Category: Sustainable Livelihoods

With an aim to convert the corporate social responsibility, STFC adopted an impact lens for the same sector their financial products and services are aimed at – transportation and logistics. Mobilizing resources to bridge the skill gap in the industry, STFC trained more than 35,000+ people across India to become skilled commercial drivers. 

The STFC Story

STFC was set up with the objective of offering the common man a host of products and services that would be helpful to him on his path to prosperity. Over the last few years, while their financial products and solutions did help the logistics and transportation industry, a host of external factors adversely affected the number and quality of truck drivers – the primary human capital.

All these factors have contributed to reduce the desirability of truck driving as a profession and created a shortage of skilled drivers in the country. About 28% of the 8.5 million trucks in the country are currently idle, with the shortage projected to rise to about 50% by 2022. To address the shortage of skilled commercial vehicle drivers and create dignified working opportunities for them in other segments, STFC and Samhita curated a flagship program that aims to augment livelihoods through vocational and skill training.

IMPACT ACROSS THE PEOPLE, PLANET, PROFIT (PPP) FRAMEWORK

HOW WE IMPACTED 3,500+ LIVES

We designed a skill training program that provided commercial driver training for Light Motor Vehicles and Heavy Motor Vehicles to candidates across geographies with a focus on including women candidates and candidates from marginalized communities. 

The program included technical and practical components such as stimulator driver training, driving track practice as well as life skills and wellness training components such as on-the-road yoga exercises.

We designed the end-to-end journey of the candidates right from mobilization and training to placement and post-placement tracking. 

To ensure effective delivery, we identified suitable implementation partners, designed processes and developed a monitoring and evaluation framework that included success metrics. From the get – go, the program was designed with a pay-for-performance model with the key performance metric being placement of candidates at the end of the training period.

At each step in the training lifecycle, Samhita introduced enhancements such as targeted mobilization of candidates, capacity building of on-ground partners, life skills and wellness training, simulator training at state-of-the-art facilities, official certification, placement support and post placement tracking of upto one year to improve adaptability and reduce attrition.

PROJECT REACH

Samhita managed the end-to-end program for STFC ensuring standard implementation and working with 5 partners across 10 centres in 6 states.

Project Outcome

What companies need to keep in mind to ensure that their skilling programs are effective and impactful.

According to Labour Bureau of the Government of India, 90% of the 450 million jobs in India require vocational skills. And right now only 10% of the workforce receive any kind of vocational training at all, formal or informal.[1]

Compare India’s present scenario to those living in developed countries, where 75% undergo formal skill training and it’s clear that we need to do a lot of catching up.

The Skill India Mission presents a unique opportunity for companies to leverage their core business competencies and contribute to skilling India. Part I of this series on Livelihoods and Skill Development, discussed why it is critical for companies to align with the Mission and join together in a concerted effort to close the skills gap in the country’s labour force.

In Part II, we look at what companies need to keep in mind when implementing training programs as part of the Skill India Mission.

The Mission is a new opportunity for companies as it is different from past efforts by the government in a number of ways. Most critically it has consolidated the skilling effort in India by replacing the 20-odd ministries that were previously engaged with training programs with one focused and central Ministry for Skill Development and Entrepreneurship (MSDE). The MSDE has its own budget and is mandated to drive skill development efforts in the country, by co-ordinating the programs of State Governments and other Ministries. The MSDE also collaborates with companies in the private sector, developing frameworks for vocational and technical training and planning for skills that may be required in the future.

The Skill India Mission prioritizes aspects of skilling that were previously ignored, like the recognition of prior experience and entrepreneurship skills. Rajesh Kaimal, Business Head of Manipal City and Guilds, an education service provider that trains and certifies people across the country, points out that under the new initiative, “there is a special focus on RPL (Recognition of Prior Learning), which is a drive to recognise people who are already well-versed in a trade but don’t have any formal certification.” Under the PMKVY, a scheme under the MSDE, there is an equal emphasis on RPL skill training programs. Out of the 24 lakh (2.4 million) people that the scheme aims to train each year, 12 lakh (1.2 million) has been earmarked for training and assessment and 12 lakh for the recognition of prior learning.

