Saturday, May 26, 2012

Bridging our vocational skills gap

Ask any businessman in India about his biggest challenge, and more likely than not he will point to an acute shortage of skilled manpower. Even when they manage to recruit workers, they turn out deficient in the requisite workplace skills and thereby require further training. India needs to address this quickly if it is to sustain its ambitious high growth targets.

There are two fundamental issues here. One, the quality of students being churned out by the institutes and colleges are extremely poor. An overwhelming majority of students, apart those from a few premier institutions, are simply unemployable. Two, there is an acute under-supply of people with skills to work in manufacturing shop floors and in other semi-skilled professions. This is related to the dominant trend of students preferring the four-year professional courses over the shorter vocational skills training courses. So how do we break out of this?  

In this context, the FT has an excellent article that draws attention to the "ability of the German system to match young people’s skills to those required by the labour market" through an apprentice system. It writes,
It emphasises a combination of theoretical training in the classroom and hands-on technical experience on the factory floor... In Germany, apprentice schemes such as this are the norm. About 60 per cent of the country’s school leavers begin an apprenticeship, which lasts up to three and a half years. About 570,000 trainees – or Azubis as they are known in Germany – started a dual programme in 2011.
The roots of Germany’s vocational training stretch back to the Middle Ages and foreigners have often viewed the system as complex, rigid and antiquated. Children are streamed for technical education earlier than in the UK or US, for example, and join one of about 350 prescribed trades that range from baking to floristry and industrial mechanics... German companies also seek to involve local partners, especially local colleges, both to help train the apprentices and to develop the curriculum.
Training is provided on the job and in vocational training schools, combining theory and practice. This model requires close co-operation between companies, vocational schools, local governments, employer associations and trade unions, which develop the curriculum together. Government even subsidize a share of the training costs. The trainee gets paid whilst learning and there is a very high likelihood of obtaining a job at the end of the process. The company benefits by way of cheaper access to the labour market and customizing the trainees for the specific skill-set.

Given the highly skilled nature of workers in many Germany equipment manufacturing firms and the deficiency of people with such skills, German firms have been adopting the dual programme approach even outside the country. Are there lessons for countries like India which are struggling with labour market shortages? Given the large network of industrial and vocational training schools across the country, there is a great opportunity to establish partnerships with local firms to train their prospective employees.

Update 1 (25/1/2013)

NYT has this nice report about the shortage of factory workers in China. It talks about jobs and positions for which skilled workers cannot be found, whereas on the other hand there are talented people with academic degrees, but no skills, who cannot find jobs. It writes,

China’s vocational secondary schools and training programs are unpopular because they are seen as dead-ends, with virtually no chance of moving on to a four-year university. They also suffer from a stigma: they are seen as schools for people from peasant backgrounds, and are seldom chosen by more affluent and better-educated students from towns and cities. Many youths from rural areas who graduate from college... are also hostile to factory jobs... The more educated people are, the less they want to work in a factory.

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