Skill gap is one of the biggest problems haunting the massive youth population of India

Indian traditional education structure needs improvisation to create enough employment opportunities for the equivalently skilled workforce. So, what is the one crucial skill you absolutely must have in the future?

Less than 5% of India’s workforce is formally skilled, compared to China’s 20%, South Korea’s 96%, Japan’s 80%, Germany’s 75%, United Kingdom’s 68%, and the United States’ 52%, according to the ministry of skill development and entrepreneurship’s annual report for 2015-16. Why is India lagging so far behind?

To begin with, it may be noted that there is no agreed or uniform definition of what constitutes “skilling” for classifying people. Hence, the comparison of the proportion of skilled workforce across countries is likely to be misleading and not very useful.

In the case of India, only a formally skill-certified workforce is being accounted for in this number, excluding all professional higher education qualification holders such as doctors, engineers, chartered accountants, and MBAs. If we also use the more common international definition of a skilled person, that is a person has worked for more than 10,000 hours on a skilled job, around 44% of India’s workforce is likely to be classified as skilled, though not formally certified.

Skilling has emerged as a buzzword. The push for a policy-backed skill development initiative is a significant step towards realizing the potential of the workforce by enhancing its employability. The initiative seeks to strengthen institutional training, infrastructure, training of trainers, overseas employment, sustainable livelihoods, and leveraging of public infrastructure. But there exists a huge gap between the current status and the desired goals in terms of a skilled workforce.

The mismatch between skill, academic training, and employment has broadened to an extent where, on one hand, employers are unable to discover suitably trained people, and on the other, the youth is unable to find the kind of jobs they aspire for. According to the latest India Skill Report (2019), only 45.6% of the youth graduating from educational institutions are employable. To address this mismatch, it is imperative to understand the ‘return on skill’ (ROS) concept.

Common sense tells us that a skilled person is in a better position to enhance his earnings. But to be able to understand the impact of skills on employment, one needs to take a closer and analytical look at it. The International Standard Classification of Occupations (ILO, ISCO-08) provides a framework to make it possible to compare occupational data internationally. ISCO-08 does not seek to substitute the existing National Classification of Occupations but enables inter-country comparisons by aligning occupational classifications to ISCO-08 in concept and structure.

In the Indian context, many studies estimate the return on education at the national level using NSSO data, India Human Development Surveys I and II (IHDS), National Data Survey on Savings Patterns of India, etc. But there are hardly any studies that investigate the labor-market ROS due to the absence of skill-based earning data.

There is a high correlation between skill levels and education. One can argue that the higher the education, the higher the skill level. This can be further substantiated with the fact that only 3% of skill Level 1 individuals have high educational qualifications compared to 65% of workers of skill Level 4.

Regular salaried income offers a foreseeable income stream and is most likely to be associated with better job security. Only 13% of skill Level 1 worker report that they are paid a regular salary. In contrast, 60% of workers classified as skill Level 4 earn regular salaries. Skill Level 1 workers, on the other hand, receive 75% of their earnings from non-agriculture wage labor as daily wages. It is important to note that skill Level 3 and Level 4 workers are concentrated in regular salaried and self-employed non-agricultural occupations. This wide disparity in skill levels of the labor force is a cause for concern in terms of employability.

It is evident that there is a significant gap in skill development in India, and that this gap needs to be bridged for us to remain competitive in the world market. The skill development scenario offers itself as an excellent testing ground for public-private partnerships in providing training and ensuring the employability of our workforce. The primary objective of this study is to provide a clear understanding of the fundamental reasons behind the existence of this skill gap despite a vibrant and abundant young population and hence provide clear recommendations to companies and training institutes about opportunities in bridging the gap in the organized retail sector.

Industries and business enterprises are facing predicaments when it comes to hiring people. People possess the necessary qualifications for a particular job but lack the skill to produce an adequate amount of output or be sufficiently productive. Consequently, entrepreneurs and businesses lose out on a lot of money.

For the employee in question, such a scenario becomes a big cause of demotivation and low confidence. But it is at this crossroad that the fault lines in the system become apparent. So, whether it is reassessing the education system or devising proper employment standards, some specific action is required. For now, it has been the battle of the employee and the employer to deal and negotiate with the skill gap crisis but gradually, the government is taking the reins into its hands to reach a level where the skill gap doesn’t become cataclysmic.

What went wrong?

The education system didn’t attune the curriculum to the changing technological advancements.

As automation picked up and low-end jobs started becoming redundant, the IT industry began slowing down on hiring. At the same time, the demand for specialized skills increased. The professionals were becoming outdated as companies started to adopt new and advanced technologies. The quality of technology/engineering education wasn’t adjusted accordingly, and we suddenly had millions of graduates left to fend for themselves in the changing landscape.

The world had moved forward with advanced technologies like big data, artificial intelligence, cloud computing, machine learning, etc. becoming mainstream skill sets.

The demand for these skills from the IT industry and other sectors has been going up, but where do we feed the need from?

In the last decade, India witnessed its third big revolution: startups.

Building new ventures from the ground up is slowly and steadily becoming mainstream as more and more aspiring entrepreneurs have local successes (like Flipkart, Ola, Oyo, etc.) to look up to.

India has become the fastest-growing startup ecosystem in the world, where the fight for talent is extreme. Most new-age companies/startups find it hard to fill positions due to the lack of skilled talent.

Indian startups are hunting for talent in artificial intelligence, machine learning, robotics, and big data across the world to overcome a big demand-supply mismatch for talent with knowledge of futuristic technologies.