Praveen Aggarwal, the Chief Operating Officer of Swades – a foundation that focuses on creating livelihood opportunities for rural populations – commended the creation of a separate policy to encourage entrepreneurship.

Under the mandate, the MSDE is directed to make entrepreneurship aspirational and encourage it as a viable career option through advocacy, create support networks for potential entrepreneurs and promote entrepreneurship amongst women. Mr. Aggarwal believed that an equal focus on entrepreneurship skills is especially critical for rural areas and saw this as a good move by the Indian Government.

Getting it right

With the government making a strategic effort to create a skilled workforce and prioritizing skill development initiatives, it is critical that companies also get on board and invest in effective programs. Conducting one-off trainings or failing to link them to jobs may not significantly improve the prospects of those seeking work. From our conversations with a number of companies and implementation agencies in India, we have developed some guidelines that companies may find helpful when developing and executing their skilling programs.

Adopt a lifecycle approach

Like any other intervention in the social sector, in order to achieve long-term impact, companies need to adopt a lifecycle approach to skill development. This means designing programs that look at every aspect of skilling communities and includes mapping the skills and aspirations of a community before training, conducting training that is based on the findings of the skill mapping, connecting trainees to employment opportunities after the training and following up with them after employment. One of the programs that Swades conducts adopts this approach. Apart from the activities listed here, Swades conducts an intensive follow up with their trainees. Once placed in employment Swades tracked the progress of their trainees for 2 years. In the first year tracking occurred on a monthly basis in order to provide ‘hand-holding’ and get them accustomed to an office environment. In the second year, follow-ups were reduced to quarterly intervals. Praveen Aggarwal says that the reason Swades does this is, “to see how they are progressing in their careers and if they leave their jobs, why are they doing this etc.”

Following up with newly employed trainees is especially critical as it can result in significantly reducing the number of people leaving their jobs because of being unable to cope with new work environments.

Match skills to aspirations

Training programs need to keep in mind the marketability of skills received at the end of the course and match them to individual aspirations and desires in order for them to be impactful. Training that is not linked to careers that people want, is a waste of resources on both sides of the equation. A good way to ensure the relevance of training is by mapping skills according to both market needs and local capabilities.

This approach ensures the expectations and requirements of a particular community are met and provides guidelines on what kind of training is needed. Swades ensures that their training is consistently effective by, “giving (people) a bouquet of choices, empowering them with a sense of decision making – of what they can do with their lives, (and) creating aspirations.” Mr. Aggarwal went on to say that attempting to meet the needs of communities and advising them against potentially less-viable career paths, is a fine balancing act.

Transferrable skills: Providing communities with transferrable skills is also useful as it builds competence in areas required for most jobs. Transferrable skills include communication and analytical skills, decision-making abilities, team work, writing and reporting skills and other similar skills. For semi-urban and rural populations, such skills are especially useful as most have never been in an office environment. In their training on transferable skills, Swades includes aspects like how to dress appropriately for different types of employment, basic computer literacy, personal hygiene, interview skills, tackling work under pressure, dealing with superiors, reporting procedures and other useful information.

Connecting skills to the market

Providing market-relevant skills to communities should be a key focus area for companies. Without a link to market demands, skill training become redundant. Kalyan Chakravathy from PanIIT Alumni Reach for India (PARFI), a social enterprise that conducts skill training across India, spoke about how they link training to market needs by engaging with CSR, “(While) we work on an institutionalized, long-term, investment-heavy model, it does not mean that we are not consistent with the market. We are very demand-focused (and) update that demand through investment. That’s where CSR comes into the picture. Many of our schools are funded by companies.” PARFI’s skilling model is a loan-based training model which engages companies to provide employment opportunities and gives 100% placement to trainees after their courses. Mr. Chakravarthy said that placements were assured, “because we first sign up the employer and then set up the training.” With companies providing an input on what skills are needed, PARFI is able to conduct training that is relevant and can enhance the career prospects of trainees after the course.

The Value of Skills

If the courses or training that people receive are not recognised as valuable to their personal economic growth, for example by enabling individuals to achieve a higher salary or a better job, then there is very little incentive for them to take part in the program. If a watchman who has been trained under the skilling program subsequently receives the same salary as someone who is not trained, then what value has it added to his personal situation? Linking skill training to market needs is critical but companies must also ensure that this training will add value to the overall career prospects of beneficiaries.

