Key points:
- Apprenticeship programme can be a powerful hiring tool for employers
- India’s giants have been leveraging apprenticeships to tackle their skill gaps and talent pipeline
- Some key reforms will be required to augment the apprentice ecosystem in India
Even though India has a workforce of over 500 million, productivity remains a pressing issue in the country, as 56% of the workforce is either unskilled or inadequately skilled to meet the growing demands of the market, reveals a whitepaper titled ‘ROI on Apprenticeship 2021’ by National Employability Through Apprenticeship Programme (NETAP) from Teamlease Skills University. However, the study also indicates that this gap can be bridged through apprenticeship, as 60% of employers find that apprenticeship enhances productivity and 76% of them feel that it helps address attrition in the organisation.
The whitepaper published by NETAP also reveals that there has been a 22% hike in productivity gains from apprenticeships, which is a 5% increase from last year’s 16%. Plus, it shows apprenticeships to have higher productivity than people hired through other means and bring down hiring costs by 19%, which is significant because most organisations lack sufficient resources to recruit quality talent.
Apprenticeships can be a powerful tool for employers, offering them a competitive edge. Thoughtfully structured apprenticeship programmes can deliver much more than companies can imagine. Not only do they improve productivity but also lower attrition and hiring costs. Plus, they take less time to fill open positions, which is another advantage over other recruitment channels. Considering these benefits, it makes sense why some Indian giants, including Schindler India, source nearly half of their workforce through apprenticeships.
NETAP Vice President and Business Head Sumit Kumar said, “The war for talent is being won by employers who are reimagining their people supply chains, and this whitepaper suggests that offering apprenticeships is a powerful tool for this re-imagination.”
He further added, “Only 4% of the Indian labour force receives structured apprenticeships and less than 0.5% of enterprises have formal apprenticeship programmes. Structural reforms are required from a policy perspective to scale up apprenticeships and reach their true potential. Additionally, a shift is also needed in organisations’ mindset and practices.”
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Can apprenticeships make up for an alternative talent tool?
The whitepaper also made some interesting discoveries about using apprenticeships as an alternative talent sourcing model. It expounded upon the apprenticeships programmes leveraged by eight companies featuring Shindler India, Mahindra Finance, Proline, Ginger Hotels, Lotus Herbals, SKF India, Vikas Group, and Genpact.
Ginger Hotels opted for an apprenticeship when it observed a lingering skill gap in much of its freshly sourced talent. Apprenticeships programmes helped train their sourced talent and offered a significantly lower attrition rate.
Schindler India, a company that manufactures elevators and escalators, considers apprenticeships a contributor to its increased bottom line, low risk of accidents and reduced dependence on third-party subcontractors. Its two-year apprenticeship programme takes 300 applicants on a trip to reskilling, travelling over a multitude of skill terrains featuring English language efficiency, technical and safety training, and etiquette skills.
Lotus Herbals uses an internal evaluation tool to assess and monitor the candidates brought in via apprenticeships. For example, the total number of calls compared to total productive calls made was an evaluation test for working in customer handling. And depending on the results, improvement programmes came up.
SKF is a renowned automotive and industrial engineering solutions company struggling with a unique challenge. Since 2017, 40-45 employees, on average, have been retiring each year. The company needed a scalable workforce to keep operational flexibility; however, it was hesitant to source talent directly from the market. So, it started hiring a new apprentice for every retiring employee. This later turned out to be a win-win model for the company and the union, offering sustainability for both the business and employment, says the whitepaper.
Currently, the company has nearly 600 apprentices, and the young apprentices introduced a different perspective to the company’s work culture. There is also room for bringing women operators on the shop floor, which happens for the first time in any SKF factory in India.
All the companies that were studied have had their share of challenges. For example, Genpact, a global professional services firm, faced a few questions from freshers. The most common one was, why are we not being recruited directly as full-time employees?
To their surprise, they managed to provide a satisfactory answer. Plus, they provided numbers that demonstrate their commitment to ultimately bringing those freshers into the fold — 90% of all apprentices will get a permanent job in the company.
Considering how these companies manage to sail through their recruitment and workforce challenges, apprenticeship programmes can act as an alternative talent pool for many other companies facing similar issues. However, implementing structured programmes will always be key.
Employers are gearing up for apprenticeship programme as a primary skill development tool
Apprentices are now in a more favourable light. The new perception now views them as assets, contrary to how they were initially seen as mere “stopgaps” a few years ago. And it wouldn’t be surprising if more and more companies start capitalising on apprenticeships to improve productivity, address attrition, and reduce their hiring costs.
However, the paper also emphasises some key reforms to augment the apprentice ecosystem in the country. Furthermore, it recommends enforcing measures to expand industry participation, creating a flexible stipend structure for candidates applying for apprenticeships, and bringing equitable management practices to accelerate adoption.
While the whitepaper by NETAP —‘ROI on Apprenticeships 2021’—made some interesting revelations concerning apprenticeships in India, it’s up to the employers to understand how bringing more apprenticeships programmes can reduce the expanding skill gap and offer them numerous benefits apart from acting as an alternative talent pool.
References:
- Are apprentices making up an alternative talent pool? | Team Opportunities | December 15 2021
- 60% feel apprenticeship improves productivity, says paper | PTI | December 10, 2021
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