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Overcoming India’s Skills Challenge

India is uniquely positioned for the next century of economic growth with millions of youth ready to join the workforce and industries competing to hire from this young labor pool.

Overview

India has set aggressive goals of faster, more inclusive and sustainable economic growth to become a high performance nation. But a large part of its working-age population is unable to productively engage with sectors identified to drive the nation’s future growth. The reason? Lack of market-desired skills.

The injection of private capital and entrepreneurship is helping to solve two key chronic deficits faced by the vocational education training (VET) ecosystem: the first associated with poor quality training and physical infrastructure and the second associated with a paucity of job offers.

But to address the ambitious national target of productively engaging 500 million skilled youth by 2022, the training ecosystem needs to address an emerging problem of drop outs – VET-trainees who do not accept job offers or quit jobs due to job profile, job environment or pay scale.

Drawing on the best from the international experience and local best practices, we have developed a five-step action plan customized to the Indian reality. This comprehensive plan aims at eliminating expectations-delivery mismatches across the training value chain and reducing the probability of trainee drop-out. This plan will help create a better environment for trainees to pursue vocational careers and the nation to achieve faster, inclusive and sustainable growth.

DOWNLOAD THE REPORT [PDF, 3 MB]

Key Insights

Skills and knowledge are key drivers of macroeconomic growth and socioeconomic stability. Looking at the socially stable economic performance of economic giants such as Germany and China across business cycles, we see an interesting fact. That is, those equipped with market-relevant vocational and business skills –especially young people—are better placed to take advantage of the knowledge-shifts that are shaping economic growth and to adjust to economic shocks.

About to be home to one-fifth of world’s working-age population, India’s path to becoming a high performance nation is certainly going to be shaped by its ability, at scale, to impart market-relevant business and vocational skills to its youth.

However, while this study reveals that India’s VET system is helping overcome traditional challenges and private initiatives are achieving high placement rates for its trainees, there is still room for improvement when it comes to stages of the skills development value chain that involve human interaction such as guidance and counselling.

A significant gap exists between what trainees expect in the stages of pre-joining counselling and pre-placement support, and what is delivered by the training providers.

The ‘expectations-delivery’ mismatch is leading to high numbers of drop outs— trainees quitting jobs within a month of joining, or those not willing to accept offers made to them. The survey results reveal that a third of the trainees that were offered jobs either did not accept the offer or left within a month of their start date. When asked about reasons for dropping-out, close to half (48%) said they were dissatisfied either with the job profile or the pay offered.

The drop-out phenomenon is not unique and many countries, developed and emerging alike, have faced similar challenges and have deployed innovative strategies that can serve as guide posts for India.

Recommendations

Lessons from the econometric analysis of relevant data were utilized to create a comprehensive action plan that can help overcome the expectations-delivery mismatch and improve the attractiveness of VET. Accenture has defined a five-step action plan for stakeholders of the VET ecosystem, aimed at reducing drop-out rates and creating a career ecosystem that would ensure stable careers for the beneficiaries of VET.

The five-step comprehensive action plan

  1. Step one is to attract prospective candidates at a very young age, preferably between 15 and 18. Deploying best practices from other successful national campaigns such as the Pulse Polio campaign can make vocational education and training a visible national priority. To attract youth, the government and training partners must develop a proper understanding of who and what influences youth to enrol as trainees in VET.

  2. As a second step, training providers should break down course modules into short-duration semesters that alternate with apprenticeship stints at companies. This would not only provide on-the-job experience to trainees but also an opportunity to earn while they learn.

  3. Training modules must go beyond providing job skills alone—they must also develop transferable skills. This third step will especially help individuals from rural, low-income locations who are placed in companies that operate in cities. For example, computer skills, English-speaking skills and civic knowledge could all help enhance trainees’ employability. Moreover, guidance and support from former trainees can go a long way in helping these individuals adjust to a new environment.

  4. The fourth step in the plan recommends paying stipends to trainees during their apprenticeships. This will provide an incentive for them to continue training and set expectations regarding compensation in a trainee’s chosen career.

  5. The fifth and final step focuses on stakeholders. Vocational training must cease providing one-time transactional services and instead support lifelong learning and career growth for trainees. In order to successfully do so, technologies and integrated operations should be used to help training providers streamline the post-training follow-up mechanisms.

For further insights read:

India's path to digitalization: The corporate agenda (The European Business Review)

Five things CEOs must do while going digital (The Economic Times)

The three things that will spread wealth in India (Live Mint)

ABOUT THE RESEARCH

NSDC and Accenture undertook an interim impact assessment exercise to identify course corrections and insights applicable to skilling initiatives at a national and regional level.

This unique research exercise encapsulates all stakeholders in the training value chain—the trainees, the training providers and the employers. We surveyed 2,000 trainees enrolling in vocational courses delivered by 17 NSDC and six S2S providers across India, accounting for a majority of the skilling effort that the two initiatives are supporting. In-depth interviews with these 23 NSDC and S2S training partners were conducted. We also interviewed 20 executives in managerial positions from many large- and medium-size organizations that hire people from the 23 training partners in our study.

This study maps the perceptions of each of these key stakeholders across the five stages of the skills development value chain. This approach has helped validate the performance of the VET system starting with the pre-joining counselling stages, through the actual training implementation and continuing to post-placement support.

About the Institute for High Performance

The Accenture Institute for High Performance develops and publishes practical insights into critical management issues and global economic trends. Its worldwide team of researchers connects with Accenture’s business leaders to demonstrate how organizations become and remain high performers through original, rigorous research and analysis.


Research Team

Raghav Narsalay

Managing director of Innovation Research as well as for India and China Research.

LinkedIn  Mail to Raghav Narsalay. This opens a new window. 



Aarohi Sen

Thought Leadership 
Research
Associate Manager

LinkedIn  Mail to Aarohi Sen. This opens a new window. 



Smriti Mathur

Thought Leadership 
Research Specialist

LinkedIn  Mail to Smriti Mathur. This opens a new window. 



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