We now have a two-forked problem:

Scores of graduates who need to be skilled in technologies that companies want to hire and millions of professionals with skill sets that are becoming redundant at a rapid pace who need to upskill.

40% of IT professionals in India need to upskill themselves over the next few years

48% of Indian employers report difficulties filling job vacancies due to talent shortages.

Technology is moving forward at a pace never seen before. India, and its professionals as well as students, cannot afford to continue living in the 1991 era, where one degree and one-time education is going to last through their entire working career.

How do we avoid repeating the same mistake?

Changing the college curriculum is a slow process, so being dependent on that strategy is not going to serve us well as we enter a phase where technology upends an industry every five years or so.

Students and professionals alike need to start taking matters in their own hands and realize that technology education will be a life-long journey.

Companies are shifting from hiring based on credentials to hiring based on a candidate’s portfolio/projects and experience. It will become the norm sooner than later.

Indian corporate and educational space is witnessing huge investment of time and money in skill training, talent acquisition and retention to address the dearth of skilled workforce. There is a great void in the market because we gain knowledge in academic institutions and not the skills required for jobs. Indian traditional education structure needs improvisation to create enough employment opportunities for the equivalently skilled workforce. Post Right to Education Act, it has encouraged maximum students to complete their schooling, however, learning without hands-on practice is incomplete. To fill this void, the Indian industry is now implementing up-skilling and re-skilling training along with academic learnings through advanced technology interventions.

More than the shortage of jobs, India is facing a shortage of skilled talent in the technology space.

India is going to have 64 percent of its population in the working-age group by 2020. We have an opportunity to embrace upskilling to become a world power in the technology-driven future. It can only happen if we take the baton in our own hands.

The upskilling of our existing professionals, students, and future workforce cannot have a one-size-fits-all solution. We are hardwired culturally and historically to learn through a personalized approach and one-on-one coaching.

Key elements in bridging this gap:

Adding ‘Context’ in education

Content & context are equally required to skill people. In this information-driven age content combined with a strong contextual understanding seems more interesting and easier to retain and also provides a real-time perspective moreover, it also improves the scope of employment as well.

Technology empowered learning

The advent of technology is playing a significant role in reshaping the course of learning; hence, our education system is likely to be evolved and technology-focused to keep up with the pace of advancements. New technology-empowered learning modules including smart classes live online/virtual lectures, recorded videos, podcasts, Artificial and virtual intelligence, audio-video, etc. are reaping extra-ordinary outcomes in disseminating quality education amongst the learners. They are not only providing unlimited & uninterrupted access to knowledge through no. of resources but also are diminishing the distance & time factors that somehow work as a block in the way of quality education. Technology has empowered learners from rural areas too to access & imply advanced knowledge to hone their skills.

Integrated learning programs

Skilling & training has proved to be the most important investments in terms of quality output. Classroom training usually faces geographical restrictions related to equal distribution of quality education to all. Limited sources of teaching such as expert faculty, quality talent, applied learning modules also contribute to accelerate the disparity of demand and supply of talent. The integrated educational programs deliver learning through four forms of classrooms – Digital, On-Campus, On-sire, and On-the-Job offering a more holistic apprenticeship experience. It prepares the talent pool with add on practical skills and makes them ready for future employment.

Skill and professional education

Specializing in at least one professional skill is imperative while students are at schools or colleges. Embedding professional skilling programs and vocational courses across all education levels brace-up learners’ skills and make them eligible for better job opportunities with good remunerations.

The Central and State Government both are proactively introducing various skill training programs to skill existing and prospective workforces to meet the demand of skilled employees in the job market. The Ministry of Skills Development and Entrepreneurship launched its Skill India program to align three major aspects – Academics, industry and job aspirants. However, many players in the market are developing and offering advanced & customized solutions to re-skill and up-skill people. The system is looking forward to evolving a sustainable and long-term skill learning plans for all to achieve the desired output.

Corporates are also inclining their focus on the importance of training. Need to stay updated with the ongoing trends & technologies has become imperative for the growth in the industry. Thus corporate keep on imbibing customized training programs as per the specific teams or the entire workforce. These training modules incorporate advanced methodologies of gamification, story-telling, hybrid learning, and customized focused training programs to make training lighter yet highly effective.

It is clearly visible that education combined with professional skill is the need of the hour to fit into the current employment scenario bridging the actual shortage of skilled workforce.

If your next question is where are the jobs, consider some pointers below:

1. Data science is the fastest-growing field in India. Currently, India has over 50,000 open data analytics jobs and this is expected to grow to 100,000 in 2018. We will face a demand-supply gap of two lakh data analytics professionals by 2020.

2. Global consulting leader Accenture estimates AI will add $957 billion to India’s GDP by 2035. The average salary of AI professionals in India across industries is quite attractive. A two-to-four-year experience level commands a salary of Rs 15–20 lacs per annum; for four to eight years of experience, Rs 20–50 lacs per annum; and for eight to 15 years of experience, Rs50 lacs to Rs 1 crore per annum. (Source: https://bit.ly/2G5Tv7P)

3. There will be 3.5 million unfilled cybersecurity jobs by 2021. India would have a shortage of 1.8 million cybersecurity engineers by 2022. Salaries of top cybersecurity talent have risen 25–35% over the last one-and-a-half years. The shortage of skilled talent in the space is compelling firms to hire talent at high compensations of 2–4Cr

4. There is going to be a similar shortage of talent in machine learning, UI/UX, robotics, etc.

For India to maintain its position as the fastest-growing economy in the world, there will be multiple players who will need to do upskilling at scale.

As Nelson Mandela famously said, “Education is the most powerful weapon which you can use to change the world.”

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