Corporate training buzz gets louder

Quality of spoken English worries BPOs

With the government pushing for more private participation in the corporate and vocational training space, bigwigs like the Manipal Group, Bharti Group and TeamLease, apart from international majors like the Pearson Group, have plunged into the $1.5-billion market. With high potential of returns, the past two years have seen a fair share of big-ticket entries and major investments in the space. Around six months ago, the Manipal Group, for instance, partnered with ICICI Bank to form ICICI Manipal Academy in Bangalore. The academy for probationers at ICICI Bank aims to bridge the gap between academics and industry. The group plans similar partnerships with other banks soon. In 2009, it had entered a joint venture initiative with City and Guild, UK, to form India Skills, a certification company. The group expects corporate education/training to contribute over 25% of its revenues in the next five years.

In 2009, the Bharti Group?s Centum Learning formed Centum WorkSkills India in a joint venture with National Skill Development Corporation (NSDC), one of the largest organised initiative by the government and the private sector to train 12 million people across 11 states in 383 districts by 2022. The institute offers services in three domains including corporate training, skills development and undergraduate and postgraduate courses.

Last year, staffing major TeamLease also entered vocational education and training business after acquiring Indian Institute of Job Training (IIJT). The company currently operates 155 training centres across 80 cities, with plans to increase the number of courses in the existing domains.

Last year, British media major Pearson acquired PurpleLeap, a training services firm that works with colleges. Pearson also has a joint venture with Educomp in IndiaCan, which aims to train over 500,000 people a year by 2012.

?We strongly believe that the entire education sector will attract a lot more investment and vocational training will be one of the leading segments after core education,? says Sandeep Aneja, founder and MD, Kaizen Private Equity, one of India?s PE funds focused on the education sector. ?All companies look for employable candidates and hence any institutes that consistently delivers quality training with industry-relevant skills will be well positioned to capture a very large market.?

According to the Kaizen Education Report, 2010, the corporate training market in India has grown at a compounded annual growth rate of 22% over the last four years. The government, through private entities and public-private partnerships (PPP), has also been playing a key role in making the sector lucrative for corporate players. Apart from setting up NSDC, it has also announced fiscal incentives including financial assistance for private participation in running industrial training institutes (ITIs), with a target of adding 1,000 new polytechnics in government/PPP and the private sector by 2012, notes a report by PricewaterhouseCoopers.

?The government of India has of late been promoting the cause of vocational training in a big way through various schemes that provide funding support to learners,? says Hari Menon, CEO, IndiaSkills. IndiaSkills has trained 5,300 students and has an order book of 26,000 trainees.

Companies like NIIT for IT training, Aptech Computer Education and Jetking for hardware and Frankfinn offering training in aviation and hospitality have also been operating on a large scale in the organised sector.

However, industry watchers feel that while the demand for training institutes is high, the requirement is varied and the challenge is to have quality institutions that can address specific needs of various sectors and corporates within these sectors.

?Today, the clear need is employability, but a single player cannot address the need. You need a holistic approach to this, a player who can align government funding, candidate aspirations and corporate requirements,? says Rajesh AR, business head, Irize. The HR services company, started by the Manipal Group earlier this year, has 20 centres across India, with plans to set 150 centres by the end of the year and 1,000 more in five years.

Industry observers feel that with the new emphasis on skills development, vocational training should get strong governmental support and corporate training will continue to see robust investments.

The crisis today for this industry is one of a trust issue. Experts say the vocational education sector in itself is facing a crisis in establishing legitimacy and acceptance on par with degree and higher education courses.

Due to this stigma, students are unwilling to take the plunge and pursue vocational courses on a regular basis. Industry watchers say that the scenario is slowly changing, with leading industry players recognising the benefits of procuring skills-certified candidates rather than the recruit-and-train strategy. ?When the industry begins to mandate skills certification for employees and allocates differential salary to skilled employees, the demand for a vocational or skills-based course will far surpass the demand of professional degrees and higher education courses,? says Menon of IndiaSkills.