingly reluctant industry to partner in the skilling missions, to convert the need for a skilled workforce into significant demand that can be harnessed.
“This is again a challenge,” says RCM Reddy, managing director and CEO, IL&FS Education and Technology Services, “Since we don’t have a focus on skilling, the value proposition to hire a skilled worker is limited. And this is a problem with small as well as large corporate.”
“The industry has demand but it hasn’t reached a point where the individual will line-up and pay to get skilled. Industry is open, it realizes that it needs good, trained people, but how much it is willing to spend on that is still unclear,” adds Duggal.
A part of India Inc’s lack of enthusiasm is also exhibited by the fact that the sector skills councils — autonomous organisations consisting of industry, labour and the academia, charged with workforce development of particular industry sectors — haven’t yet made much headway in fulfilling core functions such as creating catalogues of skill types, developing sector skill development plans and maintaining skill inventories as well as drafting skill competency standards and qualifications.
Nonetheless, Dilip Chenoy, CEO and Managing Director, NSDC remains optimistic. “The thing is that sector skill councils the world over only work when industry actually comes together and you put your differences behind you. The different parts of the skilling chain — school, college, polytechnic or the ITI level —were talking to different entities at different points of time. So now we have to align everything and get together. It is a new process,” he says.
Yet, with word ‘challenge’ gaining ground at the top of India’s skilling lexicon, clearly there is much to be done than the government spending serious money on a fledging sector. And Chenoy knows as much.
“The problem is sitting down with people, taking them through numbers and telling them that it works," he adds, "It’s a huge challenge. It is not simple".