Recruiting Trends,
Problems and Opportunities for 2014
The say preparation is
the best defense against competition - and the year 2014 is gearing up to
become a watershed year in recruitments. It's admittedly getting harder to find
candidates with relevant job skills and poaching attempts are going to be more
ruthless. With a dearth of top talent and scarcity of skills currently plaguing
the Indian employment sector - Corporate HR Departments are focused on the
acquisition and retention of high performers - by any means necessary. As
Employers plan their strategies, TimesJobs.com spoke to Though Leaders on the
ensuing War for Talent, and here are the recruitment trends to watch out for
- Social/Professional Networking Sites According to a TimesJobs.com survey,
49 per cent of the surveyed employers believe that the key benefit of social
recruiting is its potential to reach the inaccessible, passive candidates.
Nearly 18 per cent employers opined that employing social networking tools
would help them source and hire potential tech-savvy candidates. Faster filling
up of key positions, thereby reducing the recruitment time is also considered
an important benefit of social recruiting, as agreed by 16 per cent of the
surveyed employers. Experts agreed that technology, social tools and referrals
play a very crucial role while adopting this approach. According to Sunil Goel,
MD, GlobalHunt, "Social and professional networking sites have been able
to attract people, irrespective of their domain knowledge, functional expertise
and geographical location. Social and professional networking sites also keep
individuals regularly engaged to their community." Employer Branding
Employer branding is one of the most powerful recruitment tools available in
today's competitive environment. Essentially employer branding communicates and
shapes an organisation's reputation as an employer. Incorporating branding
efforts into recruitment activities strongly reinforces the image and the
message that the employer wants to portray to the potential candidate. The
objective of employer branding is quite simple. Internal Hiring /Succession
Planning Internal hiring as well as internal job rotations are becoming key
tools for employee motivation as it helps a lot in succession planning wherein everybody
sees growth for themselves. To improve the possibility of its employees to
become leaders in the future, an organisation should focus on building skills,
provide a strong mentor, and show a career path. Given today's criticality of
talent acquisition and retention, it is in fact critical to create a leadership
pipeline. According to Asim Handa, CEO, GI Group India, "It's important
that employees have a feeling of security and can see career growth with their
employer. Employee referral programs can work wonders for companies as it gives
incentives to employees as well as ensures quality candidates with minimum drop
out ratio." –
Mobile Recruitment
Mobile devices have become more powerful than computers. New age technology
allows mobile users to respond in real time either in attracting talent, or
while responding to jobs or video interviews. According to Srikanth Rengarajan,
executive director & president, ManpowerGroup India, "Mobile
recruiting is a dynamic and growing industry with over 19% of job seekers using
mobile devices to search for jobs. The sudden increase of smart-phones has
created a massive audience of potential job-seekers to address. Increased
engagement of both; the employer and the potential candidate has eased the
recruitment process. To use the efforts of the mobile and expanding the
database of job seekers; to push out the relevant info to the seekers and
attract the potential candidates reflects the significance of this source of
recruitment." -
Gamification
Employers today are ready to experiment with their hiring strategies and
gamification seems to be another innovation approach in this direction.
According to the TimesJobs.com survey results, nearly 25 per cent employers use
gamification for the purpose of recruitment. The techniques of gamification,
use of puzzles and challenges for locating niche skills, can be used to judge
problem solving, quick thinking, time management and many other
leadership-essential qualities that just can't be measured with multiple-choice
tests. For the hiring of the forthcoming tech savvy Gen Z people, this
technique is a real success. Prashant Bhatnagar, director- Hiring &
Staffing, SapientNitro India, "Many organisations have inculcated
Gamification into their hiring strategy lately, to ensure that new hires come
up to speed faster than before; thereby helping them contribute to the firm's
productivity and creativity from the very beginning. Gamification has risen as
an effective tool in sifting through talent. It helps one understand a lot about
a candidate's characteristics, their behavior, approach, potential to apply
knowledge and problem solving capability." -
Gamification in the workplace is not
just about using badges, mission and leaderboards. Instead, the strategy is
about truly understanding who you are trying to engage, what motivates them,
and how gamification can change the way they work, communicate and innovate
with peers and customers.
