Businesses are always under pressure to deliver value to their shareholders. They must regularly find ways to increase their top and bottom line, so investors stick with them. To achieve the latter, meaning to increase profits, companies often have no resort but to lay off a portion of their workforce.
Freshers, especially those with fewer skills, are more susceptible than those with a better understanding of the role. Recent developments in the industry back it up.
In a public statement, an Indian IT (Information Technology) major highlighted their reasons for the decision pf laying off hundreds of their freshers. They explained that they expect entry-level employees to have specific skills and know business objectives and client expectations.
While such decisions are disheartening, it is hard to blame companies. Achieving business goals and delivering returns to shareholders is their number one priority.
But freshers shouldn’t be blamed either. The transition from university to corporate life is far from easy, especially in India, where university courses aren’t exactly hands-on. Unlike college students, employees are accountable for their work every day and must display moral integrity and reliability.
Apprenticeship is a possible solution to this gaping problem in India. The practice can make freshers more adept at understanding their work, teach them vital industry skills, and improve employee efficiency for businesses.
What is an Apprenticeship?
Apprenticeship is an on-the-job training program where apprentices are trained for a specific skill under a mentor or supervisor. Working in a company for a year or more, apprentices are trained in a particular role in great detail.
The role aligns with the apprentice’s interest and helps them gain valuable experience whilst still learning their role. Once they’re done with training, apprentices are more likely to get a job placement than those with any experience.
As far as apprenticeship vs internship is concerned, unlike interns, apprentices also earn money during their training. It helps them stay motivated to master their role in order to join the organisation as a trained employee at the end of their apprenticeship.
Meanwhile, organisations also benefit from apprenticeships. After apprentices are done with their training, they join the workforce as well-trained employees and are incredibly productive. Also, apprentices who turn into employees have a sense of loyalty. They stay around for longer, decreasing attrition and saving the company time and effort.
Apprenticeship in India
Although India passed the Apprenticeship Act in 1961 to protect apprentices and promote the practice, the exercise hasn’t taken off as it should have.
The number of apprentices in India was 0.9 lakhs in 2014-15. It jumped to five lakhs in 2021-22, which signifies growth but at an alarmingly slow pace. With the highest youth population in the world, India should have registered a much bigger rise in apprentices since 2014.
The country can take a cue from Germany and the United Kingdom (UK). 4% of the workforce is engaged in apprenticeship in Germany, while 1.7% of the working population in the UK work as apprentices. The number is just 0.1% in India.
Enterprises, Perception and Pay
It is often easier for developed nations to integrate new programs into their system. A larger formal sector than emerging countries like India gives developed nations the platform to promote apprenticeship and similar programs.
India may be the fastest-growing economy in the world, but most of its workforce still works in the informal sector. The Periodic Labour Force Survey 2017-18 noted that of the 466 million workers in India, a whopping 375 million or 80.47%, were engaged in the informal sector.
It is a huge problem as enterprises part of the informal sector do not have the system or the means to offer paid training to apprentices.
The formal sector can do so, but the number of Indians working in larger formal sector organisations is also low. Of the 90 million individuals working in the formal sector in India, less than 20 million work in companies with 30 or more employers. Also, just 1.4% of the 5.85 crore enterprises in the country have more than nine employees.
Some Important Comparisons
Compare that to Germany, where more than 20% of the 2.1 million registered companies have at least 10 employees. Meanwhile, over 20% of the 2.1 million firms offer an apprenticeship in Germany, with enterprises having more than 500 employees employing 81.3% of the total apprentices in the country.
The numbers clearly signify that larger enterprises should promote apprenticeship. They have more capital and resources to provide training to apprentices than Micro, Small & Medium Enterprises (MSMEs), which constitute a large portion of the country’s registered establishments.
MSMEs and the formal sector in India are also unable to justify the economic sense of apprenticeship. They run on thin margins, and unlike large organisations, every rupee is crucial for their survival.
They also do not have massive cash on their books. As a result, funding an apprenticeship program from start to end doesn’t fit their unit economics. They’re unable to pay apprentices an average of 80% of the wages of semi-skilled labour, an amount relatively low compared to other countries.
Apprentices receive a stipend of 20-50% of the wages of skilled workers in several Western nations like Germany and Switzerland.
The Way Forward
India’s future rests on the shoulders of its youth. However, according to a 2019 report, 47% of the Indian youth won’t have the right skills for employment by 2030.
Fortunately, the government understands the problem. The National Education Policy (NEP), 2020 and the National Credit Framework (NCrF) of India, 2022, are launched to increase employability and address the talent shortage in various industries.
Apprenticeships must receive a similar focus, especially if India must achieve the goal of raising apprenticeship opportunities to 60 lakhs by 2026. The program has proven its worth throughout Western nations and is key to increasing employability and growing the size of enterprises in India.
Smile Foundation and Apprenticeship
Smile Foundation more than realises the important of a dynamic and skilled workforce. India with its young demographic is one of the biggest contenders to lead the world economy in the coming decades.
With our livelihood initiative, STeP or the Smile Twin e-Learning Programme, the youth from the disadvantaged sections of the community are trained to make them completely skilled and ready for the workforce.