Currently, training institutes across India are seen negatively as purely manpower sourcing agencies and this needs to change.

The Swades Foundation tackles this issue by working with select partners and social enterprises who they identify as having an understanding of a specific market. They connect their training to those who have demand for particular skills. PARFI works on a sustainable vocational training model that is loan-driven. The system, although charging trainees a fee, works well as it encourages only those genuinely interested to take part. The fee also ensures a high standard of quality and active participation from trainees, contributing to the overall sustainability of the program – and giving an impetus to social entrepreneurship as a whole.

Many government-sponsored skilling programs see high turnouts but do not necessarily have an impact on workforce skilling levels because they are free and are available to anyone, whether interested in a particular course or not. In general trainees tend not to attach much value to training that is paid for by the government. In the education field in India, people willingly pay more to be taught privately despite the considerable financial constraints this may place on them and their families. But they are prepared to do this because more often than not, the qualification they receive from a private institution will lead to more opportunities and a better standard of living.

The skilling centres of the future should be structured in such a way that the quality of their training is perceived as highly desirable and consequently valued by both potential trainees and future employers.

Focus on Entrepreneurship

Another way to look at the economic development of communities, especially those in rural areas, is through increased entrepreneurship. In 2013-14, agriculture employed 54% of the workforce in India but only contributed to 17% of the GDP[2]. In such a context, where the supply of labour outweighs demand by a large margin, finding new means of employment can be critical.

Providing rural communities with entrepreneurship skills and helping them start cottage industries or small businesses could work to supplement existing income and create local employment for many who would otherwise be forced to migrate to cities. Swades looks at building the entrepreneurship ecosystem by enabling entrepreneurs to create their own value chains. For companies, entrepreneurship programs are trickier as they need to establish connections to the market in order to provide entrepreneurs with a space to sell their products. Before implementing such programs it is important that companies ensure that implementation partners have a connection to the market and a clear exit strategy that enables the local community to continue work once the program has ended. Swades’ Praveen Aggarwal continued, “We are trying to create an entrepreneurship ecosystem. We manage the entire process…including providing entrepreneurship skills, how to understand your market, profit and loss, how to keep your account books…”

The added focus on entrepreneurship by the MSDE also presents a way for companies to leverage the entrepreneurship policy (see above) and engage with such programs.

Systemic Problems

One of the challenges of the current vocational training system is the lack of proper exit mechanisms for students of such programs. Rajesh Kaimal, Manipal City & Guilds (MCG), talks about the challenges of this situation, “a student who is on an engineering or an ITI course, should be able to exit after 1 or 2 semesters. [They should be able to] get a vocational education, get a certificate and then at some point take those credits and return to the formal education system and vice-versa. Most students drop out in-between, because courses last 3-4 years and they are unable to complete them because of family pressures or financial difficulties. If a student has done 2 years of a 3 year course and he leaves, he has nothing to show in terms of a qualification. For example – he might do the first year of a masonry course and if he leaves, he has nothing to show in the job market. There needs to be a an officially recognised certificate saying that he is qualified to do something at each step – since there are certain levels to all skills. Today there is no such mechanism and most ITI’s fail today because their students don’t continue.”

Education vs. Experience

When hiring, companies need to look at the value of vocational programs and the experience of applicants rather than exclusively match jobs to the highest level of education they have received (See above). MCG’s Rajesh Kaimal continues, “corporates should recognise that they need skilled people and not (just) educated people and should understand what they want. Is it skills and experience that you require or is it education and a paper degree that you are looking at?” This is a choice that needs to be made wisely by companies. To further illustrate the point, he talked about the fact that former specialized soldiers from the army have been employed as sweepers on the railways, despite having 15 years of experience, and considerable mechanical skills developed by fixing battle tanks. This happens quite often because many join the army straight out of school and consequently do not possess more than a 10^th or 12^th standard pass certificate. Historically all appointments on the railways have been dictated by an individual’s level of education.