Campus Hiring Indian
organisations are investing time, energy and money to tailor make campus
recruitment strategies that feed their talent pipeline. In a survey conducted
by TimesJobs.com, nearly 70 per cent of the organisations claim to have a
comprehensive and ingenious campus recruitment program. There are huge number
of companies in each of the markets and a limited number of professionals
available to cater to the need of the markets. Campus hiring has been able to
fulfill a major skill gap, where companies hire from the campus and train them
as per their need, process, function and technologies. According to
Srikanth Rengarajan, executive director & president, ManpowerGroup India,
"Campus hiring has been kicking off lately as employers are placing a lot
more importance on people who have a passion for winning, are extremely
accountable, can take quick decisions and plunge into execution, are
consumer-centric and have the basic qualities required to build leaders and
teams. Campus hires can prove to be the best fit to the framework of the
company, such that they can be successful long-term contributors to the
business and organisation." Employee Engagement -
Employees are an asset
and the key contributors in business output and growth. Older the employee,
better the value proposition for both, the company as well as individual, as
they understand each other better. Employee engagement, therefore, has become a
long term business proposition for both employee and employers. According
to Ashootosh Chand, director-Business Development, RIPL (Ricoh Innovations Pvt
Ltd), "As a move towards improving employee retention, companies are
finding newer and innovative ways of engaging their employees - one leading
example is engaging employees with corporate social responsibility (CSR).
Technology is also used for engagement, these days. Employees, who are
technologically engaged with an organisation, tend to better believe in the
vision and strategic alignment of the organisation. A more motivated workforce
means lesser employee turnover as employees are willing to stay with the firm
longer." Employee Referrals Employee referral is one of the most trusted
talent sourcing methods, as through referrals one can gauge the individual
beyond the resume and assess the working style of the person. Employee
referrals have the highest applicant to hire, conversion rate. The referral
hires tend to understand their role better and start performing sooner; due to
prior understanding of the background of the company and its culture According
to Sunil Goel, MD, GlobalHunt, "Employee referral is one of the trusted sources
as through referral you know beyond the resume about the individual & all
round working style of the person. This is also one of the minimum time
consuming & cost-effective process." Crowdsourcing A
TimesJobs.com survey revealed that nearly 57 per cent of surveyed employers use crowdsourcing for recruitment purpose. Much has been
said about many being smarter than a few. The wisdom of the crowd or
crowdsourcing, gives precedence to the collective wisdom of a group of people
over a single expert. Though not a new concept, it has recently gained momentum
as a very efficient recruitment tool in the new age recruitment model
Recruitment 4.0, which emphasises on technology and networking advancements. -
According to Sameer
Bendre, chief people officer, Persistent Systems, "Collective wisdom and
collaboration is the crux of crowdsourcing. By effectively using crowdsourcing,
companies are sure to reap enormous benefits. The ability to tap into the
experience and talent of people in a collaborative manner is probably the
biggest advantage of crowdsourcing; it can be used as an effective and hassle
free marketing tool." -
Application Tracking
System An ATS comes with features to import,
store, organise and manage candidates' information in a centralised database.
This helps in building a robust candidate pipeline to meet your current and
future hiring needs. Looking for the right candidates from a sea of applicants
is not an easy task. Modern ATSs have been able to address this problem to a
great extent through name, skill or candidate data search. According to Avi
Gopinath, vice president-Operations, 99ATS, "Recent enhancement in 99ATS
allows users to search with any name or words mentioned anywhere on candidates'
resume. Easy tracking also allows one the freedom to plan the work ahead
depending on the real-time or future availability of prospective employees or
contract workers. Perhaps, one of the biggest advantages of ATS is that one can
have 24x7 access to a centralised database of candidates which can be shared
with the key management personnel. This not only enhances the quality of hire,
but gives it speed as well." Big Data
With Big data, companies can cultivate information from various sources
and compile this as a data bank. Based on the assessment of this data and
recommendations, organisations are able to get the best of available talent
from the market. According to Srikanth Rengarajan, executive director
& president, ManpowerGroup India, "The predictive power of big data,
when applied to human behavior is set to revolutionize how business operates.
Big data analytics can be one of the major differentiators' of progressive HR
organisations from the ones that are not. Big data can predict the behavior of
talent with the level of accuracy to allow an organisation identify a typical
profile of people that it should invest in. This method plays a central role in
helping the organisation identify the talent which is not likely to succeed in
a future leadership position." –
by
Dr.
