The Great Indian Talent Conundrum

young employees

Co-Written By  Ashish Kumar Singh and Praloy Majumder

A study done by Korn Ferry said that India is projected to have a skilled labour surplus of 245 million workers by 2030, mainly on the back of “vast supply of working age citizens”, even as most of the developed and developing economies are expected to grapple with talent crunch at that time. There is expected to have a talent deficit of 85.2 million workers by 2030 across 20 major developed and developing economies, which could result in USD 8.453 trillion in unrealised annual revenue by 2030. India is the only country expected to have a surplus of around 245.3 million highly skilled financial and business services labour force by 2030, as per the study. This talent surplus will be most visible in the financial services, technology, media, and telecommunications.

Over the last few years, the job market has changed in several aspects, the level of education has improved drastically however not bringing the required changes in the curriculum which can could have prepared an individual to be qualified enough to be part of the active workforce.

The India Skills Report, prepared by human resources company PeopleStrong and industry lobby Confederation of Indian Industry, calls this the Great Indian Talent Conundrum, which could swiftly transport us from the stage of reaping the demographic dividend to facing a demographic disaster. According to the report, India would need 700 million skilled workers by 2022 to meet the demands of a growing economy. The government has a target of skill-train 500 million people, nearly the combined population of the 28-nation European Union, by 2022. However, going by the current pace, India is likely to fall far short of the target. It has a capacity to train a maximum of eight to 10 million every year. More precisely, since April 2011, departments and ministries of the central government have cumulatively trained just 17.39 million and have missed the target in two of the last three years, according to official data.

Nowadays, since the industries have become more demanding and profit-oriented so they only hire experienced professionals. They don’t provide the training period to the freshers which they need. So, this actually means that the freshers nowadays should be skilled rather than qualified.

The situation is even worse when it comes to rural youth. This is due to the fact that their cultural capital, access to information and medium of instruction varies quite a lot from the urban youth. This affects their performance in continuation of education and in the job market. Employability of Graduates continues to remain weak in our country. India has more than 700 universities, more than 35000 colleges and NASSCOM report says that each year over three million graduates and postgraduates are added to the Indian workforce but only 10-15 % regular graduates are considered employable by the Industry. So on one side, the present curriculum needs to change to make each qualified youth as employable on the other side, there is an urgent need to develop curriculum for entrepreneurship development. The second aspect is especially true as such, generating a huge number of jobs is also quite difficult.

India produces over one million engineers and management graduates every year. However, not even a third of them find meaningful employment. Apart from graduates from the elite Indian Institutes of Technology, Indian Institutes of Management and a handful of other similar top institutes, the rest struggle to place their students. So, it comes as no surprise that India’s labour productivity is $10,080 a year, compared with $107,551 in the US and $23,888 in Brazil, according to a background note prepared this year by the labour ministry.

Scaling of productivity levels would require the development of human capital and entrepreneurship, technological advancement and innovation, along with enabling macroeconomic policies, infrastructure, and concerted action. Those who seek to enter the labour market must realize that competence, attitude and an inquisitive mind are critical for the survival and these are often missing. There is a gap between demand and supply of the right kind of people. In the last few years, there was a lot of talk about skilled manpower, but the real problem will arise from now onwards. The government policy is now favourable, the manufacturing sector is set to grow and companies have expansion plans. But the availability of enough right talent is still debatable.

Communication/proficiency has not been part of the curriculum in many places. The power to convey our thoughts to others is amongst one of the most important aspects that govern our success in relationships, throughout our life. In the world of work, clarity in communication and articulation contributes to our success. Hence, Language and communication play a vital role in whatever we do. When rural youngsters come to cities for higher education, the biggest problem they face is of communication. Whether it is Hindi or English, they feel at a loss while communication. Even the urban students face a major problem in effective communication. It has been felt consistently that younger students often lose on great opportunities just because they are not articulate enough. The fact is that we can be a better person and create a better society if we know exactly how to express ourselves. There is an underlying objective of improving language skills in the age of quick and abbreviated communication.

English is considered as “Global language” which has been used worldwide in diverse sectors such as business, politics, international relations, culture and entertainment. With the faster globalization of Indian economy, it comes as no surprise that recruiters are increasingly focusing on English language skills of candidates. Whether seeking a government job, or a job in the corporate sector possessing helps to keep the step ahead in the competition.

It has been seen that students even after completing their post-graduation are not meant to fit for jobs. They are expected to be employable rather than just educated. They lack the skills, which in today’s fast-growing industries and companies are looking for. If we think that skill training is just for poor school dropouts, then we are making the cardinal mistake of downgrading the dignity of labour. It should be for everyone with a singular objective of enhancing efficiencies.

It is important to ensure the availability of formal vocational education for the large portion of Indian population to avoid poor working conditions, low-income levels and joblessness delaying economic development. The increase in its working-age population is necessary but not sufficient condition for India to sustain its economic growth. India needs to create enough jobs and train its workers for those jobs, otherwise, this demographic dividend may turn into a liability./  demographic disaster.