Moving forward: A Vision for Skill Development

The announcement of the new plan for training and skill development is an opportunity that should encourage companies, investors, implementation agencies and potential beneficiaries to rethink traditional approaches to skilling. Even if the aggressive targets for skilling aren’t met, it will be important to ensure that those who pass through programs are trained well and given valuable skills that they can use in the market. It would be a flawed methodology to define the success of future training courses by the number of people being skilled, rather than potential employment outcome. Training people will have little value if they are not ultimately able to find better jobs, earn decent salaries or work in the sector and profile they were trained for – none of which can be achieved without the active involvement of players that dictate demand for skilled labour – namely companies. Why? It is companies that set trends, create demand for specific skills and subsequently understand what is needed for the future as they shape market demand. We need to invest in delivering market-driven skills to the public which will ultimately contribute to the long-term growth and development of the country.

About the contributors:

Praveen Aggarwal, Chief Operating Officer, Swades, a foundation that focuses on creating livelihood opportunities for rural populations across India.

Kalyan Chakravarthy, Executive Director at the PanIIT Alumni Reach for India Foundation (PARFI), a not-for-profit registered society of IIT alumni committed to execute and scale self-sustainable business models that enhance incomes of the underprivileged sections leveraging PanIIT and other like minded networks.

Rajesh Kaimal, Business Head, Manipal City and Guilds, a joint venture between Manipal Education and City & Guilds, UK that trains and certifies people across the country.

Luis Miranda, Director at Samhita Social Ventures and Founder & ex-President, IDFC Private Equity

[1] http://www.tradingeconomics.com/india/gdp-from-agriculture

[2] http://www.tsmg.com/download/article/Skilling%20India%20final.pdf

A look at how companies can align their CSR strategies to the Government’s Skill India Mission, increase programmatic impact and invigorate the economic well-being of India’s unskilled and unemployed workforce.

The announcement of the Skill India Mission on the 15^th of July 2015, a Government initiative that aims to train 500 million people by 2022 in different skills, created a high level of expectation from corporate India, implementation agencies and the individuals who badly need those skills. For many, the Government’s drive to skill India couldn’t have come at a better time.

In 2020, India is set to experience a ‘demographic dividend’ where 65% of the population will be under the age of 35[1], which will give the country the unique advantage of having one of the world’s youngest populations.

However, this is only an advantage if new entrants to the workforce are properly trained and given access to skilled employment opportunities. The National Sample Survey currently estimates that of the 470 million people of working age in India, only 10% receive any kind of training at all[2].

While many believe that the Mission could potentially close this gap and help meet the Indian Government’s ambitious target of skilling 550 million people by 2022[3]; translating these expectations into action is a significant challenge that can’t be overestimated.

The National Skill Development Corporation (NSDC) has identified over 24 high-growth sectors for which people need to be skilled. Of these manufacturing, textile, construction, automotive, retail, healthcare and transportation are expected to witness the highest growth. Companies operating within these sectors stand to gain from investing in skill development as they can strategically align with the Mission to train workers with skills that are needed in their respective sectors.

To harness the country’s 2020 demographic dividend and move a step closer to making India ‘the human resource capital of the world[4],’ there will need to be a concerted effort from multiple stakeholders across the livelihood ecosystem – within which companies will need to play an integral part.

Setting standardized benchmarks for skilling

While the Indian Government has instituted a number of constructive policy measures under the Skill India mission and allocated Rs. 5,040 crore (770 million USD) to skilling programs[5], it has failed to do something fundamental – and that is to define what a ‘skill’ in this context is.

This is problematic for a number of reasons. People are considered to be ‘skilled’ whether they have taken part in training that involves short 2 day workshops, or extensive 3 year courses. Without setting standard benchmarks for different skills taught, which include the nature of the training, the duration and depth of courses and a mechanism to measure the program’s success – any future statistics on the number of skilled workers created as a result of this initiative will have significantly reduced value.

Furthermore it is important to have appropriate levels of training for appropriate skills which will be critical for the effective implementation of programs.

Skill development ≠ livelihoods

The widely accepted definition of livelihoods, developed by Chambers and Conway, reads as follows, “a livelihood comprises the capabilities, assets (including both material and social resources) and activities required for a means of living.” Livelihood interventions therefore aim to build the social, physical and financial capital and capacity of people with the aim of bettering their employability or income generation prospects.