John Sullivan
Dec 16, 2013,
1:39 am ET
If you are looking for a comprehensive list of the corporate
recruiting trends and predictions for 2014, this two-part article covers the
top 25 most likely trends. Part 1 included the first 14 trends that covered new recruiting
opportunities and continuing recruiting trends. In this Part 2 of the series, I
cover the 11 remaining trends, including recruiting challenges/problems that
corporate recruiting will likely encounter during 2014 and some recruiting
areas that will likely continue to diminish in importance. I have also included
a separate section covering eight developing areas that have yet to peak.
Section 3: The Biggest Strategic Recruiting Challenges
The eight most significant corporate recruiting challenges or
problems that will be prominent during 2014 include:
1. Retention
problems will increasingly impact recruiting – as more employees become comfortable
shifting away from security needs and toward more exciting job opportunities,
turnover rates will increase by over 25 percent. This dramatic increase in
turnover will create many new “sudden openings” which will put an added strain
on already stressed recruiting systems. In order to help reduce future
turnover, the “potential for early turnover” will have to be included in the
assessment criteria for all finalists.
2. Speed once again becomes essential to remain competitive – over
the last few years — with high unemployment and little competition for talent —
in many cases recruiters could take their time and still land top candidates.
As the pace of change in business and the competition for talent increases,
firms will have no choice but to revisit “speed of hire” approaches and tools
in order to land candidates that are in high demand.
3. Limited
resources will require position prioritization – the increased hiring volume coupled with
the inevitable lag in being provided with additional budget resources will
require most firms to prioritize their jobs. Recruiting will then allocate their
resources toward filling revenue generating and other high-business-impact
positions.
4. Business
volatility makes workforce planning more necessary but more difficult – as continuous business volatility in a VUCA world
becomes the “new normal,” executives will increase their demand for data-driven
workforce planning. Unfortunately, most talent functions simply do not
currently have staff with the capability to conduct sophisticated workforce
forecasting and planning.
5. College
recruiting must be reengineered if it is to succeed – the demand for college talent in key majors
will continue to increase dramatically. Unfortunately, corporate college recruiting
budgets and processes have been mostly stagnant over the last few years, even
though colleges themselves and the expectations of their students have changed
dramatically. A reengineered college recruiting model must move beyond a focus
on career centers and increase its capabilities in the areas of global college
recruiting, remote college recruiting, recruiting students
from online universities, recruiting “passive” students, and the use of market
research to completely understand the job search process and the expectations
of this new generation of grads.
6. The shortage
of top recruiters will become evident – as recruiting ramps up, firms will begin to
realize that there is a significant shortage of talented and currently
up-to-date recruiters. After poaching from the rapidly shrinking executive
search world, leaders will begin bidding over top corporate recruiters. A lack
of quality internal and external recruiter training capability will make the
recruiter shortage even worse.
7. Large firms
must learn to compete with startups for talent – the recent lavish funding and the
economic success of numerous startups will continue to make them attractive to
innovators and top talent. Unfortunately, few major corporations have a
market-research-driven strategy or a set of tools that allows them to
successfully recruit against startups for these valuable prospects with a
“startup mindset.”
8. Finding
high-impact technology will still be problematic – although there is a wealth of new
technology in recruiting, almost all of it is designed to reduce costs and
administrative burdens. After 20 years of waiting, I have yet to encounter the
breakthrough recruiting technology that produces a competitive advantage by
demonstrating in a split sample that its usage directly improves the on-the-job
performance of all new hires by at least 20 percent over existing processes.
Section 4: Areas That Will Continue to Diminish in Importance
The downward trend in these three final corporate recruiting areas
will continue through 2014.
1. Recruitment
advertising and the
corporate website – as more applicants demand authenticity
and crowd sourced “real” information, both the corporate career site and all
forms of traditional recruitment advertising will continue to produce a lower
ROI.
2. Sourcing
becomes easier – as almost everyone becomes “findable” on the Internet and
social media, the formally critical role of sourcing will be reduced. The new
focus will shift toward improving the various “selling components” of
recruiting.
3. Underperforming
sources need to be deemphasized – the growing emphasis on using metrics to
determine the quality of hire from each source will continue. And as a result,
all heavily used channels like large job boards, Facebook, and job fairs that
can produce low-quality hires will have to be deemphasized.
