India’s Massive Skills Gap – Can it be Overcome?

The ‘Skills Gap’ in India promises to be one of the biggest, insurmountable problems for our economy. India’s “demographic bulge” – the hundreds of millions of young people who will flood its job markets in the next decade – is in danger of sliding into a lopsided paunch that will weigh the nation down and crimp its gross domestic product. While laws, legislature and policy may change to allow for more foreign investment and encourage more multinationals to set up in the country, the problem with qualified candidates still remains. An article written by Professor Dr. Frits van Merode, of Maastricht University in the Netherlands, outlines the problem up nicely:

The challenge facing India’s higher education is far reaching. India has excellent universities, and their alumni are assured of securing work both domestically or abroad. But this is just the tip of the iceberg. A large part of the university programs do not cater to the needs of the business community, as the content is not sufficiently relevant or because of out-dated teaching methods that do not teach the right skills. Many university graduates do not find suitable work and have to accept work that is considerably beneath their capabilities. This is not only disastrous for the graduates themselves, but also for the Indian economy. After all, the education level of the working population is an important condition for the further development of the economy.

The biggest barrier to skills development is most definitely our education system, as Prof. Merode notes, which lacks both in reach as well as quality, and as he mentions, in its relevance to the world. Both vocational and academic courses are simply misaligned with the needs of the marketplace, and do not train students to be sufficiently prepared when they enter the world of work. This means that both employers and employees are unhappy, work happens inefficiently, and altogether, this has a disastrous effect on the economy at large. An article from WSJ articulates the problem:

India’s estimated 3,300 business schools churn out tens of thousands of management graduates each year. But only a small fraction of them are “employable,” or possess basic skills necessary to work in sectors ranging from marketing to finance. A study that will be released later this week by Aspiring Minds, a Gurgaon-based talent management firm, found that India’s B-schools don’t teach their students basic skills like communication, which are essential for getting management jobs.

Aspiring Minds based its conclusions on a so-called “employability test” it conducted on 32,000 MBA graduates from 220 business schools across India. The test, which quizzed graduates on topics ranging from grammar to quantitative analysis, found that only 10% of those tested had skills that recruiters typically look for while hiring management graduates.

The study found that less than half of the students tested had some knowledge of key industry terms and concepts in their areas of specialty. For instance, a third of the surveyed students who had majored in finance, did not know what IPO – short for initial public offering – stood for.

A third of all students tested lacked basic English grammar skills, a prerequisite for working in the corporate environment, particularly in client-facing roles like consulting, banking, marketing and sales.

This lack of “soft-skills” in potential employees means that, while graduating MBA students may have some of the requisite analytical skills to be competitive in the workplace, they suffer in areas like basic communication, which can make or break a career. Besides this, most students also learn a lot of the theory of running a team or a business while in college, but most have never actually applied this skills in practice. This, once again, means that graduating students are simply unprepared to actually engage the professions that they have been working toward. This means that most companies have to then invest in rigorous training and almost, a ‘re-education’ of employees, to make them ready. A recent TOI article reports:

While the absolute numbers [of graduating students] look encouraging, industry-ready candidates with the required life skills and technical competence are very low. Therefore, companies end up investing heavily in technical training and life skills centers…almost like parallel universities to make already educated people industry ready.

For many of the executives lamenting this skills gap, even the extra training is often not good enough, and they find themselves back at the drawing board. When asked where, in their opinion, the problem lies, most said that it is not only the curriculum, but the lack of industry internships:

Besides the curriculum, experts also believe that the problem lies in the manner in which internships are framed. “We need to have longer internships during an MBA. We currently have 1.5-2 months’ summer internship, while in European business schools it’s longer at about two six-month internships. Another thing that needs to change is that Indian business schools are driven more by theory and real life is very different,” said Tulika Tripathi, managing director, Michael Page in India, a specialist recruitment firm.

Tripathi believes companies should invest more on providing live projects to MBA students, where currently little attention is paid to career management.

This disturbing scenario certainly begs for a different kind of approach to education, one that is much more attuned to the skills required by industry. Colleges and universities must begin to revise their curricula, rethink the methods of teaching, and re-haul the entire relationship between academia and the marketplace. While this is something that we at Adianta aim to do, the problem is so large and deeply ingrained that the movement to counter it needs to be similarly massive.

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