Making apprenticeship scheme work
Rope in staffing companies and amend the scheme suitably to realise its true potential and spread its impact
It was reported recently that the government plans to execute the apprenticeship programme with private participation. This programme is currently being run by the Director General of Training under the Ministry of Skill Development and Entrepreneurship. But going forward, it would be run by NSDC and Sector Skills Council. Let’s understand the scheme a little better.
Apprenticeship Scheme under National Apprenticeship Promotion Scheme (NAPS)
- 2.5-10% of company’s workforce must be taken as apprentices
- They can be taken for a period of 1 to 3 years
- No job guarantees to be given by employer
- There is a separate budget for training of apprentices
- Government is willing to pay 25% of stipend subject to a ceiling of Rs 1,500 per month as a fee to the employer for training of apprentice
- Employers engaging apprentices under the Apprentices Act, 1961 are exempted towards contribution to EPF and ESI for apprentices
- Apprentices get the entire stipend in hand because there will be no deductions
- 40 sectors and 259 trades are covered
- Employer and apprentice must register on the NAPS portal
- Paperwork required to claim the stipend and participate in the scheme
Challenges in the model
There are many challenges in implementing the apprenticeship programme ‘as is’:
- The model envisages direct participation of employers. But many employers are reluctant to take on red tape and scrutiny that comes with any government scheme. Since the maximum apprenticeship number permitted is 10% of the workforce, the employer should have tens of thousands of employees for achieving the required number of apprenticeships to create internal team to manage NAPS
- Apprentices must be productive for employers to pay salaries/stipend
- This will also mean many smaller employers who employ hundreds or less of employees (99% of the employers are in this category) may not participate in NAPS
- Candidates do not want to take up assignment where the job is not guaranteed after apprenticeship. Outstation candidates also need support to settle in the city of work
Is there a solution?
Yes, there is a better way. Promote the apprenticeship scheme through staffing companies. The Indian Staffing Federation has predicted that the 2.1 million temporary workers in the organised sector will increase to 2.9 million workers by 2018, making India the third largest market in the world after China and the US.
The government of India is the largest employer of temporary workforce, followed by IT/ITeS and retail sectors. What’s more important – the staffing companies can easily manage the paperwork required to implement the scheme. The current apprenticeship model completely ignores this approach. If public-private partnership must work, the staffing companies need to be roped in and the scheme amended accordingly.
Changes in staffing companies
The current apprenticeship scheme recognises only one party – the employer. In the staffing arrangement, there are two employers — primary and secondary. The corporate will be the primary employer (employer hereafter) and the staffing firm will be the secondary employer. Hence, we need to modify the apprenticeship scheme for temp staffing intermediation. Some of the required policy changes are:
- Secondary employer (staffing firm) and the employer should be allowed to register under the scheme
- 10% cap for apprenticeship induction should be calculated as per the employee strength of the primary employer, not the staffing firm
- 25% of apprenticeship salary should be paid to primary employer
- Staffing firm should be allowed to do all the paperwork on behalf of the primary employer
- Allot PMKVY quota on appropriate job roles to the training partner appointed by staffing firm, if the trainee is not yet trained
- Staffing firm should manage the entire NAPS scheme process and documentation
Private sector participation
If the apprenticeship scheme must work, the primary employer needs to see value in it. Private companies will not give apprenticeship opportunities to candidates who are not productive. The next obvious question is, how do we devise a model, which is a win-win for all parties involved – the employer, apprentice and the staffing firm.
How does it work
- Corporate employer gives a contract for large apprenticeship — up to 10% of its workforce to staffing company
- Staffing company sources and trains them as per employer specifications and onboards them on their rolls
- Candidate joins as an apprentice on the staffing rolls of the staffing company for one year but works for the corporate employer
- Staffing company enrolls and trains the student under PMKVY, along with the apprenticeship
- The staffing company supports the apprentice with motivational and job-related training
- Employer hires productive apprentice on their rolls as soon as the productivity is met
Staffing company is responsible for making the apprentice productive. The apprentice should be trained as per employer specifications initially, which will be paid by the employer. After coming on board, the staffing company will identify the right skill training course and arrange for the training as per the NAPS. It will track the performance on the job and motivate the apprentice to reach the productivity norm at the earliest to enable the apprentice to join the employer as a full-time employee.
At the end of one year, many trainees would have joined the rolls of a corporate. Those who could not make it, would have a skill certification as per the NAPS and on-the-job training, which will help them find a job in the same industry. The staffing firm will also help them find a suitable permanent placement.
Why government must support
First, there will be better compliance. Second, the apprentices will be taken care better by the staffing company and will be enthused by the opportunity to become a full-time employee once they reach the productivity target. The staffing firm will provide the safety net as and when the apprentice quits the programme. It will ensure that the apprentices are enrolled in the skill training and certification process.
Why employer must support
The employer gets a productive apprentice because of the initial training and the continuous emphasis on productivity. Second, the additional cost of staffing will be set off by the stipend pay-out by the employer. The entire paperwork is outsourced to the staffing company. The employer will have to pay only for the initial hiring and induction training but the productive apprentice will be worth the extra payment.
Why students must opt
There are many students who are not fit “as is” and hence rejected by the employer are the first target. Then there are those in smaller towns who desperately need a job but are not employable “as is”. This model enables the transfer to a permanent role once productivity norms are met and hence a candidate has a clear path to a permanent job.
(The author is Chairman, TMI Group)
Author: T. Muralidharan
Name of publication: Telangana Today
Date published on: 14/07/2018
published in: Hyderabad
Tags: Skill Development