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Jobs go abegging as unemployment rises globally

The education-to-employment challenge is a global one, and not unique to India, indicates McKinsey report
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First Published: Wed, Dec 05 2012. 07 50 AM IST
The inability of Indian firms to find people with the right skills for entry-level jobs is worrying because it highlights possible gaps in teaching and curricula at the school-leaving and graduate levels and in vocational training. Photo: Mint
The inability of Indian firms to find people with the right skills for entry-level jobs is worrying because it highlights possible gaps in teaching and curricula at the school-leaving and graduate levels and in vocational training. Photo: Mint
Updated: Wed, Dec 05 2012. 05 13 PM IST
New Delhi: It isn’t just India; even the US and Germany face a major talent crunch even as unemployment levels continue to rise, according to a report from consulting firm McKinsey and Co.
The result could be social churn and erosion of economic value, the report added.
Titled Education To Employment: Designing A System That Works, the report said that at least 40% of employers are unable to fill entry-level jobs because they can’t find people with the right skills. The number is 56% in Turkey, 53% in India, 48% in Brazil and 45% in the US. Among the nine countries surveyed by McKinsey, Morocco comes off best with only 12% of employers citing this as a reason for unfilled vacancies.
Interestingly, the report said 75 million young people remain unemployed.
“Around the world, governments and businesses face a conundrum: high levels of youth unemployment and a shortage of job seekers with critical skills,” it said. “Leaders everywhere are aware of the possible consequences, in the form of social and economic distress, when too many young people believe that their future is compromised. Still, governments have struggled to develop effective responses—or even to define what they need to know.”
The education-to-employment challenge—getting youth through the highway of post-secondary enrolment to building the right set of skills to getting placed in appropriate jobs—is a global one, and not unique to India, said Ramya Venkataraman, leader of the India education practice at McKinsey.
Still, the inability of Indian firms to find people with the right skills for entry-level jobs is worrying because it highlights possible gaps in teaching and curricula at the school-leaving and graduate levels and in vocational training.
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Similar gaps were highlighted at the secondary school level by the 2011 Programme for International Student Assessment report by the Organisation for Economic Co-operation and Development that put India’s secondary level teaching-learning outcome only above Kyrgyzstan in a list of 74 countries, and at the primary school level by non-governmental organization Pratham’s education survey.
According to T.V. Mohandas Pai, a former head of human resources and administration at Infosys Ltd, the “lack of skills will push up the salary, cost of in-service training and have an impact on the economy”. He added that the “global economy can grow by one percentage point more if we have enough efficient manpower”. Infosys, he said, could have saved $150 million (around Rs.825 crore today) a year had it been able to find enough skilled people and not engage in training.
Behind the skills gap are the differing opinions of education providers, students and employers when it comes to the skill level of students. The report finds that while 72% of colleges believe graduates are job-ready, only 45% of students and 42% of employers believe the same.
Pai said India would take 10-15 years to solve the problem because it doesn’t have the right approach.
A spokesperson for the National Skill Development Corporation, which seeks to train 150 million Indians by 2022, said part of the challenge is the belief that “skills-related training is only intended for those who could not make it in the formal system”.
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First Published: Wed, Dec 05 2012. 07 50 AM IST
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