In the next decade, India will have a surplus labour force of 4-5 crore. India can bridge the global labour shortage if the youth are imparted the right skill sets — Prime Minister Modi said while launching the Skill India initiative in July 2015. He said if China is the world’s ‘Factory’, India should be the world’s ‘Skill Capital’. Where are we against this objective in 2018? In my opinion, it is yet to take off because we have adopted a wrong approach. Here, I examine the reasons and propose a new approach to make it happen.
Simple. We cannot create enough jobs every year for the 18 million people who are looking for non-farm jobs, including 12 million fresh youth joining the workforce on attaining the working age and over 6 million migrating from agriculture. Against this demand, we have created 2-4 million jobs a year. The Economic Survey 2018 forecast that India will add 7 million jobs in 2017-18. Even if we create 7 million jobs per year, we are still short by 11 million. So we have no choice but to export manpower.
Why Others Will Welcome
Simple. Demographics of the ageing population and changing dynamics of skill requirements. Traditionally, the Middle East and Africa are the destinations for Indian youth. Many new countries like Japan, EU, Germany, Australia and South America are ageing and are also not able to attract youth to certain skilled occupations due to poor employment terms. Even robots cannot kill the demand for these occupations in the next 10 years. So, these countries will have to relax their visa norms to attract foreign workers.
Japan, which is hosting 2020 Olympics, will need skilled manpower in areas such as construction and hospitality. It will amend its visa regime to allow foreign labour and over one lakh Indians are expected to be a part of the skilled workforce for the Games. Some 10,000 young workers from India will arrive in Tokyo soon under the Skill Development Ministry’s Technical Intern Training Programme with Japan’s International Training Cooperation Organisation. This is in addition to the workforce required to meet the on-going demand for people in certain occupations.
The current strategy is to identify youth, skill them and export them ‘as is – where is’.
Many States have created government organisations (not PPP) to source and even train workforce prior to departure. They even provide consular support in the ‘destination’ country.
Unfortunately, this is not working because of three reasons:
• Government cannot operate with the agility of a private enterprise
• Current focus is on freshly trained skilled workmen whereas the demand is for experienced and globally certified workmen. Japanese apprenticeship model is very rare
• Role of export agent ends when a migrant worker lands in the ‘destination’ county and critical support system during the migrant’s tenure is absent
Is there another approach? Yes. Let me present my bi-focal model. In this model, skill training is divided into two phases — a short, customised training for domestic employability for freshers and a second phase, which will be long and lead to global skills certification programme for experienced workmen. India should export workmen after the second phase who will be replenished by workmen coming out of the first phase.
- Domestic Employability Phase (Ph I)
Here the employer drives curriculum, quality norms and certification, pre-assessment and guarantees a job on course completion. Training will be short, since it will be customised for a single employer and a single job role. The training pedagogy will be focused on producing day one productive people. Employer must pay for sourcing and training costs while student should invest for his stay and living costs. Employer can claim refund for the costs from the government after a 90-day retention.
The government will provide subsidised accommodation by setting up (in PPP) working men/women hostels and expense support for first work month.
- Global Skilling Phase (Ph II)
In this, sector skill councils will drive and define global skill standards. Training will be for over two years in eight quarters, for global certifications, in two or three stages. Employee pay hikes will be linked to sector skill council certification stages achieved during the two years. Skilled workforce will also be trained in English or one other foreign language essential for migration along with global skills in these two years.
Any skilled and experienced (with minimum two years of work experience) employee has the option to sign for the Phase 2 of the programme and must meet the pre-qualification criteria. Training will happen on employer premises or at the nearest global ITI centre. Government must invest in capital expenditure required for training and senior employees will be trainers. Employee and government will share the training costs. Employer will first pay for the training and claim the government share through skill refunds.
These two-phase solution requires a manpower export agency (see graphics for criteria). Besides, to implement the model, India will have to create an International Engineering Skills Staffing Agency (IESSA) exclusively for engineering skills workmen (see graphics on contours).
- Is IESSA workable?
Yes. India’s success in IT industry is due to TCS, which commenced as an onsite staffing agency for IT roles — crudely called ‘body shopping’ in the late 80s. Later, others like Infosys, Wipro and HCL mastered the art. Market valuation of TCS stood at Rs 6 lakh crore ($90 billion) in Jan 2018. IESSA valuation will also reach a billion dollar within 10 years and provide a handsome exit to investors.
- IESSA for non-IT skills
We can replicate the IESSA model for skills in engineering, construction and services sectors like hospitality. Indian workforce has a great track record in the Middle East and hence migration or working outside India is not only socially acceptable but also preferred.
Two other things that must be done to implement the bi-focal model:
• Bi-lateral country level agreements: Government of India needs to negotiate with global skilled workforce programme/temp-migration through ILO and enable multilateral and country-to-country agreements to export manpower after Phase II training
• Large corporates must participate: They must join as investors and sign up for Phase II. The government can sign up a large number of big and MSME employers for this programme. The biggest benefit for the employers is salary capping. For example, if all workmen in a skillset after three years’ exit after Phase II to IESSA and the exiting employees are replaced with entry-level fresh employees coming out of Phase I, then the salary of workmen will remain capped. This will make the employer more competitive. Unionisation issues will be minimised due to low residency of the workforce.
The government must move quickly if it wants India to become the skill capital of the world.
(The author is Chairman – TMI Group; participant – Global Forum for Migration & Development)