—————————————————–
Trends That Won’t
Peak Until 2015 and
Beyond
This last section covers seven developing corporate recruiting
practices that can’t accurately be classified as trends for at least another 18
months.
·
Competitive analysis is not yet a
standard practice – although
recruiting is clearly a competition and a “zero sum game,” most recruiting functions
are almost 100 percent internally focused. Unfortunately, you can’t prove to
executives that you provide a competitive advantage unless you do a
side-by-side comparison of your recruiting approaches and results with your
talent competitors. The recruiting function will also eventually have to
develop plans to track and then counter each your competitor’s major recruiting
and employer branding moves.
·
Market research practices will
eventually allow you to fully “know” your prospects and candidates – eventually recruiting leaders will learn
that you can’t effectively find or sell top prospects until you fully
understand how they search for a job, where they would see recruiting
information, and what factors excite them about a company or a job. The sales
and customer service functions have successfully used market research for
years, and eventually these practices will be adopted within the recruiting
function at all top firms for both experienced and college hires.
·
Firms must eventually begin to “map”
their future talent pipeline – great
recruiting functions are forward looking, so they attempt to identify and
assess future talent targets long before they are needed. These approaches
require that you identify your future talent pipeline. Leading firms will
eventually learn to supplement their standard filling-vacant-job approach with
a more proactive talent pool for talent pipeline approach. This practice
involves identifying and then “mapping” the top talent throughout your industry
with the goal of eventually bringing the best onboard when they are ready to
move on. More firms will also eventually learn to use professional learning
communities as talent pools, while others will use pre-need employee referrals
to develop this talent pipeline based on employee recommendations.
·
Finding “their work” online will
eventually become a key sourcing tool – as more and more
individuals post examples, pictures, videos, or portfolios of their work on the
Internet, finding talented individuals who might not be looking for a job will
move into the mainstream. In addition, evaluating their actual work will prove
to be an accurate assessment approach.
·
Virtual reality simulations for
assessment will
gradually be introduced – although airlines and the
military have successfully used them for years, the costs have slowed
simulation usage for assessing candidates. As costs decrease, virtual reality
simulations will eventually become a standard assessment practice.
·
Hiring those without degrees or
standard credentials will soon become more common –
firms like Google, Facebook, and most startups have had notable success with
hiring individuals regardless of their degree status. As a result,
“credentialess” approach will eventually become a more common corporate
practice as metrics demonstrate a similar high success rate in business that
has been found in hiring non-college grads in the sports and entertainment
fields.
·
Personalized recruiting is on the
horizon – although it is still currently rare, more organizations
will attempt to personalize their recruiting and to target their recruiting
pitch specifically to individual high value prospects.
Final Thoughts
There will be a marked increase in recruiting competition in
high-growth industries like technology, the mobile platform, social media,
construction, and healthcare. In addition, the next year will see an increased
demand for high performers, technologists, and innovators in key jobs in every
industry. In fact, a recent survey of CEOs revealed that 77 percent of firms
are currently changing their talent strategy, which means that most CEOs agree
with me that the need for change in the talent area is already present.
As a recruiting leader, realize that, just like in the product
area, if you want to dominate your recruiting marketplace, you will have
to move fast in order to stay ahead of the trends and the adopted practices of
your competitors. If you delay taking action, it is almost impossible to “catch
up” if you fall too far behind, because your talent competitors will be continually
moving ahead of where they were when you originally benchmarked against them.
In order to stay ahead and also to build a competitive talent advantage, don’t
wait for your new year’s budget to kick in before you start developing your
plan for addressing the upcoming problems and for taking advantage of imminent
talent opportunities.
Professionals can honestly disagree about which trends will be the
most prominent over the next year, but there can be little disagreement over
the fact that dramatic changes are unavoidably right on the horizon.
The U.S. economy
experienced its share of ups and downs in 2013. Yet as the year comes to a
close, the economy is showing signs of improvement that should continue into
2014. The housing sector is rebounding, the stock market has hit new highs,
consumer spending is up and unemployment is at its lowest in five years. Even
with these positive indicators, the debt issues in Washington will continue to
play a role in impeding a more accelerated jobs recovery.
