More SMEs look to hire apprentices in second half of 2021 after battling labour crisis amid Covid

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September 09, 2021 2:59 PM

Skill, Labour, and Talent for MSMEs: The government had launched the National Apprenticeship Promotion Scheme (NAPS) back in August 2016 to provide stipend support and share the cost of basic training with a cumulative target of training 50 lakh youth between FY17 and FY20. Till February 25, 2020, there were only 8.16 lakh beneficiaries under NAPS.

offices reopens36 per cent medium and 24 per cent small businesses considered their apprentices to be only 'fairly productive'.

Skill, Labour, and Talent for MSMEs: As the apprenticeship model gains significance amid businesses to bridge skill-gap in the workforce and develop youth through on-job training, more small businesses are looking to hire apprentices in the current half of 2021. The net apprenticeship outlook (NAO), a forecast for apprentice hiring among the proportion of employers, increased 15 per cent for small businesses from 8 per cent during the first half of 2021 to 23 per cent for the second half while 42 per cent medium businesses were looking to hire apprentices in H2 2021, up 5 per cent from 37 per cent in H1. The outlook among large businesses also increased by 10 per cent as 60 per cent enterprises were seeking apprentices in the current half in comparison to 50 per cent in the preceding half.

The forecast was based on a survey involving 833 respondents across business sizes by TeamLease Skills University’s National Employability Through Apprenticeship Programme (NETAP) for H2. “Primarily large enterprises continue to do it (apprentice hiring) but it does motivate SMEs as well because they have seen some success in the past and there have been some references as well that are at least encouraging for them to try this model. So, the intent is definitely there among SMEs,” Sumit Kumar, Vice President – NETAP, TeamLease Skill University told Financial Express Online.

Also, as there was major labour migration and labour crunch in the market last year due to Covid, the whole aspect of businesses resorting to hiring local people, training, and skilling them gained significance to make them productive, Kumar added. “Hence, they utilised apprenticeship last year which has been a tried and tested model. While that was a compulsion in the beginning but businesses are now getting used to it to create talent locally.”

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In terms of businesses’ perception of productivity of their apprentices, while a majority of large businesses (48 per cent) perceived their apprentices to be ‘very productive’, 36 per cent medium and 24 per cent small businesses considered their apprentices to be only ‘fairly productive’, according to the study. “From the payment point of view, the model still becomes viable because we get a lot of subsidies from the government on the training and stipend that is paid to apprentices. So, it is not commercially unviable for the small sector,” noted Kumar.

Importantly, the government had launched the National Apprenticeship Promotion Scheme (NAPS) back in August 2016 to provide stipend support and share the cost of basic training with a cumulative target of training 50 lakh youth between FY17 and FY20. Till February 25, 2020, there were only 8.16 lakh beneficiaries under NAPS, according to the official data. Between FY20 and FY21, a total of Rs 124.83 crore was disbursed across states and union territories.

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