One of the major drawbacks of our curriculum is that the current method of teaching does not develop self-confidence in a structured manner. Due to the excess supply of human population, the competition is extremely high for the quality of jobs in India. Under such a scenario, self-confidence would make the differentiating factor for many aspiring job seeker to convert an interview into a real job. The revised curriculum must cover this aspect.

In 2004-05, only 28 million of India’s 257 million job-seeking population in the age group of 15-29 received any form of vocational training. And, only 9 million of these 28 million received formal vocational training from training institutes; the others acquired skills informally from their preceding generation or other household members. As on 2004-05, only 78 million of the 257 million youth were qualified in the secondary level – 10th grade or above. Only 23 percent of these qualified youth held at least a diploma or a graduate degree. Even within this minority of graduate youth, a large proportion remained unemployed. During the economic upturn in the past decade, unemployment was the highest for diploma and certificate holders, followed closely by graduates and postgraduates.  This implies that, despite sufficient educational qualification, the workforce does not have skills that are required by the job market.

Although India will have the world’s largest pool of working-age people by 2030, if the current trend in labour participation continues, only 539 million out of 962 million people of working age would be working by 2030. In the absence of any significant reforms in school and higher education, the quality of India’s labour force would remain below par. CRISIL Research’s study on India’s education services industry, August 2010, points out, rather disturbingly, that although engineer turnout from India’s institutes will almost double over 2011 to 2015 – from 0.37 million to 0.65 million engineers, their employability will diminish further. As a result, most industries, including IT services, will face a talent bottleneck. With sectors that require a highly-skilled workforce – financial services, IT/ITeS, biotechnology and pharmaceuticals – set to expand briskly over the next decade,. India’s transition to a knowledge-based economy would require a new generation of educated and skilled workforce.

We believe that leadership is everybody’s business. Every person is born with leadership potential and provided she/he receives the suitable training and opportunity, can be molded into an effective leader. Therefore, effective leadership is the result of opportunity, training, and experience. Every person can be a leader at her/his own labor/ occupation but only those who cultivate the qualities will ever become truly effective leaders.

It is well known that proficiency in language can make a student a better competitor in the job market also. Any initiative towards the enhancement of skills, therefore, shall work on different aspects. Soft skills such as communications, personality development, interview skills etc. shall be an essential part of it. Secondly, special emphasis shall be given to youths preferably higher secondary and graduate students. India as a country with an increasing number of youths can get a huge advantage by providing them with such skills. The third variable is to prepare youths to pass the government services exams. Passing a competitive exam is not just about a few months or years’ preparations. It also has to do with the social and cultural capital of individuals. Having said that when students become part of a community, which is not just providing them with necessary skills but also present there for their moral support, it is comparatively easier to pass these hurdles. Also, with such training available to a huge pool of workforce it would be easier to select the better candidates for those jobs.

Indian education system is going through several changes- from following the banking approach of education to being more market-oriented. Skills are in much demand in whatever field a student chooses, but it is yet to reach to them. The process of providing skills to youths for turning them into professionals should be done from the very beginning of the education itself. It’s a continuous process. And if it’s not being done from the starting then training sessions and practical knowledge can be given in colleges for the development of the skills needed to get the humongous number of youths placed successfully. So far, the development of skills has been driven by the requirements of the market. Much progress has been made with significant help from the private sector, it clearly continued to be a supply-driven system. It needs a paradigm shift now to focus on industry. This will make the system demand driven and close the skills mismatch. The structural changes in the Indian Vocational Education and Training system are clearly now visible.

A vast number of qualified workers, who are a correct fit, on paper, for knowledge-based jobs, would continue to remain unemployed. This suggests that skill shortage relates, in part, to a scarcity of people with the required skills, experience and quality of education. Skill shortage would also persist in jobs requiring vocational skills. Opportunities in infrastructure, construction, mining, and health care have increased the demand for vocationally-trained workers. As formal vocational training has not been widespread, skilled workers to meet the rising demand from these sectors are likely to remain in short supply.  Enough manpower, but not job-worthy. Several studies by industry federations and consultancies have found that of the 12 million people entering the labour market every year, nearly 75% are not job-ready.

In India, parents and educational institutions enforce upon students by the traditional perception where formal education leads to graduation to finding a secure job. It needs to change sooner than later. The education and training and education should be provided to the students in a manner that they realise their aptitude and learn skills required to work as employees as well as employers. The efforts made by the government and industry to address these issues are significant, but it will need a consistent and more meticulous approach to gain a competitive advantage over the surplus manpower we have. With the focus on creating more jobs, nurturing entrepreneurship and the-lab-to-land connect, it would be possible to not let the talent surplus making India a country of jobless growth and unemployment.

(Praloy Majumder is Founder and CEO of Disseminare Consulting and a visiting faculty at Indian Institute of Management, Calcutta. Email id- [email protected], [email protected]

Ashish Kumar Singh is a Doctoral Candidate of Political Science at Higher School of Economics, Moscow. Prior to that, he has studied in Oslo, Mumbai, and Delhi. He can be contacted at [email protected])


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