Employers are cautiously optimistic that 2014 will bring a
stronger job market, but they aren’t ready to commit to upping their staff
until the outcomes of debt negotiations and other issues affecting economic
expansion are clearer. While we’ll need to wait until these issues are resolved
to know the full impact they’ll have on employers’ hiring plans in the New
Year, job seekers should pay attention to the following seven trends shaping
the 2014 job market, identified in CareerBuilder’s annual job forecast:
1. Full-time, permanent hiring stalled
The uncertainties surrounding the debt ceiling will cause employers to be more
guarded in their plans to hire permanent staff in 2014. Twenty-four percent of
employers expect to hire full-time, permanent workers – down from 26 percent
last year – yet one in ten is still undecided about recruitment plans. Nearly
one in four employers will hire at a slower rate or will hold off on headcount
expansion until the debt ceiling is resolved in the first quarter.
Sales will lead the way in positions employers will most need to
fill in the New Year, with 30 percent of hiring managers planning to recruit
full-time, permanent employees for sales-related roles. Information technology is close behind,
at 29 percent, followed by customer service (25 percent), production (24 percent),administrative (22 percent), engineering (17 percent), marketing (17 percent),business development (17 percent), accounting/finance (15 percent),research/development (13 percent)
and human resources (10 percent).
2. Companies relying on temporary and contract hiring
A trend that has been growing post-recession is for companies to turn to
contract and temporary help to meet their hiring needs. This allows them to
have flexibility in their workforce, so that as market demands change, they can
dial up or dial down staffing as needed. Forty-two percent of employers plan to
hire temporary or contract workers in 2014, up from 40 percent last
year. Of these employers, 43 percent plan to transition some temporary
employees into full-time, permanent members of their staff.
3. Part-time hiring on the rise
Companies will also rely more on part-time employees in the New Year. Seventeen
percent of employers expect to recruit part-time workers over the next 12
months, up three percentage points over last year. While various factors
will influence this trend, 12 percent of all employers stated that they will
likely hire more part-time workers in 2014 due to the Affordable Care Act.
4. STEM occupations continue to grow
As the U.S. continues on its path of economic recovery, there are certain
occupations that will be a driving force behind the rebuilding and
strengthening of our economy. The technological innovations, new products and
discoveries that come from STEM (science, technology, engineering and math)
occupations help fuel economic growth and keep the U.S. competitive in a global
marketplace. These occupations, which have been a major focus in the past
several years, will continue to remain center stage, with more than one in four
employers (26 percent) planning to create jobs in these areas over the next 12
months.
5. Skills gap widening
While the growth of high-skill, specialized occupations is a positive sign for
the economy, human resources managers are struggling to keep up with the demand
to fill these jobs. Looking at a subset of HR managers, 51 percent said they
currently have positions for which they can’t find qualified candidates.
Forty-six percent said these positions go unfilled for three months or longer.
Companies have come to realize that if they wait for the perfect
candidate, he or she may never come, so they’re putting more emphasis on
training and development to help shrink the widening skills gap. Nearly half
(49 percent) of employers plan to train people who don’t have experience in
their industry or field and hire them in 2014, up 10 percentage points over
last year. Twenty-six percent of employers are sending current employees back
to school to get an advanced degree – and covering all or some of the expense.
6. More companies “onshoring” jobs
The U.S. government has strongly supported initiatives to bring jobs back to
America as a way to spur U.S. growth. It looks as though the push for more
“onshoring” is proving fruitful: 23 percent of companies who offshore
jobs said they brought some of those jobs back to the U.S. in 2013. What’s
more, 26 percent plan to do so in the next 12 months, indicating that this is
not just a passing trend.
7. Compensation more competitive for specialized and in-demand
positions
In order for companies to find and retain the best talent, they’ll need to
offer competitive compensation, especially for in-demand or hard-to-fill
positions. Sales and IT – the top two positions companies plan to hire for in
the New Year – are also where employers expect to provide the biggest salary
increases. When it comes to high-skill roles, 26 percent of employers plan
to raise starting salaries for these specialized positions in 2014.
Looking across positions within an organization, 73 percent of
employers expect to increase compensation for existing employees – on par with
last year – while 49 percent will offer higher starting salaries for new
employees – up from 47 percent last year.
Employers are continuing to proceed with caution with their hiring
plans as they head into 2014. Yet, as the economic issues plaguing Washington
play out over the next few months and employers find their footing, there is
greater potential for the average monthly job creation in 2014 to exceed that
of 2013.
