India has one of the youngest populations in the world today. And yet, we suffer a 130 million skill deficit in the labour market. Only 40% of employers are able to meet their talent needs and the cost of talent is forever rising. How can India leverage its demographics and take the lead in creating an integrated workforce solution that maximises the growth of the economy?
The answer lies in apprenticeships, an age-old practice that was prevalent in India from ancient times. While the Apprenticeship Act was set up in 1961, it remained stagnant for 14 years between 2000 and 2014 because of lack of knowledge around the program and its benefits. In the recent years, however, apprenticeship programs have impacted various sectors like railway, apparel, retail, BFSI, aerospace, beauty and wellness, IT, and healthcare, among many others. Organisations have been working towards leveraging technology to create human intelligence on par with AI.
Driving the narrative of apprenticeships in India from the front lines is NETAP (National Employability Through Apprenticeship Programs), India’s fastest growing blended learning, degree-linked apprenticeship program. Senior Vice President and Business Head of NETAP, Sumit Kumar, speaks to Samira Pillai on how NETAP is enabling organisations overcome labour market challenges by enhancing youth employability and livelihood and spreading awareness on the benefits of the Apprenticeship Program.
Since the beginning of your time with NETAP seven years ago, what are some of the changes that you have seen in the attitudes towards apprenticeship programs, the adoption, and even the success of the whole program?
There is a stark difference between when we started versus where we stand today. Earlier people didn’t know about apprenticeships. They had some idea, a lot of preconceived notions, and there were a lot of push backs. But one thing that hasn’t changed is the intent to know how it can benefit people as an organisation. What I see today with a gap of six years, that there has been an increase in the adoption – there is a wave where people are more aware and receptive as well. I’ve also seen that in a lot of service sectors, they are now coming forward and looking at apprenticeship as a way to create talent. The challenge is in whether they understand it or not.
Why do you feel the gap still exists?
There is a lack of understanding about the system and its implementation. There are questions around how to go about doing it. We recently completed a survey just to understand how apprenticeship is being perceived. Apart from lack of awareness and understanding related to its implementation, there is also a scare amongst employers that if they get into the system that, they come under a scanner by authorities. What organisations want is a free hand in executing apprenticeship programs.
The work that you’re doing with NETAP involves many different stakeholders apart from the organisation – there is also the government, educational institutes and the apprentices themselves. What has been your communication strategy for each?
I think what we have to look at apprenticeship in multiple contexts. So let’s look at the context of India – how does apprenticeships impact the economy? We need to realise that in India, the economy is driven by consumption. Consumption is driven by purchasing power of people. With apprenticeships, if we can help create more livelihood opportunities, improve purchasing power, we are essentially putting money back into rotation. We are directly impacting socio-economic growth.
We are also looking to reform and even transform the labour market. Labour market transformation can happen between rural to urban, from education to employment, between informal to formal employment and even between subsistence wages to minimum wages.
Apprenticeships also address the question of how we can enhance the employability of the youth. The focus has always been on the rise of education and increasing the number of enrolments in the country. But it has come at the cost of quality. Through apprenticeships, can we achieve both the quality and the quantity? Can we improve gross enrolment ratio of the country as well as the employability quotient? These are the merits from the country point of view.
If you look at it from the industry point of view; we are facing a severe skill deficit. One of the toughest challenges organisations face in hiring is the lack of skill amongst potential employees. It’s a part of the soaring hiring costs. Then there is the problem of productivity and attrition rates. Apprenticeships can create a people supply chain, which maintains the productivity levels of the workforce. The aim is to help organisations repair, prepare and upgrade their workforce. Now, from the individual point of view, career acceleration and faster growth is enabled by apprenticeships because it is the most structured form of training. For academics, we are looking at how we can make education meaningful by getting by blending apprenticeship with higher education. In essence, we are trying to create an ecosystem which is conducive for apprenticeships. The message for each stakeholder is very different.
You have worked on several reports over the years through a longitudinal study approach – The Stipend Primer, the Apprenticeship Outlook Report, the ROI on Apprenticeships document. How have these documents helped you communicate your message and how have they been received?
All the reports have been very well received. We have done three of the Apprenticeship Outlook reports with the latest one coming up with a projection for 2021. While there has been a dip in Q1 and Q2 of last year, because of COVID, there has been an overall a positive outlook towards apprenticeship programs. We have seen how the apprenticeship system has groomed and reformed those in it, over the years. People who were being paid a slave wage progressed to minimum wage and are now being benchmarked as an educated professional. These reports also come up with certain trends. They define the sectors which come forward in adopting the apprenticeship programs. They are a real eye opener for everyone. They tell us about the myths that still exist and how we can overcome them. They definitely help us influence the system and make us receptive to a larger audience.
Do these reports help in addressing the challenges associated with the adoption of apprenticeship programs?
We are doing a lot of work in the area of marketing apprenticeships and highlighting why organisations should do apprenticeships. What is the ROI they get from doing an apprenticeship? What are the long term returns they can expect if they adopt apprenticeship programs? We are able to prove that in math, rather than just as theories. Also when one organisation take this up, others are more likely to follow suit, even in exploratory form. Once they get into it, they realise how it benefits them in the long run. Word of mouth of some of the success stories has made apprenticeship seem positive for many organisations and we are happy to have played a role in making people aware of apprenticeships and how it can benefit them.
Do you recall any conversation that has stayed with you in your mind with any of the stakeholders on this subject when you’ve tried to speak about apprenticeships as a solution?
