Bridging the skill gap - Addressing the education to employment challenge
- By Ms. Sonya Hooja, Co-founder and Director of Imarticus Learning



In a survey conducted by Ernst &Young, only 25% of Indian professionals are considered employable by multinationals and this difficulty of Indian employers to fill job vacancies has increased to 67% in 2012 (compared with 16% in 2011). There is a dire need for professionals with practical understanding and adequate skills to make the required contribution to the industry.

It is widely held that knowledge, skills, and resourcefulness of people are critical to sustain development, economic, and social activity in a knowledge society. Given the current high-paced growth and dynamic investment climate in India, the demand for knowledge workers with high levels of technical and soft skills will only increase. Expansion is taking place across sectors: banking and financial services (BFSI), retail, manufacturing, pharma, SMBs, outsourcing / offshoring companies, service. It is estimated that India would require a workforce of 2.3 million employees in the IT and IT-enabled services sectors by 2010. However, over the past fifteen years, India has produced 1.6 million professionals and faces the uphill task of producing another 0.8 million in the next two years.

Statistics show that in spite of having the largest youth population in the world, India has a glaring shortage of qualified professionals. In any industry, it takes over 3 months to find the right candidate. It is ironical that in a country where a million students graduate every year, they are not able to find suitable employment.

Education has become very general and broad based which is why students may have a good overview but are not specialists. On an average, the curriculum is refreshed only once in every five-ten years but the industry is extremely dynamic. Being caught in the increasingly interconnected and competitive environment, institutions are under pressure to provide more industry-relevant education to increase the employability quotient for the students.

Further, universities and educational institutions have been unable to update their curriculum in tune with the high speed changes taking place in the world of finance and technology. Hence, the students churned out are not equipped to meet the current industry requirements and often companies have to incur additional expenses (time and monetary) to train new hires.  Besides this, the industries also evaluate competencies ranging soft skills, team building, overall attitude, and values. Traditional model of teacher/trainer and content/tool centric education has proven inadequate to meet the growing needs of the millions of jobs being created in the Indian economy. Corporates, on the other hand, were viewed as having to assist with imparting practical knowledge by reinvesting and refocusing their internship & other training programmes to make them more effective. Educational institutes need to focus more on practical education. They must refer to strong, relevant case studies and must have a market-driven curriculum.

Skills training by employers - a burden many say they're unwilling or unable to take on. The current dearth of company-sponsored training programs is also, partly, a hangover from the mass layoffs and hiring freezes that accompanied with the long recession. Many of the "skills gap" complaints are coming from small to medium sized companies that have limited or no human resources expertise. With increased demand for talent, the "skills gap" will only worsen as more and more companies will have to draw from the same pool of workers.

As per Mckinsey's report 39% of the employers say a skills shortage is a leading reason for entry-level vacancies. 36% of the employers also reported that lack of skill caused significant problems in terms of costs, quality and time too.

These days, students need to broadly understand the return of investment after pursuing a post graduate degree. With the increase in education loans, college debt is an investment in human capital but the problem is graduates don't earn enough to pay it off.  Borrowing Rs.300,000 lac when you are likely to earn Rs.200,000 is pretty much a recipe for unhappiness—no matter how much you love what you have studied. But borrowing Rs.100,000 to pay for a degree where you are likely to earn Rs.250,000 is a very smart investment. 

Hence, the overall focus of education is changing where students and colleges are realizing that general education does not cut it today and there is a huge need for specialized knowledge.

Institutions must cater to the competencies needed by diverse industries. There is a requirement to create a strong network across the board to foster to industry-academia collaboration. The shortage of quality professionals is an unfortunate reality today and unless we take strong measures, it will soon become a crisis situation.

Vocational & private Institutes need to bridge the gap between academia and the industry by providing knowledge and skill sets which are essential in today's competitive working environment. They must provide industry relevant programs that would provide successful and specialized careers to India's youth and at the same time provide corporates and the broader industry a source of sustainable talent.  For example, every year, 6,50,000 engineering graduates and approximately two million graduates pass out of colleges. Nearly two-thirds of the 6,50,000 engineering graduates need to be re-skilled, so that they become employable in the industry.

Meanwhile, the developed world requires knowledge workers and skilled professionals. By 2020, the developed world will have a shortage of 40 million working people, says a report. A recent study by global HR consultancy Manpower Inc says that, 41 per cent of employers worldwide are having difficulty filling positions due to lack of suitable talent in their markets.  Manpower shortages can cripple economic growth. It can escalate wage rates, thereby reducing the competitiveness of these countries. "If we do not convert our human asset, it will become a liability."

Realizing the need for informal skilled workforce in the country, many private institutes are offering vocational training with accreditation from recognized industry bodies resulting in empowering employment. These institutes also assure better placements for their students.

There is also an adequate number of organizations that wish to improve the education system, not only because of their belief in social objectives, but also because this is the need of the hour. It has been well documented that unless the young population is provided with employable skills, the demographic advantage that we have today will be lost.

One of the key drivers to improve the quality of education in the country is teachers. The quality of overall teachers' training institutes has been criticized and there is a strong need to develop the skills of teachers. There has been increasing trend of corporate professionals willing to share their rich experience and knowledge and train students on specialized skill set. However, most of these corporate professionals join private institutions to build and provide industry ready programs. They are nimble and can design programs based on the current requirements of the industry. Constant innovations are necessary to bring about qualitative improvement in the education system. These may be in the area of development of study material, leveraging technology, practical simulation programs and classroom transactions that make courses an interesting experience for all students.
 

Source: By E-mail (January 17, 2013)

Published on IndianMBA.com on January 18, 2013

 

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