Skilling programs, on the other hand, are concentrated on building the capacity of individuals and communities and do not necessarily tackle other aspects like creating assets or resources for communities and providing access to employment opportunities.

It is therefore crucial to place skill development within the larger context of livelihoods and encourage companies, NGOs and social enterprises to think about skilling as a means for people to access livelihoods and not as an end in itself.

In order to design and implement impactful programs it is important to realize that training forms just one aspect of creating livelihoods and does not automatically translate into a means of livelihood. While training people in new skills is critical, companies need to look at skilling through the lens of creating livelihoods and ensure that there are support mechanisms in place after training.

A holistic approach to skill development

To do this, what really needs to change is the way in which skilling programs are currently implemented. Conducting isolated training with no follow-up and no connection to market demands will reduce their effectiveness. Adopting a lifecycle approach to skilling is the only way to ensure meaningful, long-term impact. A lifecycle approach looks at all aspects of skilling, from the aspirations of people before training, to counselling and following up with beneficiaries during their employment. Skill development programs conducted in this manner will ensure that the training received has an impact on livelihoods and contributes to the economic well-being of communities.

The role of companies

The Skill India Mission aims to actively involve companies in skilling the country. In July, at a conference in New Delhi about engaging the private sector, Pawan Agarwal, Joint Secretary at the Ministry of Skill Development and Entrepreneurship, Government of India talked about the government’s drive to involve companies and said, “private sector engagement is part of the DNA of the Skills Ministry of India.” By consolidating its efforts under the Ministry of the Skill Development and Entrepreneurship and increasing the budget of the National Skill Development Fund (NSDF) managed by the NSDC, the Government is pushing for the active participation of companies[6]. Engaging with the NSDC through public-private partnerships (PPPs), CSR programs and scaling up skilling operations is critical to the success of Skill India.

Why should companies get involved?

Align with government priorities

At this point, publicly funded initiatives are just not enough to create significant impact. Companies shape industry demands, set trends and therefore, have a greater understanding of what is needed in various sectors. Currently the Indian Government is only able to train 3.1 million of the 12.8 million entrants into the workforce each year and it is vital that companies step in to close the gap. Kalyan Chakravarthy, Executive Director at the PanIIT Alumni Reach for India Foundation (PARFI), reiterates the need for companies to get involved, “The government does not have the resources to train 40 crore people (500 million). India cannot afford this kind of budget, not unless it’s on a grant basis. Ultimately, (skilling) has to be market driven.”

As part of CSR

Luis Miranda, a Board Director at Samhita, sees the CSR mandate as a win-win opportunity for companies to invest in skilling without worrying about profitability, “because you are training people for your own business, if you’re doing good that’s great if not, you spend 2% and it goes against your CSR.”

Companies can design training programs that align to their business and use such programs to create a pool of skilled workers that could be potential future employees.

Many companies have expressed reluctance to spend money on training as this involves high costs and trainees often leave for higher salaries after training is complete causing companies to lose out on their investment. By including skilling under the CSR mandate, companies that were previously reluctant may be encouraged to contribute to the cause.

Increasing employability

Skill training programs also need to be linked to market demands so that trained individuals are seen as valuable assets and are employable. Establishing links with the private sector is a good way to do this. An evaluation of one of the programs run by Gram Tarang Employability Services, a social enterprise that trains people in underdeveloped regions of the country, showed that due to the extent of private sector links built into the initiative, 100% of the beneficiaries were placed at the end of the program. (The study was published by GSE research and Practical Action Publishing.) Programs that do not have such corporate connections as the Gram Tarang, may not necessarily be as impactful, as people might not see the opportunity for employment afterwards, so it becomes important for companies to step-in and provide those much-needed links.

How can companies engage in skill development?

Through Public-Private Partnerships (PPPs)

The National Skill Development Corporation (NSDC) is a not-for-profit company administered jointly by the Indian Government and the private sector. This unique public-private partnership (PPP) initiative aims to narrow the skills gap between demand and supply in India. It acts primarily as a funding organization that catalyses the creation of large, quality, for-profit vocational institutions. The NSDC acts a facilitator by providing capital for start-ups to set up skill development centres and training programs. It has also set up 38 Sector Skills Councils (SSCs) that connect the needs of industry with the training that is done on-the-ground and builds capacity in respective sectors.

