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Skill building
The paradox of India’s labour market is that despite its favourable
demographics, employers face a labour shortage. A skew towards the
informal sector, employability issues and policy are the key culprits. The
National Skill Development Mission has taken on the goal of training 500
million people by 2022 and the private sector is also starting to play a
greater part. The impacts of the situation vary widely across sectors, but
public-sector undertakings appear more vulnerable
Look at structure, not demand-supply
q Our macro-level estimates suggest that the overall demand-supply balance may not
change significantly in the medium term.
q The pace of job creation has slowed, while rising rural incomes, education and the
government’s rural-employment scheme are also curbing participation.
q However, employment quality and thus income generation is an issue, reflected in
the 91% share of the informal sector and the 50% of workers that are selfemployed.
Employability – the core issue
q Employers across the spectrum cite issues with employability - whether for highend
software engineers or shop attendants.
q In some cases, this may relate to the absence of required soft skills, but a broader
reform of the education system is needed for a lasting solution.
q Poor-quality primary education, neglect of vocational education - not least due to.
Winds of change
q Under the National Skill Development Mission, a framework to map labour markets,
bring employers and trainers together on sector skills councils and provide funding
for skills development is falling into place.
q Some states are pushing ahead with private-public initiatives in primary education
as well as vocational training.
q However, issues like candidate funding, accreditation and trainer shortages need to
be addressed..
Impact points
q The impact on individual companies will vary significantly - based on labour
intensity, the phase of the cycle and company-specific initiatives - but wage
inflation is likely to exceed the historical average.
q The companies that have the highest sensitivity of PBT to a 10% higher employee
expense are Voltas, Bharat Forge, Jubilant Food, Tata Motors, Ranbaxy, RCOM
q The flipside is the business opportunity for companies looking at a potential
US$22bn training market
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
Skill building
The paradox of India’s labour market is that despite its favourable
demographics, employers face a labour shortage. A skew towards the
informal sector, employability issues and policy are the key culprits. The
National Skill Development Mission has taken on the goal of training 500
million people by 2022 and the private sector is also starting to play a
greater part. The impacts of the situation vary widely across sectors, but
public-sector undertakings appear more vulnerable
Look at structure, not demand-supply
q Our macro-level estimates suggest that the overall demand-supply balance may not
change significantly in the medium term.
q The pace of job creation has slowed, while rising rural incomes, education and the
government’s rural-employment scheme are also curbing participation.
q However, employment quality and thus income generation is an issue, reflected in
the 91% share of the informal sector and the 50% of workers that are selfemployed.
Employability – the core issue
q Employers across the spectrum cite issues with employability - whether for highend
software engineers or shop attendants.
q In some cases, this may relate to the absence of required soft skills, but a broader
reform of the education system is needed for a lasting solution.
q Poor-quality primary education, neglect of vocational education - not least due to.
Winds of change
q Under the National Skill Development Mission, a framework to map labour markets,
bring employers and trainers together on sector skills councils and provide funding
for skills development is falling into place.
q Some states are pushing ahead with private-public initiatives in primary education
as well as vocational training.
q However, issues like candidate funding, accreditation and trainer shortages need to
be addressed..
Impact points
q The impact on individual companies will vary significantly - based on labour
intensity, the phase of the cycle and company-specific initiatives - but wage
inflation is likely to exceed the historical average.
q The companies that have the highest sensitivity of PBT to a 10% higher employee
expense are Voltas, Bharat Forge, Jubilant Food, Tata Motors, Ranbaxy, RCOM
q The flipside is the business opportunity for companies looking at a potential
US$22bn training market
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