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How India Inc is creating a skilled labour pool

Shyamal Majumdar | August 23, 2008

ICICI Bank has to sift through over 42 resumes on an average to find one candidate suitable for recruitment. A survey of CEOs of companies listed on the New York Stock Exchange quoted ICICI boss K V Kamath as saying that India's largest private sector bank scanned through about 750,000 resumes to find 17,500 qualified candidates last year.

Kamath certainly isn't alone in finding that looking for talent is a Herculean task. In fact, getting a job at Infosys [Get Quote], India's premier IT firm, is tougher than getting admission into the Harvard University. Infosys hires just 1 per cent of the over 1.5 million applications it receives every year. In comparison, Harvard takes in 9 per cent of those who apply.

India Inc's desperate search for talent isn't restricted to top-rung jobs alone. Last month, over 2.4 million candidates sat for a written test for 20,000 clerical posts in State Bank of India [Get Quote]. Which means just one out of every 120 candidates will succeed.

These numbers are worrying for a country that produces over 2.5 million university graduates, including 400,000 engineers and 200,000 IT professionals annually.  Obviously, this 'vast talent pool' has failed to impress Indian companies and employability remains a serious concern. In fact, IT industry body Nasscom has itself said only half of these new graduates are employable.

Another serious problem is the dwindling number of Master's and PhDs in engineering. India graduates just 20,000 Master's degree holders and fewer than 1,000 PhDs in engineering each year. By contrast, each year US universities confer 50,000 Master's and 12,000 PhDs in engineering. In fact, India isn't graduating enough PhDs to meet even the growing staff requirements of its universities, as a result of which even the faculty quality remains extremely poor.

But the good news is that quite a few Indian companies are doing wonders to develop a surrogate education system by helping to create, for a variety of industries, a skilled labour pool capable of handling very complex work. A study titled 'How the disciple became the guru' by US-based Kauffman Foundation and conducted by the Duke University has in fact advised US companies to learn from the skill development initiatives of their Indian counterparts.

"To maintain its global competitive edge, the US should perhaps learn from India. America needs to couple its education system - among the best t in the world - with an investment in upgrading workforce skills. In a global economy, this approach is critical to remaining innovative and competitive over the long term," the study says.

While this sounds a bit hard to believe considering the frequent criticism about the poor collaboration between Indian industry and academic institutions (take the condition of the ITIs, for example), the fact is that some Indian companies have gone off the beaten track and are transforming workers with a weak educational foundation into eminently-employable candidates.

The assumption these companies have made is that the new recruits, mostly from second- and third-tier colleges, will have to be trained practically from scratch.

Consider Infosys, for example. Each of the candidates recruited by the software company has to spend eight hours a day at the company's sprawling Mysore training centre, studying software programming and attending team-building workshops. In order to graduate, every fresher has to pass two three-hour-long comprehensive exams.

The Wipro [Get Quote] Academy of Software Engineering is also doing the same thing: Ordinary BSc graduates shortlisted by the company are admitted into a four-year programme with BITS, Pilani. At the end of four years, they graduate as Master's in software engineering and are employed with Wipro.

Tata Consultancy Services [Get Quote] also isn't far behind. Under a programme called TCS Ignite, the company hires plain science graduates from over 200 colleges in nine states. These graduates are then put through an intensive seven-month customised curriculum before they are inducted as full-time employees. The condition is that these candidates must agree to stay on with the company for two years.

It's not software companies alone that are running a parallel education system. Accounting firm Ernst & Young, for example, is chasing graduates to join its tax academy, which trains them as tax associates. The move followed a severe shortage of freshly-qualified chartered accountants for the tax audit business.

Retail giant Pantaloon [Get Quote] has also started a three-year BBA programme with a focus on retail in association with the Madurai Kamraj University.

And ICICI Bank [Get Quote] will begin its third batch of Probationary Officer Programme in November. Those selected will undergo a one-year residential classroom training at the bank's Manipal campus. On successful completion of the programme, they will be absorbed as Assistant Managers at a gross salary of Rs 350,000 per anum. The eligibility criterion for the admission test is a graduate degree with 55 per cent in any discipline.

The numbers may still be small, but the surrogate education system, developed by these Indian companies, is making a difference.



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