Conundrum of India's demographic dividend

Pallav Sinha Posted online: Monday, Apr 14, 2014 at 0000 hrs
Our nation is poised to become the world’s youngest country by 2020, with an average age of 29 years. Coinciding with that event, India will account for 28% of the world’s workforce, according to a EY-FICCI report. India stands at a juncture where it can reap unprecedented economic benefits from this falling dependency ratio within the next few decades. However, while our country appears to be churning out hundreds of thousands of students every year who are educated and can fill new jobs, the reality is many of these youth are not ready for the jobs that new age industry is creating. Or they require substantial intervention from employers before they are anywhere near-ready. Bridging the skills deficit is a huge challenge.

Reports indicate that the vast talent pool of the country suffers from either not having the skills to be employable or, in many instances, not being able to signal their availability for jobs matching their skills due to an inefficient marketplace for jobs. This is especially true for blue-collar and low-end white-collar jobs.

Of the five million graduates, only 34% are readily employable, since most lack necessary skills required for any role in any industry, according to an assessment tests done by Wheebox-PeopleStrong in association with CII. Census data released in September 2013 indicated that 63.4% of India’s total population falls in the working age group. According to a study conducted by the National Skill Development Council (NSDC), 12.8 million join the workforce every year, who can be categorised as highly skilled, skilled, semi-skilled or unskilled, with majority falling in the last category. How this issue of employability is addressed will determine whether India eventually experiences a demographic dividend or a demographic nightmare.

According to another study by Aspiring Minds, 47% of graduates are not employable in any sector. Poor knowledge of English and inadequate computing skills are compounded by the absence of even basic domain knowledge for roles and industry that job-seekers hope to join. Learning by doing lies at the heart of making job-seekers better equipped for these jobs. Unfortunately, a vast majority of students prefer dead-end and non-value-adding graduate degree to vocational training.

A reorientation towards vocational training or introduction of strong aspects of “learning by doing” and soft skills in graduate programmes can remedy this situation. As an immediate response, the government is striving to achieve formal/informal skill development of the working population through various initiatives that employ fresh learning methods. Some initiatives like the NSDC, the National Human Resource Development (NHRD) and STAR (Standard Training Assessment & Reward) scheme have been initiated to boost skill development. Sector skill councils are also extremely vital enablers in standardising curriculum and training needs based on assessment of skill gaps by industry and role. Unless there is a well-defined and uniform pedagogy by training providers, the trust and confidence in vocational training and skill enhancement will be difficult to achieve.

The STAR scheme, for instance, has been formulated to encourage skill development for the youth by providing direct cash transfer on successful completion of approved training programmes. On successful assessment, the candidate is issued a certificate as well as a monetary reward of R10,000 to cover course fees.

Along with this, the private sector is also taking several initiatives to contribute effectively to the government’s endeavours. Companies and industry associations across business sectors are not only creating their in-house training facilities but are also taking steps to make potential employees job-ready before they join organisations.

However, it will not be totally wrong to say that a significant number of youth termed as ‘unemployable’ end up in this category because of their inability to signal their suitability to potential employers. Besides the efforts being made towards training them and arming them with better skills, it is also crucial to identify their existing skills and preferences and connect them to jobs that they are most suited for. Further, the inefficiencies of the job market and the absence of effective matching mechanisms is also an issue that needs to be addressed. The proliferation of mobiles and adoption of UID can make such a task and job registry a reality.

These initiatives will help job-seekers upgrade their profiles and extend opportunities for better livelihoods to the burgeoning workforce.

The author is founder & CEO of MeraJob India, an HR solutions company specialising in matching the job-seekers in the mass recruitment segment using data analytics and pre-screening