There are plenty and one comes from a very unconventional sector – the BFSI and NBFC sector. It is the first time this sector was open to having apprenticeships in their job roles – it has never been done before. I happened to do a meeting with the HR person of the organisation, who herself had started her journey as an apprentice, managed through us. She had been absorbed into the company in a full-time capacity because of the good work that she did. In another case we had an apprentice who came from a humble background in Karnataka, and he got a job with India’s leading hospitality chain. Doing an apprenticeship had transformed his life – something he would never have imagined. The impact of our work has been on more than 2 lakh apprentices since we started. Even the organisations we have worked with are getting benefited from it. The fact that organisations have remained with us, with the intent to make it better with every passing day, gives us a lot of a sense of pride. We have a long way to go though, because India has the potential for 15 million apprentices. There has to be an active participation of the industry in terms of skilling efforts, and from the academia as well. If we want to make a real impact there has to be a partnership amongst all stakeholders and there needs to be more flexible and better regulations.
This brings me perfectly into my next question – who should step forward first?
The first step has already been taken and the government is responsible for the role that they have played. The announcement of the National Education Policy (NEP) 2020 was a great move. In the recent budget too, the finance minister mentioned that we are going to further reform the Apprentices Act (1961).
In fact, in 1937, when Mahatma Gandhi spoke about education in India, he said that students should be provided with an education that not only allows them to earn more but also builds their character. His principle, Nai Talim, was based on the tenet that knowledge and work are not separate. It introduced a holistic approach to learning that integrates intellectual, spiritual, social and physical learning and prepared them for a life in the real world.
The government’s initiative to promote skill development and vocational training is based on the tenets of Nai Talim principle. In that sense, I think the government has always been very receptive. Now, we need to have far more engagement and participation from the industry. SMEs have not engaged with apprentices yet and they are the ones who create jobs. Apprenticeship programs can make a huge impact to the productivity for SMEs. However, it is currently very unstructured and informal. Next, we definitely need engagement from the academia because right now apprenticeship has been lax in higher education. With the announcement of the new policies and guidelines on degree apprenticeships, we expect that they should also come forward and make a difference.
What are some of the changes that you feel the system needs for apprenticeships to succeed in India? The most critical thing would be to link the act to higher education. That has to be the starting point. It would need to introduce and define universities as third party in the implementation of apprenticeship programs. Doing this chalks out the roles and responsibilities of university as it has been done for apprentices and employers. Further, it is crucial to allow a tripartite arrangement between university, apprentices and employer in executing degree apprenticeships. This will add more responsibilities for the TPA to execute apprenticeships for the employers. It will also add the convenience factor that employers look for and will also encourage MSMEs to come forward in engaging apprenticeships. Implementing these changes could completely change the landscape of apprenticeships in India.
The recent Apprenticeship Dialogue series, where you have been speaking to a lot of people from organisation who have adopted apprenticeship programs, has put the spotlight on apprenticeships as a smart solution to talent challenges. Please share some of the observations or curveballs these conversations have brought forth.
All of the organisations we spoke to have shared the realisation that apprenticeships have done wonders for their organisation in terms of talent creation. However, there are still several challenges with execution at the ground level, which can be easily rectified. The hiring process for apprentices itself is challenging. There is no specialised or dedicated way to go about doing it. Further, many organisations doing it for the first time don’t have a benchmark to compare. Somewhere the conversation has triggered that thought process and that will only improve their own apprenticeship systems that they are running in their organisations.
The pandemic forced organisations to rethink their hiring and talent building strategy. There would have been changes in the demand for apprentices too – sector wise, numbers. What were the key shifts and what were your thoughts on those shifts?
Organisations that had adopted apprenticeships earlier were able to sustain because they had the mechanism to create talent. So while their people migrated back during the onset of the pandemic, they were able to resort to local talent to keep the business going.
Organisations are far more receptive to apprenticeships now because it helps them to create a talent pipeline or a supply chain. It allows them to create talent strategies through apprenticeships and future proof their talent needs. During the pandemic people had no option but to use apprenticeships and while it may have been accidental, they have been able to see the benefits.
To be honest, apprenticeships is not just for larger organisations. Even small organisations can implement the program. They don’t do it only because of the compliances needed. The beauty is that apprenticeship programs have also created entrepreneurs. 1% of our apprentices have gone on to become entrepreneurs because this program sharpens their skills immensely.
What is your personal passion for talent building, talent creation and organisational productivity? What makes this space fulfilling for you?
To bring the change the country needs! The fact is that the skill problem is only growing every passing day. We are working towards educating organisations and helping them adopt and execute apprenticeships. We have touched more than 2 lakh lives so far, and it is heartening to see the success stories of both apprentices and organisations. Our aim is to make education more relevant – every parent wants their child to have a quality education and go on to get the desired returns from that education by getting a job. But many times affordability and accessibility becomes a challenge for them. Apprenticeships can really change that. When you build a career through apprenticeships you are more sought after – because you are not just qualified but you are also skilled.
What is your dream vision for the apprenticeship program in specific and talent development in the country in general?
My aspiration is that India should have 20 million apprentices. We should have more organisations partnering with academics to make educations more relevant through degree apprenticeships for every community.
Want to increase your company’s productivity and scale new heights with apprenticeship programs, visit NETAP to know how. To learn how apprenticeship is the best investment, download ROI on Apprenticeship!
