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Luis Miranda

Hope for a Skilled India… Finally!

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I recently attended a round table discussion on skill training in India at the British High Commission in Delhi. S Ramadorai, Chairman of the National Skill Development Agency (NSDA) and the National Skill Development Corporation (NSDC), hosted the discussion along with the UK India Business Council (UKIBC).  I left the British High Commission that evening very content—I am not sure if it was because we had a good discussion or because the beer was nice and cold.

Either way, after a long time I was finally seeing light at the end of the tunnel for skilling of India. Over the past few years, that blasted tunnel kept getting longer and the only people who seemed to have made significant money from skill training in India were consultants and conference organisers. And after many years, I see three critical components falling into place—corporate focus, training vouchers and certifications. Let’s take a look at these factors.

Corporate focus: Most companies in India play lip service to training. Everyone grumbles about the poor quality of skilled labour, but only a handful, like L&T, have invested significantly in skill training. Most companies do not want to bear the cost of training because of high staff turnover and because customers don’t run away due to poor service. Many also complained about the poor quality of third party training institutions.

The bottom line is that most companies were not willing to spend on improving the quality of workers. The new Companies Act recommends a 2 percent (of profit) spend on CSR and one of the approved activities is “employment enhancing vocational skills”. So skill training companies are salivating and hopefully corporate India will now start spending on skilling India.

Samhita Social Ventures, a CSR advisory firm, advocates that companies should spend their CSR budgets on efforts that help their business. And improving the quality of workers is a no-brainer.

Training vouchers: One of the challenges skill training companies face is the low ability or interest of students to pay for it. The tag line of the Centre for Civil Society (CCS) is “fund students, not schools” and CCS pioneered the concept of education vouchers in the country. Through a voucher programme, public funds are used to give citizens the choice to pick their service provider. After a long struggle, CCS recently started India’s first skill voucher pilot programme  together with Babasaheb Ambedkar Research & Training Institute (a part of the Department of Social Justice, Government of Maharashtra), Michael & Susan Dell Foundation and NSDC. This will cover 3,000 scheduled caste students.

The Government of India recently went one step further and announced the STAR (Standard Training Assessment and Reward) scheme with a funding of Rs 1,000 crore. At one time, the government told CCS that it cannot fund vouchers … and then they went on to fund the mother of all skill training voucher schemes, without referring to it as vouchers. I am not complaining since, as “a rose by any other name would smell as sweet”. It is interesting that India is home to two of the largest education voucher programmes in the world—the 25 percent reservation under the RTE, and the STAR programme. Milton Friedman must be celebrating in his grave.

Certification: Until industry or the government makes certification a prerequisite for specific vocations, skill training as an industry will not take off in India. For example, in England, you cannot use an unregistered electrician for any work in your home. As a result nearly all electricians in England are certified and registered. Now, we seem to be moving in that direction with NSDC championing certifications through Sector Skill Councils.

As I stated at that roundtable, the hard work over the years of organisations like NSDC and the PMO’s Skills Mission have finally resulted in the frameworks falling in place.  The time has now come to stop talking and focus on execution. Young India is still waiting.

(Disclosure: I am Chairman of the Board of Advisors of the Centre for Civil Society, Chairman of Manipal City & Guilds and Director of Samhita Social Ventures)

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a.balasubramanian
Luis, bang on dot. India needs desperately these skilling initiatives for making the vast pool of people employable to capitalise on demographic dividend (lest it could become a demographic liability). We all have a responsibility to insist on use of certified labour in personal or corporate capacity . Voucher empowers choice to trainees to demand the best . Taken together corporate adoption, certification /accreditation and vochers ( as part of CSR) sounds great hope at last-a.balasubramanian
keep our fingers crossed ... we tend to score a lot of self goals in this space ...
Luis, Many of the issues you have raised are very important. But skilling is also about the learning experience and his ability to apply the skills into practice. Can we have an ability to crack the training and effectiveness problem. There has to be leapfrog solution to make it exciting for the learners. The other issues - vouchers, certification, CSR, infrastructure, assesment are just outputs. What can we do to transform the input. We have made a start with a product we created for drivers - Pawan Ko Kahin Dekhya kya http://www.youtube.com/watch?v=3fzSSLTKsRM. We would love to show it to you sometime. 10,000 drivers have gone through it..just to give you a perspective of something that is solving the input problem..my e-mail is ram at globalthen dot com
Ram, thanks for the link ... very interesting work you guys do (with humour!) ... will contact you offline ...

