Skill, Labour, Talent for MSMEs: The micro, small and medium enterprises can leverage apprentices to create a talent pipeline for their business. Small businesses often can’t hire top talent because of their inability to offer fat pay cheques to potential hires. However, in apprentices they have an opportunity to create home grown talent that is extremely affordable and also tailor made, said, Rituparna Chakraborty, co-founder of apprenticeship training company TeamLease Degree Apprenticeship.

Chakraborty was speaking to FEAspire at the launch of a research report, ‘Reimagining Employability for the 21st-century – 10 Million Apprentices in 10 Years’, prepared jointly by TeamLease and job research institute Just Jobs Network. 

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The micro, small and medium enterprises (MSMEs) in India alone have a potential to generate 2.5 million apprentices alone if each firm engages at least one apprentice, said the report. According to The Sixth Economic Census estimates that there are approximately 26,30,000 MSMEs in the country with five or more workers. 

While 99 per cent of the firms in India are in the unorganised sector, the potential to tap apprentices is huge. Currently, the Apprenticeship Act is applicable for firms with more than 30 employees and hence, most of the MSMEs are outside its fold.  

Chakraborty said, “Unemployment rate in India went from 2.3% in 2009 to 5.8% in 2018 and youth employment rate is at 12.9%….Apprenticeships have emerged as an enterprising and promising solution which is truly augmenting the employability landscape in India. However with our current base of mere 500,000 apprentices, we have barely reached our true potential”.

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The report stated if MSMEs have 10% of their workforce as apprentices,  there would be a trained workforce of about 8.5 million youth and hiring 15% would generate a 12.7 million industry-ready workforce. 

Sabina Dewan, founder and executive director of JustJobs,  highlighted the importance of offering stipend to apprentices considering almost 47% of the population is educated up to 8th grade or less and has a family dependent on them.Youth from socio-economically disadvantaged backgrounds face pressure to earn as they learn. Apprenticeships can help address this need.”

According to official data, the Indian government provides a monthly stipend of Rs 1,500 to the registered apprentices. Nevertheless, a major section of the 1.9 lakh apprentices engaged in the private sector are deprived of the benefit due to lack of information and awareness among the MSMEs.

She said, “Both employees and employers find on-the-job learning more effective than prior skill training as it is seen that the latter does not align with the demands of the job market. Learning while doing establishes a real-time feedback loop between employers and potential hires, ensuring the youths are skilled in tasks and techniques that are in demand.”” 

The report suggested emulating the Australian model of apprenticeship that supports MSMEs and prioritizes the STEM sector (Science, Technology, Engineering and Maths). Even a one-stop virtual platform that offers the apprentices and youths the required support payments and mentorship can be beneficial. 

The Government of India can bring all apprenticeship programmes under National Apprenticeship Training Scheme (NATS), National Apprenticeship Promotion Scheme (NAPS) and National Skill Development Corporation (NSDC) under one umbrella and provide a uniform stipend across the categories, stated Dewan.