Teamlease Skills University Study Finds Employers on the Cusp of Adopting Apprenticeship as Primary Tool for Skill Development; 76% Feel Apprenticeships Help Reduce Attrition and 60% Feel It Improves Productivity

India has a 500 million+ workforce but productivity continues to remain a key challenge as 56% of Indian workforce is still not skilled enough to meet the demands of the market. Ahead of 12th December – 60 years of the Apprentices Act in India – National Employability through Apprenticeship Program [NETAP] from Teamlease Skills University study shows have apprentices are emerging as the primary tool for employee skill development.

The study shows close to 60% of the employers find that apprenticeships improve productivity and 76% feel that it helps them address attrition. The study shows an increase of 22% in productivity gains from apprenticeships (a 5% increase from 16% last year). It also suggests apprentices have higher productivity than people recruited from other channels and apprenticeships offer a 19% reduction in the hiring costs.

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The study titled ‘ROI on Apprenticeships’, is being released today in the presence of Shri Rajesh Aggarwal, Secretary, Ministry of Skill Development & Entrepreneurship and Mr Manish Sabharwal, Vice Chairman, TeamLease Services. The paper focuses on the gains that employers have achieved through investing in apprenticeships and also highlights key reforms required to augment the apprentices’ ecosystem in India.

Addressing the occasion, Mr Sumit Kumar, Vice President and Business Head – NETAP, said, “Apprentice programs are becoming a competitive advantage for employers; as thoughtfully structured programs deliver much more than their costs, because of higher productivity, lower attrition, lower hiring costs, and faster time to fill open positions. The war for talent is being won by employers who are reimaging their people supply chains and this ROI report suggests that offering apprenticeships is a powerful tool for this re-imagination”

“Though the Apprentices Act was passed in 1961 and it was the 20th point in the 20 point program of 1975. Only 4% of the Indian labour force receives structured apprenticeships and less than 0.5% of enterprises have formal apprenticeship programs. To scale up apprenticeships and reach its true potential, structural reforms are required from a policy perspective. Additionally a shift is also needed in the mind-set and the practices of organizations”, added Mr Kumar.

Sharing his views on the ecosystem in India; Shri Rajesh Aggarwal, Secretary, Ministry of Skill Development & Entrepreneurship, said, “Apprenticeships play a very crucial role in bridging the skill gap that exists in our ecosystem. We are making every attempt in making the system simplified and encouraging to scale the apprenticeship engagement in the country. Blended learning coupled with on-the-job training provides the youth, with the right skill sets, preparing them to meet the requirements of the industry. In the coming years, all stakeholders (academia, industry, government) need to work together to further improve the adoption of apprenticeships both among employers and candidates.”

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The paper highlights three recommendations and five business mantras that will help augment the ecosystem. From a policy perspective, the paper recommends to improve the growth percentage among large enterprises by enabling a business friendly environment and open markets as it holds 2.5% of apprentices as their workforce. It also suggests to enable the adoption of credit based apprenticeship embedded degree programs suggested by NEP. Additionally it calls for developing a tripartite association among apprentices, academics and industry to enhance the learning ecosystem.

From an organizational shift standpoint, ‘ROI on Apprenticeships’ paper suggests placing apprenticeship at the heart of workforce planning. Additionally the proposal recommends creating measures to widen industry participation, creating a flexible stipend structure for apprentices and introducing equitable management practices which help accelerate adoption.

The initiatives combined will help India reach the vision of 10 million apprentices in 10 years and create an unfair advantage for brand India as many global employers look for new markets, production bases, and human capital.

Key Findings of the Employer Survey

• 61% of employers surveyed see there is net positive value in apprenticeship.
• 53% of employers ranked long term performance and reduced cost of recruitment as their top two benefits
• Nearly 50% of employers see long-term gains, including better performance and/or higher retention.
• 60% of employers opined that their productivity improved. In all, depending on the duration of an apprenticeship, employers are benefitting from an increased skill level on the part of apprentices because it is raising their productivity toward the end of the training period.
• 76% of employers polled that apprenticeships reduce attrition by building a bond of loyalty between company and employee.
• 63% of employers of the survey believe that apprenticeships improved their overall performance and provided a competitive advantage over other firms.

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