Matt Ferguson is the CEO of CareerBuilder and author of “The
Talent Equation: Big Data Lessons for Navigating the Skills Gap and Building a
Competitive Workforce.” http://www.talentequationbook.com
The new trends in interviewing
Just
like fashion, new trends are always emerging for interviewing platforms. Yet,
making a career transition is tough enough without focusing valuable energy on
pursuing the latest bells and whistles. Though some may not be your preferred
style, there will always be a “new black” that recruiters are ready to try on
during an interview. The idea is not to chase the trends but be cognizant, and
capable, of successfully navigating the ones that come your way.
Group
Interviews
Somewhere along your career journey you may participate in a group interview.
This may include multiple hiring managers, team members or even a panel. You
might even find yourself being interviewed alongside other applicants. This
“firing squad” approach isn’t necessarily easy (or fun) unless you’re one of
the hiring professionals who prefer to save time by rapidly narrowing the
talent pool. Odds are, any time the number of people in the interview increase,
so will your stress. The success strategy includes not being caught off guard
when you walk in the room and discover multiple interviewers or applicants.
Being aware of this trend and even practicing your approach will help you stay
calm and focused. Be sure, however, to address each person equally with your
responses and eye contact.
Video interviewing
The fact that they don’t even make laptops without cameras anymore should clue
you in that the video interviewing trend is here to stay. When it comes to
video interviewing the challenge lies in overcoming self-distraction, or in
other words, getting out of your own way. If your Internet connection is
sketchy, you might find yourself focusing more on technical issues than
concentrating on impressing an employer. Check your connections beforehand or
book a conference room where technology interface is part of the package.
Another hurdle includes “personal” distraction. Some candidates lose focus and
eye contact and tend to fidget more as they get distracted by phones, family or
even seeing their image reflected back during an interview. If you’re one of
them, set up a time and place to conduct a few video interview dress rehearsals
before the big day.
Quirky questions
“If it were possible, what theme song would play each time you entered a room?”
“What is the biggest mistake you’ve made in your career?” “If you were a Disney
character, which character would you be and why?” Welcome to the trend of
quirky questions. Hiring managers ask questions like these, and other
seemingly not so relevant queries, for number of reasons, including having a
creative way to assess an applicant’s personality. Quirky questions can also be
used to determine how well you can handle being thrown a curve ball, if you’re
flexible and innovative and if you have the ability to learn from past
mistakes.
These
interpersonal skills-driving questions may also ease the tension in an
interview. The challenge is not to overthink them but rather go with the flow
and offer honest, and in some cases light-hearted, responses. Remember, this is
still and interview, so your answers should shed a positive light on your
ability to contribute positively to an organization. Perhaps you’ve chosen
Alice in Wonderland as your Disney character; be sure to give a host of reasons
why “Alice” would make a good employee. She’s inquisitive, thoughtful, creative
and willing to take risks. One note of caution, even if the interviewing mood
becomes more playful with these questions, it’s not the time to be
self-indulgent or too forthcoming; especially if your theme song is “Highway to
Hell.”
India faces a curious
dilemma. In the next two decades, it will add over 200 million people to its working age - between 18 to 60 years - population. Much
more than any other country in the world. Even China, seen as the mother lode
of the global economy this century, will see its workforce shrink by about 100
million by 2030.
For India, more working people means more income. More income means a more
prosperous nation. For a country that will become a middle income nation - per
capita annual wages of $1,200, translating into Rs 4,500 a month - by the end
of 2010/11 after more than a century of penury, its young population presents a
never-before opportunity for transition.
That is, if it can get its
people readied for work. If it can train its young to man global standard factories. If it can get
its young to be smart accountants. If it can turn its young into efficient yet
friendly front office staff at super markets. If it can have its young tell the
difference between a dovetail joint and a lap joint in a well-crafted wooden
table. If it can produce enough nurses and doctors to charm and heal the
world's increasing old. If it can...
If you are among those sceptical of India's
capacity to do so, Business
Today has news for you. There are the beginnings of a trend
of India starting to train its people on a scale large enough to alter the
nation's future. Dozens of training companies with ambitions of training
millions in engineering, construction, manufacturing, retailing, insurance, banking
services including microfinance, accountancy, hospitality, health care and
other vocations are sprouting up around India.
