1. Creating a merit-driven labour market

Creating a merit-driven labour market

Standardised assessments, and not yet another certificate, are key to the success of the Skill India mission

Updated: January 4, 2016 1:07 AM

Skills will define opportunity in the 21st century and there is a global trend to identify, train, assess and deploy skills to boost productivity and growth.

The much-touted demographic dividend of India is heavily reliant on creating a skilled workforce. More than 80% of the country’s working population is part of the vocational segment commonly known as blue collar and grey collar.

Fuelled by powerful initiatives such as Skill India and Make in India, the skilling and labour ecosystem is going through rapid change. In fact, a recent report released by the National Skill Development Corporation (NSDC) states that around 119 million additional skilled workforce will be required by 24 sectors by 2022. Now, skilling such a large population in such a short period of time is not feasible by traditional mechanisms of training and quality controls. Assessments and certifications are being considered and, going forward, will be the core ingredient to scale up these initiatives in a quality-centric manner.

A major gap in the vocational labour markets is the sheer lack of indicators of qualification or readiness. There is no real equivalent of a degree for recognition of vocational skill, though the effectiveness of degrees in itself has been challenged. Vocational skill assessments help aspirants test themselves against industry-recognised standards and earn certificates recognising their skills. In addition, these provide the much-needed respect and interest towards these professions.

Differential wages or capability-based wages are pretty much absent in the blue collar job market. Almost every one entering the workforce is hired at near-minimum wages, and in most sectors wages remain completely disconnected to skill levels or even experience. And this results in sapping out any motivation people would have to get skilled or specialised. Graded certificates recognising skills and the proficiency levels in the form of grades can help address this aspect, at least partially.

While the sector is plagued with the lack of qualification indicators and differential wages for the qualified, the same is compounded by the absence of a structured and standardised recruitment mechanism, to match people to jobs.

Basically, there is no real working equivalent to job boards/portals or large structured recruitment firms for the blue collar space. And the lack of such scalable systems demotivates industry to invest in this labour ecosystem, as it is hard to realise long-term value.

It has also been argued that such systems cannot exist without anchor information to match and connect. Assessments and certification information again help solve part of the puzzle in creating a meaningful, scalable and effective recruitment ecosystem.

As a by-product, skill certifications provide real analytics and benchmarks to assess the effectiveness of various parts of the ecosystem, including training, up-skilling, recruitment, labour market dynamics and much more. In addition, it can provide much-needed statistics to bring education and training efforts in sync with current industry needs.

Here I must mention a recent study conducted by Aspiring Minds to assess the employability of trained plumbers.

The study revealed that about one-third of total plumbers are unable to handle real-word plumbing situations and almost 40% of plumbers are unable to handle emergency health and safety situations. It was also found that as many as 33% plumbers showed lack of adaptation to new environments and managing customer situations with expectations mismatch. The study proves that training should focus more on real-world situation handling. More importantly, such figures derived from standardised assessments are of great benefit to skilling initiatives and are the key to successfully scale the quality and reach of the efforts.

Assessments and certifications are essential to solving many entrenched problems in the vocational skilling ecosystem. Hence, it is important to understand what makes a good certificate, especially because we are used to all kinds of certificates in this country.

The key to success in certifying blue collar skills and reaping the benefits in the long run is creating statistically-reliable and standardised assessments to do the same. Unfortunately, most efforts so far have been lacking scientific rigour and depth. We want every certified mechanic to be of a certain quality with high predictability. I certainly hope that as we leverage assessments and certifications as a backbone of the skilling ecosystem, much-needed attention is being given to the reliability, validity and standardisation of the assessments in a truly scientific manner.

We are all hoping to work towards creating a truly merit-driven labour market.

By Himanshu Aggarwal

The author is co-founder and CEO, Aspiring Minds, a global leader in job-skills credentialing and matching

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