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A Market-linked Skilling Initiative
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Recent media reports have stated that the PMO has sought an exhaustive review of 34 key government programmes launched by it since 2014. Atop the list is STRIVE – a Skilling Programme of the Ministry of Skills and Entrepreneurship proposed with a massive outlay of Rs 2,300 crore. Why? Because it is not working.
Why is it not working? Because it is a supply-side model where people are skilled based on perceptions of market demand. However, the skilled workers are not in demand among employers or there are no jobs in the skilled domains. The key findings of the PMO are lack of market linkage and quality of training.
Is there a way out?
Yes. We can develop a market-linked quality Skilling model. A few skilling companies have already demonstrated demand-driven and employer-paid Skilling models, but this has not drawn the attention of the skill administration. Let’s look at the solution starting with the basics.
The Ministry of Skill Development and Entrepreneurship vide its Order dated 18th May 2016 constituted a Review Committee for Rationalisation and Optimisation of the Functioning of the Sector Skills Councils (SSCs) under the chairmanship of Sharada Prasad, former DG, DGET, M/o LO&E, Government of India. The Committee submitted a comprehensive report in December 2016 that highlights some of the key challenges.
Challenges in Skill Ecosystem
The top challenges in skill ecosystem today according to the report are:
• Poor private sector employer’s participation in skill programmes – There should be close interface of the vocational education training (VET) system with industry. The SSCs must become vibrant institutions of interface between the government, VET system and youth. The employers must own, finance and drive them to discharge their responsibilities efficiently and effectively
• Poor employment after skilling: Only 12.4% students are placed after skilling
• Low retention after employment
• Poor quality of training: There are no uniform VET standards in the country and. therefore, the skills imparted to the trainees are also not uniform
• Wastage of public money when the trainee is not able to get a job and use the skill: All employment exchanges in the country should be converted into state-of-the-art counselling, guidance and employment facilitation centres with modern technological tools
• Excessive dependence on a 100% grant model of public money: The commitment of industry towards training happens only when they contribute and are closely involved. This has resulted in maximising the beneficiaries by minimising the cost per trainee. Often the cost per trainee is not enough to provide adequate training
Causes of Poor Quality
Let’s start with two root causes of poor quality of training. The specs of the training programme are defined by the donor – the government and SSCs, and not the beneficiary (the employer) often necessitating retraining by employer. Excessive checks and balances are required to prevent fraudulent training practices because only the government is paying. The PMKVY (Pradhan Mantri Kaushal Vikas Yojna) PLUS can address all these problems.
What is PMKVY PLUS
• Classic demand-driven skill model with stake for employer
• Co-pay system with employer and government contributing. The training cost can be decided by the employer, who will pay the difference between the total cost and the fixed government payout under the PMKVY programme
• Employer specifies customised training on top of SSC QP programme
• SSC, employer, training partner and Skill Ministry come together to offer the training specific to a job role for the specific employer
• It is a Skill-plus productivity model of training
How it Works
• SSC and Training Partner (TP) approach employers that they will offer ‘day one’ productive SSC certified employee provided they co-pay and pre-select employees for the skill training
• The TP will develop a customised training programme – based on the existing QP course for that role or create a new QP – in consultation with the SSC and the employer
• SSC will issue a new QP for this role
• Employer will take responsibility for the quality of training and will choose the training partner
• Employer will be ensuring high certification and employment % by continuous evolution of the QP and the course
• Certification will be issued by SSC, Skill Ministry and the employer
• Employer will assess the candidates – pre-and post-training – in coordination with the SSC
• The employer will hire the certified trainees at the end of the programme
• Employer will pay for the training to the TP and claim the government share only for candidates retained after three months of employment
• In short, the employer designs the programme, pre-selects and counsels the candidate – executes through a TP, conducts quality assessments with the SSC help, certifies with the SSC and Skill Ministry, pays the TP and claims after three months for the retained candidates a share of the cost
Why custom-designed training — Productivity on the job requires customised training designed for productivity post training. Employers are willing to co-pay only if the induction training is also included and employer need not provide additional training
Why would employer co-pay — Because a productive employee is worth paying for and the co-pay amount will be lower than the cost of low productivity of the untrained employee
How big can this programme be — This can be a new programme aimed at graduate or the diploma /ITI segment, in addition to the existing PMKVY, Pradhan Mantri Khanij Kshetra Kalyan Yojana (PMKKY) and Deen Dayal Upadhyaya Grameen Kaushalya Yojana (DDU-GKY) programmes.
Many sectors where there is a shortage of productive employees will participate. Banking, insurance, financial services, healthcare, retail, manufacturing and assembly are some of the sectors. Roles ideal for PMKVY PLUS are sales, plant operations, customer service in the above sectors. The potential for coverage could be as much as a million graduates a year within 2 to 3 years. (See infographic for PMKYK Benefits)
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