Nitesh Kumar Chaurasia, an
arts graduate from Gorakhpur, a town in eastern Uttar Pradesh, is one among the
thousands of young Indians flocking to these institutes. Enrolled at a
four-month module on business accounting at IIJT, a skill training provider and
part of India's biggest staffing company TeamLease Services, the 21-year-old's
logic for paying Rs 28,000 for the programme is simple: "I would rather
work in a comfortable office environment." Among the several jobs
Chaurasia has pursued in the past is a position in the Uttar Pradesh police
force.
The draw of a higher
probability of landing a job is strong and many pay the Rs 30,000 to Rs 50,000
course fees even if it is more than half a year's income in a lower middle
class family. IIJT, across its 123 centres in India, has 12,000 trainees on its
rolls. In an economy where even multi-billion dollar companies are growing
revenues at 15 to 30 per cent annually, demand for talent is such that many
among the neo-trained are getting jobs.
The story resonates across India, as BT writers
and photographers who travelled to Bulandshahr, Chandigarh, Pune, Mysore, and
Manesar, besides big cities such as New Delhi and Hyderabad, found. In the
capital's Shastri Park, Delhi Metro Rail Corporation is training its managers
and line workers. It has roped in multiple private players to train its
workforce.
Among various modules,
IndiaSkills, a venture between Manipal Education and the UK's City &
Guilds, trains the technical staff (mostly diploma holders from Industrial
Training Institutes, or ITIs) in safety and maintenance. The target is to train
2,000 in batches of 70 a week; already 800 have completed their training. This
is just the beginning, says Hari Menon, CEO, IndiaSkills. "Over the next
five years, we plan to skill and facilitate employment of one million learners
through 500 skill centres covering 50 per cent of districts of India," he
says.
Aiding that effort is the
National Skill Development Corporation, or NSDC, a partnership between the
Union government and industry associations. The National Skill Development
Policy puts the need for skilled hands in India at 530 million. NSDC has been
entrusted the task of producing a 150-million-strong skilled workforce by 2022,
or some 13 million a year. (The remaining 350 million, it is expected, will be
covered by the current crop of colleges, ITIs and other institutions.) That's a
big jump from the three million skilled workers India produces annually today.
NSDC has committed Rs 667 crore to support private and government-aided skill
initiatives and has given its nod to 26 projects to date (See NSDC's Project
Partners). Several more are in the pipeline.
With a huge addressable
market for skill development and active government support, many are joining
the bandwagon, including corporates such as Centum Workskills and IL&FS,
first time entrepreneurs such as Edubridge and iStar, NGOs like Pratham, and
private players NIIT, Global Talent Track, or GTT, and Basix's BABLE. India is
also poised to get its first vocational education training university in
Gujarat to be set up by the state government and TeamLease.
The range of training runs from shopfloor to
software. At an office on Pune's Dholey Patil Road, around 40 students are
learning dotNET, a Microsoft Windows technology, at a lab set up by GTT. This
is the latest centre of GTT, set up in 2008, adding to a chain with a presence
in 15 states, including far-flung Assam and Jammu and Kashmir.
But international experts
point to the danger of a government-led nationwide training programme. Karan
Khemka, partner at Parthenon Group, a London advisory firm specialising in
education, believes hiring companies are running their own training. Pointing
to Wal-Mart, the biggest retailer in the United States, or Infosys Technologies
closer home - both have made training a fine art - he asks: "If vocational
training had such tremendous potential, why is it that there are no large
vocational training companies operating successful businesses?"
Yet, there is no denying India's crying need for
skills, the genesis of which lies in its faulty education system. Government
programmes such as the Sarva Shiksha Abhiyan and the growing prosperity of
citizens means higher enrolment - near 100 per cent in many parts of the
country today - in primary schools, but competency tests of students show how
poor the quality of education is. A survey of rural schools in 2010 by Pratham,
a non-governmental organisation engaged in education, showed that more than
half the students in Class V could not read beyond Class II textbooks. In urban
India, some eight million drop off from the education system between Class X
and graduation, according to one estimate. (About two million graduate in India
every year.) Such dropouts make for customers of what is being touted as the
next big business opportunity: NSDC estimates India's training market at $22
billion.
t was a 2005 study by
software lobby Nasscom and consultancy firm McKinsey & Co. that jolted
India out of its reverie on employability. The study focused the spotlight on
what employers knew - just one in four engineers was employable, or could be
trained for a job. Profiles in other industries were no better. The
employability situation has worsened since then.
