Late last month, Larsen &Toubro group (L&T) chairman and managing director SN Subrahmanyan expressed concern at the shortage of 45,000 workers and engineers at his company. The L&T chief isn’t the only one fretting, other corporate chieftains too are worried. Sougata Roy Choudhury, ED (Skills, AI, AR) at the Confederation of Indian Industry (CII), estimates the total workforce in the organised sector at about 50 million and the shortfall at 15%. Ranen Banerjee, Partner, PWC, however, believes it could be as high as 30-40%.
With a view to skilling more workers, the government has now come forward to support internship at the top 500 firms. These firms will train 10 million workers, for a year, over five years. The government will pay the interns Rs 5,000 per month and an upfront amount Rs 6,000, a sum that Banerjee feels will come in handy because training can be expensive.
Prima facie the plan looks good according to Manish Sabharwal, vice chairman of Teamlease Services, who points out that Germany has interns or apprentices equal to 2.7% of its labour force. “If we had the same ratio, we would have had 15 million but we have less than a million interns at the moment. The scheme may not ultimately end up skilling 10 million workers because it is voluntary. The target is ambitious given that to hit 10 million in five years each of these companies would need to train 4,000 workers a year. While 3 million will intern in the first phase, the rest will do so in the second phase. Nonetheless, it’s a good effort and Sitaram Kandi, CHRO, Tata Motors believes the stiff timelines and targets set a promising challenge.
To incentivise companies, a tenth of the expenses that companies incur on the training and salary can be part of their CSR (Corporate Social Responsibility) outlay. Some experts believe a larger share maybe 25% of the expenses could have been allowed as CSR. They also worry that companies might not skill additional numbers; they would merely substitute interns they would normally have taken on with those via the scheme.These concerns apart, CII’s Roy Choudhury says the curriculum should be structured well with a periodic assessment of candidates.
“The candidates will be issued certificates post the completion of their training,” he said. The scheme will allow companies to select candidates from a list put up on a portal to which there will be open access; a “negative list” of IITs, IIMs and CAs, in addition to income filters, will be put up. Whether companies would be able to attract suitable candidates is a question. As Kandi point outs, at 21, a potential candidate would probably have graduated and have higher aspirations. “He may not want to join a programme at a stipend of Rs 5,000. So, the companies may need to supplement this amount to make it attractive,” he said. However, the scheme opens the door for many in tier-II and III cities who would not normally have access to the top 500 companies. Also, many companies have stopped paying interns post-Covid. “If there’s an incentive, the private sector will be motivated to pick up interns,” said the head of HR services firm.
The skew, according to Akshay Munjal, founder and CEO of Hero Vired, an up-skilling start up, could be towards manufacturing where there is a larger pool of jobs and the capacity to absorb more numbers. “IT services would call for engineering degrees,” Munjal said. Experts said that the size of the scheme and the filters being used can help correct some of the market distortions. It opens the door for millions of people from tier-II and tier-III cities who don’t usually have access to job opportunities in top 500 companies. Also, many companies have stopped paying interns post-Covid. “The scheme reduces the financial burden on companies,” said Sekhar Garisa, CEO of foundit, a talent platform.
Even though the internship scheme is voluntary and the financial support from the government would not be enough to cover the expenses of an intern, companies might nonetheless take on some candidates who appear promising. Unfortunately workers in India today lack the necessary skill-sets because of the lack of training facilities. As Tarun Baijnath, partner at Grant Thornton, says, typically, blue-collar workers trained in ITIs (industrial training institutes) or similar institutes are absorbed by MSMEs or micro, small and medium enterprises where the chances of their upskilling are far. Moreover, as Tata Motor’s Kandi, points out, some of the ITIs are not in good shape.
“The laboratories have not been modernised in years,” he said. For the workers, therefore, it would be a good opportunity, as Baijnath, notes. They would be working in blue-chip companies and in a top-class environment which they might otherwise not have access to.Namita Gautam, chairperson at ITI, New Delhi, believes the scheme could change the mindsets of individuals training at ITIs. “They normally find government jobs, but this could potentially change their aspirations,” Gautam said.
As a longer term plan to boost skilling, Kandi suggests companies could each adopt an ITI and upgrade the facilities. “Upgrading them and the curriculum purposefully to impart future ready skills will be a good start,” he told FE. Maruti Suzuki has tied up with over 100 ITIs across the country to plug the gap between its requirements and the available skills. Many more need to take such initiatives.