Third Party Risk Monitoring

Employability and Skill Development Initiatives: Any Tangible Impact?

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A lot has been said about EMPLOYABILITY and a lot has been done too. With statistics such as “Less than 40% of Indian graduates employable” and “Very low English proficiency of Colombian labor pool could impact BPO sector” grabbing headlines, the question is “Are the current skill development initiatives enough?” Do these initiatives, present in almost every emerging and established outsourcing market, have the expected impact in developing the quality of the human capital? Is the scale of impact large enough to benefit suppliers?

In one of our recent blogs we had mentioned how major outsourcing locations across APAC and LATAM, such as India and Colombia have recognized employability, or rather the lack of it, among its graduates, as a significant challenge. Various reasons such as industry-academia gap, little emphasis on soft skills, outdated curriculum, and absence of bi-lingual or multi-lingual labor has resulted in this shortfall of industry-ready labor pool.

What Didn’t Work and Why

To address these issues, several Government-initiated programs have been launched over the last decade. One such program, aimed at improving the English language proficiency among Colombia graduates, launched in 2004, severely under-delivered, with English proficiency level in Colombia rated “Very Low” as per the EF English Proficiency Index 2015. What happened here? Turns out, implementation challenges and the lack of qualified teaching staff led to the spectacular failure of this program. Similar examples in India include the National Skills Development Corporation and Skills Development Initiative Scheme, programs that have not kept pace with the industry requirement for trained manpower. The underlying reasons for the “not-so-impressive” outcome of the programs remain the same, the industry-academia gap; a lack of skilled staff and absence of industry-focused curriculum.

The Ongoing and What to Look Forward To

Mexico, a major outsourcing market in the Latin American region, has invested in several such programs to develop the employability of the labor pool. One such initiative is MexicoFIRST, a program started by the Mexican Ministry of Economy in collaboration with The World Bank. This program aims at imparting technical training, soft skills and certify 15,000 specialists on an annual basis. Mexican administration also announced several short term language courses to improve English proficiency in graduates. Several other initiatives such as PROSOFT and Mexico IT exist, which aim at equipping the Mexican labor market with industry-relevant skill sets.

India has also witnessed a renewed focus in such programs, with several new initiatives like Skill India, National Skill Development Mission, National Policy for Skill Development and Entrepreneurship being announced in 2015. The Skill India initiative aims to train around 400 million Indians in different skills by 2022. As part of the “Recognition of Prior Learning (RPL)” program, one million youth will assessed and given certification for their existing skills. In the long term, these programs can significantly add to the ‘’employability’’ of the labor pool. National Association of Software and Services Companies (NASSCOM), the trade association of IT-BPM industry in the country has also launched several collaborations to impart relevant specialization and training to graduates and students. The MoU between NASSCOM Sector Skills Council and NIIT (a learning and training solutions firm) is one such example.

China, which boasts a significantly skilled labor force, faces a unique challenge: Soft skills. You read that right, although human capital in China is well versed in the hard skills, the lack of soft skills such as managerial abilities and communication can hamper employability at the mid-managerial level, where these skills count the most. Fixing these issues requires tweaking the education system to cater to this aspect of learning, an essential requirement to address this shortfall. China has successfully implemented similar initiatives in the past, such as the Preparative Training program, which significantly improved the employment rates of college graduates to 87.4%.

Long term Outlook: How does it impact outsourcing?

Quality of labor pool, employability and human capital are some of the key parameters that essentially decide if a location transitions from “Emerging” to “Established” outsourcing market. People scalability in terms of labor pool size and availability of relevant skills sets can play a catalyst in attracting outsourcing deals, no matter the scale. Suppliers in these markets can leverage the long term benefits of such long-term skill development programs which complement the existing industry-university tie-ups.

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