As we usher in industry 4.0, technological advancements are rapidly changing the face of the work, worker and workplace. The paradigm shifts in the business world are widening the skill gap and causing a talent crunch. Several reports and research studies underscore the fact that technology, especially automation and AI, will render several million existing jobs redundant while adding a whole new host of employment opportunities and changing the face of the jobs that remain, making massive skilling, upskilling and reskilling of the workforce imperative.
Fuelling the Future Workforce
India will soon reach the phase where its working population will far exceed its dependent population (the demographic window) and to reap the full benefits of this demographic dividend and an increasingly young population, India needs to fully equip its current and future workforce with the right skills and agility. If this is not done with the requisite urgency, the demographic dividend will turn into a liability and a lost opportunity for fuelling India’s economic growth and development. According to Accenture research, the cost of staggering and inaction in addressing the skill crisis could cost India nearly 2.3% of the GDP (USD 1.9 billion) with a high risk of unemployment and deepened income equality.
Organizations and HR are developing a wide array of initiatives and programmes to undertake the mammoth task of reskilling and upskilling their workforce and make their workforce agile and future-ready. However, it is equally important and critical to ensuring that the graduates and youth who will enter the workforce in the future too have the right technical skills, learning agility and digital dexterity to thrive in industry 4.0.
The current education and learning systems may not be able to equip the students and youth for the coming skill revolution across sectors and industries. Experts believe that even graduates from Ivy League and other top-notch colleges/ institutions will find their skills redundant in the next 5-10 years. Further, another Accenture Report states that 25% of India’s graduates are not employable in the IT and ITES sectors.
Apprenticeship: The Way Forward
There is talk of revamping the curriculum of our educational system and providing skill development programs in schools and colleges to train the future workforce. Given that change will be the only constant in the future of work, unless the required skills are upgraded continuously, the knowledge we impart to the youth/ students with today will become redundant in a few years. We can instead pass on experiential and hands-on learning along the lines of what is currently relevant. What better way to achieve this than an apprenticeship!
Education provides the future workforce with the necessary theoretical knowledge and some hands-on exposure. However, apprenticeship, a time-tested method to develop a skilled labour force, will enable the students to engage in industry-oriented knowledge building and learn the practical application of theoretical concepts through experiential and on-the-job learning.
Organizations can build a highly specialized future workforce with a pipeline of workers/ employees with the right kind of skills customized to their needs. The apprentices understand the workplace culture and already know how it is to work in the organization and what is expected of them. This reduces training and orientation costs, saving time, money and other resources. Organizations that invest the time and resources on apprentices will enjoy higher worker loyalty, engagement, productivity, and retention.
Government Initiatives to boost apprenticeship in the country
The Apprentices Act of 1961, which mandates establishments in all sectors (including manufacturing and services) with over 40 employees to engage apprentices (school dropouts aged 14 years or above to graduates) to the tune of 2.5-10% of the workforce every year, was amended for the fourth time in 2019 to make the regulatory framework more conducive to scale up apprenticeship in the country and seeks to create more public-private partnerships and private sector participation. For instance, ground work is underway to upgrade a select number of ITIs across the country into Centres of Excellence through public-private partnership where industry partners would lead the Institutes and their development initiatives.
The latest Amendment increases the upper limit for the engagement of apprentices to 15% and reduces the minimum organization size to 30 employees. It also allows the organization to outsource the basic theoretical training part to third parties to reduce the costs for the organization in employing trainers and training infrastructure. An apprenticeship can now be offered to non-engineering and non-technical graduates. Recently, the Skill Development Ministry urged PSUs to significantly increase the number of apprentices in the services sector as the sector is lagging in comparison to the technical and manufacturing sectors. Organizations engaging apprentices are entitled to a 25% reimbursement on stipend paid and 50% reimbursement on basic training costs.
The Government’s flagship initiatives such as National Skill Development Corporation and the National Apprenticeship Promotion Scheme are gaining traction, but execution level challenges need to be addressed.
84% of China’s organized workforce is formally trained and 70% of the young workers enter the workforce through apprenticeship. India, however, engages only apprentices to the tune of 0.1% of its employed workforce and only 4% of these apprentices receive formal training for organized sector jobs. The rest are being trained for unorganized and informal jobs. This is a massive opportunity lost.
The main causative factor is that apprenticeship programmes in India are traditionally initiated and led by the Government and PSUs, unlike most other countries where the industry sponsors apprenticeship initiatives. PSUs engage a sizeable proportion of apprentices in India. There needs to be more private sector participation in engaging apprentices in the organized sectors.
Apprenticeship programmes do require organizations to make sizeable investments of time and money. However, an effective apprenticeship programme yields high ROI and is a definite win-win for apprentices as well as the organization. Apprenticeship is the way forward in a tightening labour market and widening skill gaps. And corporate entities need to become brand ambassadors of the Government’s flagship initiatives to power the future workforce.