Companies can work directly with or leverage the NSDC in a number of ways.

• Fund the creation of quality vocational training institutes – this can also be done in partnership with social enterprises that have developed high-quality, low-cost business models
• Assess the validity of programs run by accredited organizations, contribute to NSDC’s curriculum design and ensure that it is regularly updated
• Work with the SSCs to ensure that training meets market needs and is updated accordingly
• Work with NGOs or SEs that are affiliated with the NSDC (as part of their CSR)

Train students through apprenticeship programs

Germany’s highly successful “Vocational Education Training (VET)” apprenticeship model is a good example of how companies can train people to build industry capacity. Companies work with vocational centres to train students that enroll in various courses. This system incorporates a ‘dual-training’ approach which allows students to split their time equally between the classroom and workplace. Companies give students a minimum wage and can absorb them into the existing workforce once fully trained. Students benefit from the training and salary and companies eventually get skilled and qualified workers that meet their requirements. While the Government of India has established a bi-lateral working group with the German Government to promote this system and the Ministry for Skill Development and Entrepreneurship has made provisions for a similar model under the Apprentice Training Scheme (ATS), active participation and interest from companies will be needed to drive these initiatives forward.

Get involved at the policy level

Policy level reforms are also an avenue under which companies can contribute to Skill India. The government needs the presence of corporations on their boards to advise and help shape curriculum so they are aligned to market demands. Rajesh Kaimal, Business Head of Manipal City and Guilds, an education service provider that trains and certifies people across the country, believes that companies need to get involved at the governance level for effective impact. According to him, the formation of the Sector Skills Councils are a good move by the government but needs active participation from companies; “The idea is that the Sector Skills Councils should have a healthy representation from the industry itself – [appointments to the board] should not be political but representative of the industry body and have key players from industry. Otherwise what will happen is the certification will lose its relevance. [For example] If someone who has a certificate from a certain SSC and is hired to operate a crane, but he doesn’t know how to do this – tomorrow nobody will hire from that SSC.” The SSC needs to make an effort to attract industry participants to their governing boards and constantly revise their curriculum in consultation with companies to stay relevant and become a key resource for employers.

What are companies doing?

The Skill India Mission is an opportunity for companies to give some serious thought to how they can play an impactful role in bridging the skills gap in the country. Wide-scale impact cannot occur without the active involvement of the private sector. By leveraging the Skill India Mission and engaging with the government and implementation agencies, companies can work to provide much-needed training programs to the vast number of unskilled people, which will ultimately benefit industry and contribute to the growth and development of the country in the long-term.

About the contributors:

Praveen Aggarwal, Chief Operating Officer, Swades Foundation, a foundation that focuses on creating livelihood opportunities for rural populations across India.

Kalyan Chakravarthy, Executive Director at the PanIIT Alumni Reach for India Foundation (PARFI), a not-for-profit registered society of IIT alumni committed to execute and scale self-sustainable business models that enhance incomes of the underprivileged sections leveraging PanIIT and other like minded networks.

Rajesh Kaimal, Business Head, Manipal City and Guilds, a joint venture between Manipal Education and City & Guilds, UK that trains and certifies people across the country.

Luis Miranda, Director at Samhita Social Ventures and Founder & ex-President, IDFC Private Equity

[1] (Planning Commission, XII Five Year Plan, Employment and Skill Development, pp 140-141)

[2] Ernst & Young, Knowledge paper on skill development in India

[3] (Planning Commission, XII Five Year Plan, Employment and Skill Development, pp 140-141)

[4]http://www.ey.com/Publication/vwLUAssets/FICCI_skill_report_2012_finalversion/$FILE/FICCI_skill_report_2012_finalversion_low_resolution.pdf

[5] http://www.theguardian.com/world/2015/jul/16/narendra-modi-unveils-bid-to-make-india-the-hr-capital-of-the-world

[6] http://www.livemint.com/Opinion/9zdTIPwwRT7VXd2Cv6Lu7L/Skill-India-How-we-can-spend-less-and-gain-more.html