How Indian manufacturing sector is suffering from non-availability of skilled labor
Manufacturing PMI in India decreased to 49.10 in December from 50.30 in November of 2015. It is the first contraction since October 2013. Yet hope abounds. India’s manufacturing sector could touch US$ 1 trillion by 2025. There is potential for the sector to account for 25-30 per cent of the country’s GDP from 16 per cent currently. So what is stopping India from being a world-class manufacturing player is the non-availability of skilled labor?
Each and everyone associated with the manufacturing sector would readily agree that finding skilled labor and capital are the biggest challenges of the industry. We are struggling to find people who are skilled and mechanically proficient. So how does one acquire, train and retain non-existent talent?
The Economic Survey 2014-15 stated that as per the Labor Bureau Report 2014, the present skilled workforce in India is only 2 per cent, which is much lower when compared to other developing nations and that the number of persons aged 15 years or above, who have received or be receiving skills, is merely 6.8 per cent.
Getting skilled labor in the country has been a topic of many a discussions. In fact, for the first time in the history of Indian planning, the 11th Five Year Plan document (Planning Commission, 2008) introduced a chapter on skill challenges facing the nation, but suggestion of remedial measures have not been at the forefront. Dearth of formal vocational education, lack of quality workforce, high school dropouts, inadequate skill training capacity and negative perception towards skilling are the major causes of poor skill levels of India’s workforce.
But every problem has a solution and there are a few steps that will have a long-term effect on the availability of skilled labor in the Indian manufacturing sector. National Manufacturing Policy 2011 has set a target of creating 100 million jobs by 2022. While jobs might be created, we need to look at following solutions to get the right skilled people to take those jobs.
Introduction of vocational courses in the education system
Given the scale of the challenge posed by the quick economic growth and the Increasing segment of working age demographic, the first aspect of skill challenge is that the overall education level of India’s labor force in the age group 15-59 remains tremendously beneath mark. Youth across the length and breadth of the country still prefer to enroll in traditional educational and technical degrees, even if it is doesn’t equip them with relevant skills and renders them unemployable. If one has nothing better to do then they resort to vocational education for acquiring a skill. However, it is not that our education system is at fault but like everything else, it also needs additions. We need to include vocational courses to produce masons, welders, fork lift operators of sound quality that the manufacturing sector of the country needs. We need to seamlessly intertwine vocational training with school and college curriculum.
Make it a career choice
Nobody wants to become a carpenter, an electrician or a plumber in this country even though we cannot do without their essential services. Carpenters, electricians and plumbers get paid amply per hour of their service and are considered certified technicians and expensive options abroad. But the lack of interest in these professions in India is because, unlike the west, there is no dignity of labor here. In fact, our society does not appreciate the role of skilled labor and someone working in a factory is largely viewed as much inferior from someone working in a consultancy firm. Even people engaged in such professions want their children to grow up and do something ‘better’ in India. Doctors, engineers and management professionals are still the much sought after career choices. We need to tell students early on in life that learning an industry specific skill is a boon and not a bane. We should run a program similar to Germany’s apprentice and trade education track that cultivates students.
Often training institutes have outdated course materials which really doesn’t benefit anyone especially the students. Ill-equipped, outdated and theoretical curricula are more of a disservice to students who are still termed as non-skilled despite studying to acquire skills.
Enhance skilled labors’ quality
In follow-up to the previous point, we have failed to set the specific standards and competencies required for various job roles. There is no set measure or evaluation system to assess the skill. As a result, many a times, even skilled people fall short of expertise required for a particular job. However, with the National Skill Qualification Framework (NSQF), hopefully quality of skilled people will improve.
Put a stop to ‘Brain Drain’
A very pertinent problem is the migration of skilled labor to other countries especially in nursing and construction for better employment prospects. For example, the construction boom in the Middle East and better opportunities in Europe and the United States of America for nurses have caused much of the brain drain. Resources spent on training individuals seem a waste if they don’t find the right growth incubator in their own country. While the reverse brain drain has taken place to some extent, it has taken place in high skill segment.
The Government and corporates must leave no stone unturned to ensure reverse talent flow for arresting brain drain with a sense of urgency. For example, even President Obama has praised companies that are bringing manufacturing jobs back to the United States from abroad at a White House conference. He was clear that he did not want the next generation of manufacturing jobs taking root in countries like China or Germany. President Obama said. “I want them taking root in places like Michigan and Ohio and Virginia and North Carolina.” Make in India initiative of Central Government can retard brain drain in its tracks. But it needs to follow up with skilling the talent, which the government is looking into through higher and vocational education programs like the Rashtriya Uchchatar Shiksha Abhiyan, Technical Education Quality Improvement Program, and the National Skill Qualification Framework. As mentioned earlier, a dedicated Department of Skill Development and Entrepreneurship has been created under the Ministry of Skill Development, Entrepreneurship, Youth Affairs and Sports to accord focused attention in this area is also big step in this regard.
The need to skill people cannot be the prerogative of the government alone and there has to be greater private sector engagement and constructive participation. For an all–round growth development in skilled labor, combined initiatives by manufacturers, policy-makers and people will forge the way ahead. We need to unanimously decide on the type of trained workforce we need and the minimum standards that would be expected.
Conducive work environment
We need to breathe a lease of new life in manufacturing and it can be done by making skill training appealing to youth and ensuring general education and vocational education do not function in isolation. As entrepreneurs, we also need to provide a conducive environment with benefits to our work-force.
India needs a significant quantity of good quality skilled force to revitalize the manufacturing sector. Skill gaps are constraining Indian manufacturing, and unless closing these gaps becomes a national priority, growth of manufacturing sector will continue to suffer. In short, whether as an industry or as a nation, we cannot develop without skills. Period.