The thrust from the urgent demand and policy-backed skill development initiatives has made ‘skilling’ a buzzword in India today. Skilling in terms of CSR is the infusion or upgrading of the competence of an individual or group in a particular trade, ability or knowledge, mainly aimed at elevating their socio-economic stature. Once the desired skill set is acquired, an individual enjoys the options of employment opportunities, enterprise setups, and enhanced information, which ultimately leads to a transformed life. But while India aims to be a trillion-dollar economy soon, there is a vast gap between our current skill index and the desired goals.
The Indian Skill Synopsis
India has one of the largest workforces in the world. With nearly 500 million working-age people, the domestic labour market is second only to China’s and far more significant than that of the United States and the European Union. India also has a much younger population, with an average age of 26.8 years. In addition, tens of millions of students graduate from colleges nationwide every year. This youth form the present and the future workforce. But despite having a vast reserve of human resources, India lags regarding vocational skills. According to the Human Development Report, 2020, only one in five Indians in the labour force are skilled. India ranks 129 among 162 countries in this regard. These numbers are alarming as they talk about the future of our nation.
Factors Leading to Unemployment in India
In India, for decades, the educational system has made students mug up the curriculum without knowing its practical application in real life. ‘Ill-trained students graduating from schools later form a huge proportion of poorly trained workers in the informal sector – the largest employment generator in India.’ Most skill training is carried out through self-taught practices, observation or a transfer of skills from a master craftsperson to an apprentice. The proportion of formally skilled workers in India is deficient, just 4.69% of the total workforce.
The mismatch between skill, academic training and employment has broadened to an extent where, on the one hand, employers are unable to find suitably trained people. On the other, the youth cannot find the kind of jobs they aspire.
In 2021, the Union Minister of Skill claimed to have achieved the target of training 1.07 crore youth. However, as per the India Skills Report 2021, youth employability has decreased to 45.9% in 2021 from 46.21% in 2020 and 47.38% in 2019, primarily due to a loss of skilling in the last two years. COVID has changed the world of work. The formal skill sets that are required by industries have undergone a shift. While for some, the transformation was sudden, for many sectors, it was in the offing anyway, and COVID just accentuated the growing skill gap.
Bridging the Gap through CSR Investing in Skilling
The government is now putting policies and infrastructure in place to ensure appropriate skilling right from primary education. Taking cognisance of the call, the extended para force of India, the CSR fraternity, has also been investing in the skill sector for some time now. As per reports, around 328 large companies have pumped in Rs 1,653 crore towards 775 skilling and training projects through their corporate social responsibility efforts during the last five years. And a further 70% of India Inc. plans to invest their CSR funds towards skilling in 2022. These initiatives, coupled with the right impetus from the government, like, for example, exemption of GST on CSR programmes, are going to bring a revolution in the journey of bridging the employability gap and improving India’s skill capital.
A lot of gaps remain; a lot of scopes are unmapped. Continued efforts in the domain of CSR skilling would yield long-term results that will eventually prove to be a game changer for society, for the country and even for the CSR funders. Some of these reasons are:
Attending to the Need of the Hour
In the next 15 years, the labour force in industrialised countries will decline by 4%, whereas in India, it will increase by more than 30%. This can be seen as a challenge, a “demographic dividend” – a burden and an opportunity. To avoid this “demographic dividend” becoming a “demographic disaster”, the workforce should be imparted with employable skills and knowledge, as a skilled workforce is vital for socio-economic development. This skill deficit does not augur well for a growing economy like India. A World Economic Forum report in January showed that investment in upskilling could potentially boost the global economy by $6.5 trillion (€5.45 trillion) by 2030 and India’s economy by $570 billion. India, according to the report, had the second-highest additional employment potential through upskilling. It could add 2.3 million jobs by 2030, second only to the US’s 2.7 million jobs. And so, CSR-funded development programmes with the anticipated future skills could be the best way to contribute to filling the skill deficit.
Serving a Gamut of Agendas through a Single Arrow
The CSR-based skilling includes a gamut of activities across a range of beneficiaries, right from imparting life-relevant education to children to enabling youth with vocational skills or empowering women and offering second chances to adults.
Skilling is used for all ages, various domains and from all industry forms. CSR funders can choose from a wide range of demography, geography or industry per their interest to plan their investment. Each of the interventions is sure to give assured and tangible returns on the investment.
Investment towards Nation and Future Resource Building
Skilling as a CSR activity not only contributes to nation-building but is also capable of serving the long-term goal of any organisation by maintaining the availability of a skilled workforce for various roles within the industry. It’s akin to cultivating your crew.
For any organisation, human resource is its biggest asset. Given the times that we live in, uncertainty is a given. Skilling-based CSR initiatives not only transform society by uplifting the poor but also work well for organisations to develop their workforce through placement opportunities. Many organisations indulge in CSR activities that align well with their industry.
Conducive Environment and Propulsion from the Government
Attending to the dire call and to keep the momentum going, the Government of India has commenced many supportive policies and schemes to ease out the skilling framework. Setting up of dedicated ministries for skill development, line departments, exemptions from GST, and single window facilitation of work – all this has made investment easy and seamless. Laying down various policies towards skilling, farming SOPs and infrastructure and the vast possibility for convergence allow for creating conducive and lucrative options for companies to invest in skill. To channel the interests of a plethora of organisations to participate in the mission of Skill India, a strategic vehicle to create a multiplier effect on skilling has been devised.
Building Better Brand Value as a Company
CSR, apart from being an ethical or philanthropic activity, is also a great source of recognition for the organisation. The enhanced role of skilling as a CSR activity for nation-building has been well documented. Skilling is a future-oriented activity that manufactures human resources. Considering the gap between the actual and the desired skill set levels, it is pertinent for corporations in India to invest in skilling. It adds to the brand value and reputation and also drives sales, and reduces costs.
Recommendations
While the government itself is making concerted efforts toward skilling, there are many gaps still, but improvements are possible. A budget of Rs 3,000 crore set aside by the government is just too less to have any noticeable impact on skill development for every industry. And so, it should be recommended for companies to invest at least 25% of their CSR funds towards actual skilling, which should also compulsorily include interventions in rural setups. This figure needs to gradually increase with passing years, as skilling is a domain which creates ripples of growth for an individual, his family and eventually the nation. Skilling their existing workforce, with some funds set aside for this, should also be an ethical responsibility of the companies.
Conclusion
With so much of a young population in our arsenal, India entirely naturally stands in a highly favourable position to develop and uplift itself. While the demand is high, converting young people into human resources is the biggest challenge. With 65% of our population being in rural regions, skilling potential needs to be mapped in those regions too. For the poor and the needy in these areas, skilling serves as the only reliable option to gather skill-sets that will help them advance in their careers. Unfortunately, the number of such people is enormous. Nevertheless, many governmental initiatives, along with CSR initiatives of corporations, have worked well to create an environment that fosters growth for all.
The CSR-based skilling activities can mobilise resources in the rural hinterland to provide vocational skilling to enhance employability. Investing in skilling is indeed a futuristic move as CSR companies can get a hundred-fold returns through the newly skilled and empowered workforce that has the potential to drive the company and the country forward.
(Ketan Deshpande is the Founder and Chairman of FUEL (Friends Union For Energising Lives) & Research Scholar in CSR.FUEL organisation has implemented Skill Development programs with large Industries and has directly impacted more than 100000 youth)
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