Nasscom says employability in technology in 2011
is still 26 per cent, while in business process outsourcing services, it is
between 10 and 15 per cent. "It's not that needs have changed or the
industry requirement has gone up; it's just that the input quality has
dropped," says Sandhya Chintala, Senior Director for education initiatives
at Nasscom, referring to the abysmal levels of competence among students coming
out of colleges.
That is bad news for the software and BPO
sectors, which already spend Rs 5,400 crore on training every year and are
projecting a need for 10 million workers by 2020, nearly four times the current
2.54 million. "About 95 per cent of Indians coming out of the education
system are not employable," says GTT's Ganesh. But "a majority of
them can be made job-ready".
One way to get there is to
copy what India's biggest carmaker Maruti Udyog has been doing:
"adopting" ITIs for talent. It has employed over 500 ITI graduates
with the Maruti Service Network so far, says S.Y. Siddiqui, Managing Executive
Officer, adding his company will take the number of partnerships to 35 by the
end of March. Other automakers, too, follow similar programmes (See
Employability, Delivered).
Still, training half a
billion people in 11 years can be a very tall order. Dilip Chenoy, NSDC's CEO
and Managing Director, says the biggest challenge before the training industry
is scale. So while NSDC does promote entrepreneurs who know their local regions
well and NGOs such as Pratham, it is aware of the need for roping in the big
hitters. "This is imperative as players such as Centum, IIJT and Everonn,
among others, have the ability to deliver scale,'' says Chenoy. Centum
Learning, part of the Bharti Group, has formed a joint venture with NSDC called
Centum WorkSkills India, to train 12 million people across 11 states in 383
districts by 2022. A venture with a unit of tech-enabled trainer Everonn will
be even bigger, says the NSDC head.
Seasoned players like Centum bring to the table
both backward and forward linkages. "We work with companies to understand
their skill set requirements over a period of time. We then work backwards and
decide what courses we would like to launch and where we should be opening our
training centres,'' says Sanjeev Duggal, CEO and Executive Director.
There are start-ups in the wings, too. Intex
Technologies, an IT hardware, mobile phone and electronics company, based in
Delhi, is working on a solution based on third generation mobile phone
technology where a phone handset can be used by instructors and students.
Bangalore's iStar Skill Development, an NSDC partner, was founded by two
batchmates from the Indian Institute of Management, Ahmedabad, to focus on training
for the financial services industry.
The quality and the
availability of trainers is a challenge too. "Creation of trainers is one
of the major issues before the country," says Labour Secretary Prabhat
Chaturvedi. To address the problem, the Labour Ministry is assessing trainer
requirements. The ministry has given a mandate to the Noida-based VV Giri
National Labour Institute to conduct a study on trainer requirements. "We
will work on the future course of action once the report is submitted to us
March-end," says Chaturvedi. The news is not likely to be good, given how
underpaid teachers and trainers are in India.
The next challenge is the lack of
standardisation and certification in an industry that is more motley than
organised today. Even as the likes of IndiaCan, a partnership between Educomp
and Pearson, or IndiaSkills have been quick to embrace international
certifications, NSDC's Chenoy says he prefers sector-specific skill councils
that will "set up a competence matrix". Education and training firm
IndiaCan's CEO Sharad Talwar holds a different view.
"It is an 'international' certificate as it
involves thirdparty, external verifiers who come from the UK. These are
experienced people who have tested across different markets,'' he says.
Sooner than later, it is clear that
certification will become the norm. That pressure is felt even at rural,
mid-size training ventures. Take Gram Tarang Employment Training Services,
which operates in the Naxalism-affected areas of Orissa and Andhra Pradesh. It
was forced to get certification from the National Council of Vocational
Training and has also tied up with Meritract of Australia that does third-party
testing, as also the Indian Institute of Welding. New Delhi-based B-ABLE, part
of the microfinance organisation BASIX, has tied up with industry leaders for
certification: Larsen & Toubro for construction and Tata Motors for the
auto sector.
India's newfound push on skilling could help it
follow the South Korean or even German models where an intense vocational focus
in education and training helped the countries rapidly expand their economies.
If the dozens of training institutes mushrooming in India can deliver it a
skills edge, the country could reap benefits of its demographic dividend. Else,
India better get ready to deal with a demographic disaster.
