The Hindu Business Line : Skilled workforce shortage: Hard realities

While the Government is grappling with the lack of increase in jobs in the organisation sector despite GDP growing at over 9 per cent, business leaders across industries are grappling with an acute shortage of skilled workers despite over 120 lakh entering the workforce every year. This article attempts to understand this apparent contradiction better by looking at the subject of skilled workforce shortage from multiple dimensions.

Ganesh Chella

Predicting the onslaught of a skilled workforce shortage and attempting to put a number to it has become the most favourite subject of research for every consulting firm, trade body and thought leader. It is almost as if no one ever saw it coming.

Beyond all these reports, our everyday experience tells us that we do not have enough people to tap rubber, harvest the paddy, lay bricks, fit taps, repair electronic goods, work in retail stores, fly aircraft, assist doctors in the operation theatres, teach your kids, collect garbage, drive your cars and trucks, wash your dishes at home… The list can go on.

I see four fundamentals factors driving the skilled workforce shortage in the coming years:

Migration

There was a time in the 1980s when employers from West Asia could come to India and return with a plane load of skilled employees. Not any longer. With the wage differences diminishing over the years, migration has fallen. Even as a globalised world is helping organisations and countries migrate their jobs to countries with lower wages, employees are adopting the same philosophy by moving from a lower wage island to a higher wage island.

Labour migration is taking several forms at the moment:

Inter-regional migration, when people from one region of the country migrate to another region in search of relatively better opportunities. Similarly, people are also migrating from the rural areas to the urban centres in search of more lucrative opportunities.

While geographical migration helps address pockets of unemployment through mobility, it can also eventually lead to shortages in the locations from which people migrate and could eventually hurt.

Horizontal migration, when employees from one occupational group migrate to another because of better pay and benefits within the same geographical region.

Personal drivers choose to work for BPOs, domestic helpers choose to work for retail stores and garment manufacturers and, most important, farm labourers migrate to work in factories resulting in skill shortages in the farms.

Global migration, when employees with skills migrate to significantly higher wage islands. Nursing, for example, is increasingly considered a mobile profession.

Thousands of nurses, the vast majority of them women, migrate each year in search of better pay and working conditions, career mobility, professional development, a better quality of life, personal safety, or sometimes just novelty and adventure (Kingma 2006). In the Philippines, migration-led shortage of highly skilled nurses has created severe problems for the Filipino health system, including the closure of many hospitals.

Inter-organisation migration, which is more commonly referred to as attrition. At an average migration of about 10 per cent, we are talking of about a million employees migrating across organisations every year and this is no small number.

All these end up causing shortages in the pockets that are lowest in the food chain. Unless the disparities in wage levels across these groups flatten out, migration will never subside and all indications are that migration-led shortages will only increase.

Vocational education and training gaps

The Task Force on skill development, which was convened under the chairmanship of Mr B.S. Baswan, in its report, called for a paradigm shift in the national policy on skill development with the private sector playing a lead role instead of the government, as they are the job providers. The Government’s role would have to change from being a vocational training provider to a partner and facilitator, the report concludes.

The vocational skill problem is extremely acute. The Planning Commission, in the July 2001 report of the Task Force on Employment Opportunities, found that 44 per cent of all workers in 1999-2000 were illiterate and another 22.7 per cent had schooling only up to the primary level.

That group’s findings indicated that, in the age-group 20-24, only 5 per cent of the Indian labour force had vocational skills, which was much lower than other countries including Mexico which had 28 per cent. The latest NSSO Employment/Unemployment Survey (61st Round — 2004-05) reinforces this position.

In summary, of the 120 lakh added to our workforce every year, a meagre percentage is covered by any vocational programme. It is therefore abundantly clear that the real problem of unemployment in our country will be solved, not by our IT and ITeS sectors which collectively employ only around 16 lakh people.

The real numbers will come from creating a nation-wide vocational skill movement so that a good part of the existing workforce and the new entrants find meaningful employment and are able to address the real skill shortages.

The vocational education and training problem has three dimensions:

The existing system of vocational education, especially the ITIs, have not been working well.

The needs of new vocations, especially in the services sector (retail, real estate, logistics, healthcare, and travel) which constitutes over 50-80 per cent of the incremental GDP growth has not been addressed.

The traditional craft-based model of vocational education and training where a carpenter learnt the trade from his father will not work, since the demand for such services far outstrips supply and the on-the-job apprenticeship method of skill development may not be scaleable.

The real challenge before us is to raise the dignity, respect and pride of vocational education in a nation that mocks at anyone who does not become an engineer.

(To be concluded)

(The author is founder and CEO of totus consulting, a strategic HR Consulting firm. He is also the co-founder of the Executive & Business Coaching Foundation India Ltd. He can be reached at ganesh@totusconsulting.com)

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