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Luis, appreciate your thoughts and you were spot on when you mentioned about the budgets each company has allocated for Learning & Development. But the moot point, who is going to certify and the value it would carry in today's market.
There are many world-class organisations that certify skills. Our JV partner, City & Guilds of London is the largest assessor of skills in the world. Many countries need basic certification to work in these areas and the middle east is also going down this path.
I am a retired employee of L&T Construction division. I have been involved in setting up the Construction Workmen skills Training institute at Chennai.Just to share some learning of my experience: 1) There should be a clear vision of the purpose of the training. 2) It may be worthwhile to have a distinct difference of imparting Knowledge of the trade & the imparting of Skills of the trade. 3) In the scenario of shortage of skilled labor at project sites it be worthwhile to concentrate on imparting skills at project sites. 4) First pre determine the Quality of workmanship & the productivity expected of a workman for executing a particular item of work of the concerned trade in the project. 5) Depute the workmen to do that item repeatedly till the accepted Quality & Productivity is achieved. Then only certify the workman. 6) Issue a trade competency certificate with a provision to periodically take a trade test to validate the trade competency. 7) Make it mandatory for contractors at project sites to employ trained/certified workmen. Start with a small % & slowly increase this.
Kumar, thanks for sharing this. It is a very useful process.
Spot on, Luis! On eof the things that I have been trying to push thro our Industry bodies is for companies to insist on recruiting only trained manpower, even in their vendor/ ancillary base. While it easy to use the Government as a " Punching Bag" the Pvt.Sector should seriously focus on what they can and should do! Ironically recent tenders from Government stipulate use of trained manpower as a pre requisite!! While NSDC and others are focussing on the Supply side it is only the Demand increase that can make these initiatives sustainable. ( my 2 cents is without the support of the chilled beer that you had!)
Vaithee, hopefully we will see companies show more interest in employing skilled/trained labour. What is worrying is hearing that the Sector Skill Councils are not in sync with the corporate world. If that is true, we will continue to have challenges in getting the corporates to recruit trained workers. Maybe the SSCs and corporates should get together over some cold beers!
Deepak Kumar Sharma
This is a great step to create employability and skill training
Let's keep our fingers crossed!
Great article, especially loved this bit: "At one time, the government told CCS that it cannot fund vouchers … and then they went on to fund the mother of all skill training voucher schemes, without referring to it as vouchers." I disagree with your opinion on certification however. India does not need more monopolies & licenses (disguised as 'certifications'). Reputation does a far better job at determining the best service providers (e.g., through word of mouth, or user driven websites like Zomato & TripAdvisor). A focus on certification makes provision of the service expensive, inefficient, and reduces the quality of service by limiting competition.
Srijan, spoken like a true libertarian! In agree that in a perfect world, with perfect information, certification and registration is not needed. They do add to costs and misuse of powers by the powers-that-be. But certain processes are needed to kick-start this business. Due to a lack of dignity of labour in India, many of these jobs are non-aspirational.
While CSR spends are welcome, the acid test would be for corporate houses to train for and within own employment. If the training is not linked to career/pay progression, it would remain another CSR number on the board.
Agree. That is why I believe that lack of support by Corporate India has held back the development of skilled labour. There are two qualities of work and labour - domestic and international. Look at the service levels of Croma - it is terrible. But I keep going back there because there is no alternative. I went to a French sports stores at Hyderabad Airport -Decathlon. The staff there knew their products and were very helpful. This is because the store focused on training. The Ministry of Overseas Indians has also started supporting vocational training to create a pipeline of employable Indians overseas.
Luis, one approach is to have the corporates support this initiative - no question. The other is to have the training organisations themselves support the trainees to ensure that attrition is not as high as it is; which I believe, at times, is higher than 50%. The most interesting initiative that I have come across so far has been Pipal Tree Ventures (www.pipaltreeventures.com) who handhold their trainees for one year after the certification. Not only does this ensure that trainees stay focussed on improving skills and growing in their vocation - but also ensures that dropout rates are controlled. It takes two hands to clap!
Paresh, good point. Pipal Tree does a great job and a few others have also done so. However, if this sector was to scale up significantly this service would have to be priced into the training.
At the sane time in UK/US many people can't afford these electricians/plumbers & do the work themselves. Experience in skill more matters then any certification
People always have that choice. Good training comes at a price. And the electrician in the US/UK has a decent life style, unlike here. The poor dignity of labour in India is a big reason for young Indians not being interested in vocational training.
It is definitely a welcome step if voucher based initiatives get traction. I had seen a couple of vocational training ventures, that received soft funding from NSDC. The NSDC website lists numerous entities that claim to provide vocational training. None of these, in my opinion, have been set-up with vocational training as their goal, but were rather keen to tap into the cheap funding made available by NSDC, another minor scam!
Himanshu, hopefully the stage is now set for a quantum leap in the performance of this sector.
 
 
Luis Miranda
Luis Miranda started investing in India's infrastructure before it became fashionable. He started IDFC Private Equity and was earlier a part of the start-up team of HDFC Bank.
Luis has invested in and has been on the boards of companies like GMR Infrastructure, Delhi International Airport, Gujarat Pipavav Port, Gujarat State Petronet, L&T Infrastructure and Manipal Global Education.
Today he is involved with various non-profits like Centre for Civil Society, SNEHA, Human Rights Watch, Gateway House and Samhita Social Ventures. Luis graduated with an MBA from Chicago Booth.
 
 
 
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September 30, 2013 11:14 am by Luis
keep our fingers crossed ... we tend to score a lot of self goals in this space ...
September 30, 2013 11:09 am by Luis
Ram, thanks for the link ... very interesting work you guys do (with humour!) ... will contact you offline ...
September 25, 2013 11:12 am by a.balasubramanian
Luis, bang on dot. India needs desperately these skilling initiatives for making the vast pool of people employable to capitalise on demographic dividend (lest it could become a demographic liability). We all have a responsibility to insist on use of certified labour in personal or corporate capac...
September 24, 2013 20:24 pm by ram
Luis, Many of the issues you have raised are very important. But skilling is also about the learning experience and his ability to apply the skills into practice. Can we have an ability to crack the training and effectiveness problem. There has to be leapfrog solution to make it exciting for the ...
September 20, 2013 22:15 pm by Luis
Kumar, thanks for sharing this. It is a very useful process.