Demographic Dividend vs Demographic Disaster
More than 54% of its population is below 25 years of age and over 66% of the population in the working-age group (15-59 years), as per a recent report.
India is a nation with one of the youngest population profiles. More than 54% of its population is below 25 years of age and over 66% of the population in the working-age group (15-59 years), as per a recent SRS report. On the other hand, the India Skills Report estimates that ~12 million youth between the age brackets of 15-29 years, will enter India's labor force every year over the next two decades. So, the country’s population is expected to bulge in the 15-59 age group over the next decade. This demographic advantage is predicted to last only until 2040. India, therefore, has a narrow time frame to harness its demographic dividend and to overcome its skill shortages.
Bridging the demand-supply gap of skilled labor
While there seems to be a great demographic opportunity, it presses an alarm button, as there is currently a severe shortage of a well-trained, skilled workforce. Millions entering into the workforce are far outpacing the no. of jobs being created. It has been widely estimated that only 2.3% of the workforce in India has undergone formal skill training as compared to 68% in the UK, 75% in Germany, 52% in the US, 80% in Japan, and 96% in South Korea. So, if we do not bridge the demand-supply gap of labor, especially skilled labor, then a massive wave of unemployment could leave India floundering.
Underinvestment in education for employability
One of the key reasons for the wide skill training gap, is the marked disconnect between what academia is producing and what the industry needs. The world has transformed, but education in India hasn’t with a largely static curriculum ignoring the relentless advances in technology and new-age learning needs on mobile technologies, AI, Machine Learning, green energy, drone technology etc.
With 95% of graduates’ unemployable and nearly 80% of new entrants to the country’s workforce getting little or no opportunity for skills education, we seem to have underinvested in education for employability. As a result, a large section of Indian population needs to be skilled, reskilled and upskilled.
This is corroborated by the Global Talent Shortage Survey 2018 of the Manpower Group, where 63% of employers in India say that they are having difficulty in filling jobs. With such an acute talent shortage, employers are challenged towards productivity and output. A fracture in the skills supply chain could disrupt India’s plans of manufacturing dominance.
Soft skills for hard results
Soft skills or workplace skills or employability skills, are globally touted as the next big thing in the skilling domain. In today’s dynamic work environment, advanced soft skills like communication, teamwork, problem-solving, digital literacy etc. are given top prominence by employers as technical skills can be acquired and taught but soft skills are alien to traditional education and have more to do with character, relationships and personality.
A study by researchers from Boston College, Harvard University, and the University of Michigan found that soft skills training, like communication and problem-solving, boosts productivity and retention by 12 percent and delivers a 250 percent return on investment.
According to Deloitte’s Global Human Capital Trends report, executives now consider soft skills as important to fostering employee retention, improving leadership, and building a meaningful culture. 92 % of Deloitte’s respondents rated soft skills as a critical priority.
LinkedIn’s 2019 Global Talent Trends report shows that 92% of talent professionals and hiring managers say that soft skills are just as important–or more important–than hard technical skills. The report concludes that 57% of talent professionals struggle to assess soft skills. According to a survey by Talent Q, nine in 10 employers believe that graduates with soft skills will become increasingly important.
Perhaps one of the only soft skill surveys in India was done by Wadhwani Foundation, wherein 1100 employers spread over eight cities rated soft skills vs hard skills, and 85% of the employers said that they will be willing to pay a premium of 10-20% for a prospect equipped with desired soft skills than otherwise.Dual VET - Vocational Education and Training
The German vocational education and training system, also known as the dual training system, is a gold standard in creating an industry-ready, job-ready workforce through a professionally implemented combination of theory and training embedded in a real-life work environment. We need to learn and implement the following best practices:
· Firmly established vocational education and training in the education system
· Cooperation between industry and academia to be regulated by law
· The model to be owned by the industry, the standards and exams also set by it, and not by any other body
· Training, testing, and certificates to be standardized in all industries
China, Japan, Brazil, and Singapore, who had similar challenges in the past have adopted inspired models to successfully bridge the skill gaps and ensure the employability of their youth. This dual apprenticeship system is vital for a successful and smooth transition from student life to a work environment, thus creating a skilled workforce in big numbers that India so direly needs. We need to treat such disruptions in our education system as a prerequisite for a successful economy.
Going by the trends, India is likely to have the world's largest workforce by 2027. It is important that we disrupt our old school education system with increased expenditure on education and training and by integrating new-age, industry-led skilling programs that successfully transition the youth of today into a champion workforce of tomorrow.
There lies a great opportunity to leverage our demographic dividend as an unprecedented resource for wealth creation that will outpace much of the world as a global HR powerhouse. The mantra should be to “Build your skills, not your resume”. Education will not ensure employment. Skilling will.
Disclaimer: The views expressed in the article above are those of the authors' and do not necessarily represent or reflect the views of this publishing house