India’s
Demographics: the Potential Dividend and the Current Drain
According to the 2011 census, the median
Indian age was 25.1 years with 65% of the population under the age of 35. This
demographic advantage of India affords the nation an opportunity to overtake
the global stage with a vengeance, and claim the position of the Golden Bird
that we once used to be. However, the
impediment to the achievement of this game-changing aim is simply one, only 2%
of the 500 million strong workforce of the country are skilled. This creates
acute shortage for sectors that represent almost 75% of the country’s GDP – services (57%) and manufacturing (16%). Thus
with no option left, 53% of the country’s workforce is employed in Agriculture that
contributes 19% to the GVA and only 24% of the workforce is employed in
services. The need to skill up to grow
more productively and equally has never been more critical.
Education. Where do we do more?
A lot of effort has been put into primary
education leading to a net enrolment of 98% in primary schools. But the number
of children who are math and reading capable remains extremely low. Only 39% of
class 3 children are able to subtract and 47% can read a Class I text.
Those who manage to stay through schools,
with little ability to comprehend the higher levels of education, drop out soon
after high school. In fact only 12% of the students graduating from high school
make it to colleges. The reducing ratio of institutions of higher learning to
those of primary education in the country adds to the competition and thus not
all willing get to tool themselves up for the work life. In 2011 there were 447,600
middle schools in the country, 131,215 high schools and 72,046 pre degree / higher secondary schools / junior
colleges. For anyone wanting to pursue engineering or architecture there were
only 2,894 options and for those attempting to become doctors or nurses only 2,153
institutes existed. No wonder, the unorganised sector remains the one bread
earning option for 90% of the youth. The investment into education has and at
this rate will continue to reap low or no benefits for the nation at large.
While new institutes of higher learning are
being set up in the country, even by the private sector, there needs to be emphasis
on providing trained teachers, appropriate infrastructure and adequate
awareness to ensure education enables the disciples. In fact a starting point
of skill development should be to train teachers in delivery and ensure that
students are able to understand and learn in class.
India’s education spend is only 1% of the
GDP. As this spend increases in areas such as teacher training, the multiplier
effect could be significant, helping the National Skill Development Corporation
(NSDC) achieve its aim of training 30% of the 500 million workforce by 2022.
Skill Development: A Fresh Approach for a New Dream?
To ensure that the young Indians are tooled
up to becoming corporate India ready, the need of the hour is to bring
education and skill development under the same regulatory umbrella and do away
with the current structure that has education as the KRA of HRD Ministry and
Skill Development that of Labor and Employment ministry and NSDC. As we grow we will need more manpower, and by
2020 60% of Indian population is expected to form the workforce. It is only if
we ensure that basic education is provided to all and then each youngster is
given an opportunity to discover and grow in her field of choice that we will
have an educated, excited and equipped work force that will generate profit per
person befitting a country wanting to grow 10% per annum.
According to a recent report on India
Skills by WheeBox, an assessment test administered to 300,000 candidates
indicated that only 37% were corporate employment ready. Confounding! The
services sector is expected to grow at a CAGR of over 5% over the next two
years with e-commerce alone looking to create at least 150,000 jobs in the next
2 years. The government aims to boost manufacturing so that it can contribute
25% to the country’s GDP by 2025. With these targets and the current skill
development scenario, the hunt for talent in the country seems to be a long
drawn battle.
A lesson that India can learn from Germany,
and together India Inc and the government could implement, is close working
partnership of industry and universities. The German Mittlestand (mid cap) companies
are entrenched in their local Eco systems from providing training to the young,
internships and apprenticeships to local university students and finally providing
employment to the skilled they have developed. As a result not only is the German
unemployment rate (at 7.8%) lowest in Europe at but also the employee turnover
is only 2.7%. If Indian mid-cap could start training college going youth and then
employing them, we could see a shift from higher participation in agriculture
to manufacturing and services, giving GDP a major boost. Given the 2% mandatory
spend on CSR, this will be a self fulfilling prophecy for India Inc while
helping the nation to grow more sustainably. It could also reduce the rural to
urban migration, aiding development and reducing pressure on the stressed urban
infrastructure.
Women and GDP: It's Empowerment by Educating and
Employing!
An interesting observation of the 2011
census is the female workforce participation in the country at 26%! While in urban
India the female to male worker ratio is 226, in rural India the figure is
staggeringly higher at 384. Most of the women are employed in the informal /
unorganised sector or are a part of the unpaid workforce! In fact in the most
industrialised States of (erstwhile) Andhra Pradesh, Gujarat, Karnataka,
Maharashtra and Tamil Nadu, the highest female workforce participation in urban
areas is 20% in Tamil Nadu which is much lower than the national average. The
women worker participation is not only low but at the moment non profitable for
the country.
What these numbers don't tell but UNICEF
research has shown is that an educated mother is twice as likely to send her
children to school. Not only does this lead to literacy and probably higher
skill development but considering that every extra year of education enables
women to earn 20% more as adults, educating women becomes a no brainer!
According to Making it Right report, for 1% of new girls enrolled in schools,
India’s GDP could grow by USD 5.5 billion.
Conclusion
Talent recruitment and retention is a
challenge that all of corporate India is facing currently. If we take our
destiny in our own hands and focus on improvements in education, providing
vocational training on site and encouraging women, we could have an ocean of skilled
workforce to take us to growth levels unprecedented. We can use our CSR spends,
our professional networks and our association with the government to ease this
journey for all of us and the nation. A partnership that would see more people
more gainfully employed and higher growth rate for the country would also lend
stability to the nation which today is trying very hard to maintain composure
and tell the world that it too is a main character of the unfolding global
story.
As industry participants it is our
responsibility to help the cause of skill development in the country or very
soon talent acquisition would become a talent scavenger hunt.
