Huge gap between skill set of people entering labour market and what cos want: Experts

The distance between schools and the labour market is getting bigger, experts said at the India Economic Summit

With an estimated million entering the labour market each month, job creation is arguably the biggest challenge before the government. But there is a huge gap between the skill set of individuals entering the job market and those desired by companies. 

Various experts argued, at the India Economic Summit, jointly organised by Confederation of Indian Industry and the World Economic Forum, that employability is a problem. 

“We have very little clarity about what types of skills are needed said Manish Sisodia, deputy chief minister of Delhi. “Our view when it comes to skilling is very limited. We think of it in terms of carpenters and welders. We need to clearly spell out the vision for skilling” he added.

Sergio Picarelli of the Adecco Group agreed, saying that “the distance between schools and labour market is getting bigger”. These concerns were echoed by Akshay Kothari, managing director, Linkedin India, who said that “college students are getting a degree but not jobs”.

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The focus should thus be on ensuring that individuals are endowed with the right kind of skills which need to be regularly updated. “Much of India’s competitiveness today is based on low-cost labour. But labour costs will rise. Thus flexibility is important,” said Picarelli, adding, “The focus should thus be on skilling. In Europe, companies spend a percentage of an employee's salary on skilling.” 

But the question is where will the jobs come from? With manufacturing becoming increasingly labour intensive, which sectors will drive job creation in India?

Shikha Sharma, managing director and CEO, Axis Bank, contends that while sectors like banking are likely to become less employment intensive, there is tremendous opportunity in others like information technology (IT), business process outsourcing (BPO) and tourism, especially health tourism

“The IT and BPO sector could become a big source of jobs in the coming years, especially if India becomes a hub of data analysis,” she said.

Ananth Narayanan of Myntra said that technology is an enabler for job creation. Elaborating on this, he said that the e-commerce sector practically didn't exist five-six years ago, but today it has transformed the retail sector in India. 

“Myntra alone employs about 2,000 people in the technology space, but about 8,000 people in service delivery segment. Similarly Flipkart and Amazon have also created many jobs. They have also given small enterprises a platform to reach out to new consumers. Myntra has a private fashion label which has also created many jobs in textiles,” he said. Thus it is possible that the second order effects on job creation are likely to be immense.