Staffing the world | Rajendra S. Pawar

Staffing the world | Rajendra S. Pawar

Globalization and the outsourcing boom have undoubtedly transformed India. From a developing country, we are today an emerging economy and a superpower in the making. Over the last few years, India has clearly moved up the offshoring value chain—from being a low-cost destination, we are today known as a knowledge hub to the world.

But where do we go from here? The growth paradigm of the developed world requires fuel of another kind— knowledge workers and skilled professionals. The developed world’s requirement of skilled professionals is only going to increase with time. By 2020, the developed world will have a shortage of 40 million working people, says a report, “India’s New Opportunity—2020", brought out by the All India Management Association, the Boston Consulting Group, the High Level Strategic Group and CII.

Rajendra S. Pawar is chairman of NIIT Ltd.

For the developed world, this is a serious matter. Manpower shortages can cripple economic growth. They can escalate wage rates, thus reducing the competitiveness of these nations.

For India, the workforce shortages in the developed world pose a huge opportunity. Despite the increase in jobs, educated unemployment in India is on the rise. By 2012, India could have an unemployed population anywhere in the range of 19-37 million, the largest share of which will be educated youth. By 2020, India is estimated to have a surplus working population of 45-50 million people.

With this surplus working population, it may appear that India has all it takes to bag the 40-million-jobs opportunity. However, the reality is far from that. India is facing a peculiar manpower paradox—while it is a young country (over 50% of its population is below 25 years), it is facing a shortage of skilled manpower, even domestically.

The manpower crunch in India is more serious than we think. The reason—while urban India has witnessed stupendous growth in jobs, many of India’s children still drop out from school, girls are still not sent to school and youngsters are forced to take up jobs instead of completing their graduation.

Out of the 200 million children in the age group of six to 14, about 59 million are not attending school in India. Even those who get educated are often not employable. Every year, India produces 300,000 engineers and approximately two million college graduates. But only 10-15% of the graduates are suitable for employment in offshore IT and BPO industries. Nearly two-thirds of the 300,000 engineering graduates need to be reskilled so that they can get jobs in the IT industry.

Even those who find jobs need to undergo training and be reskilled. Today, India needs to skill/reskill one million working executives. Emerging sectors such as retail, banking, financial services and insurance are facing an acute shortage of manpower. The banking industry, which currently employs 900,000 people, is expected to add 600,000 more over the next five years. But it’s unclear how this increased demand will be met.

So, while there is a big opportunity knocking at India’s door, a concrete action plan is needed to convert it into reality. India needs a sharp focus on global talent development. This can be done by making education and vocational training more market-driven.

If the education system does not transform itself, we may lose out to other Bric economies, particularly China and Russia. In terms of sheer numbers, the opportunity lost can be huge. As per estimates, remote services could bring in $133-315 billion of additional revenue into the country every year and create an additional 10-24 million jobs (direct and indirect) by 2020.

The task of developing global talent can be approached in two ways—by companies/training institutes going global in order to develop talent in those nations, and by developing talent indigenously. At NIIT, we are working on both these models of global talent development.

Given our vast pool of qualified manpower, track records in service delivery in sectors such as IT, and lower costs, India appears poised to cash in on the 40-million-jobs opportunity. However, several initiatives on the part of industry, government, NGOs and industry associations are required to convert the opportunity into reality.

Clearly, the existing education and training infrastructure cannot meet all the manpower needs. We need to begin from the primary schools in villages and cities, work with underprivileged children and encourage them to get educated. We need to change our education system and focus on job-oriented courses.

Education and vocational training needs to be aligned with market demand. This can be done by mapping the demand for professionals today and by projecting future demand and working towards enhancing the skill-sets needed for these jobs.

India has some natural advantages—it has the world’s largest English- speaking population. But countries such as China are working overtime to cash in on the global labour crunch. One-fifth of the Chinese population is learning English. British Prime Minister Gordon Brown has said that the total English-speaking population in China will outnumber the native speakers in the rest of the world within two decades.

Therefore, there is a pressing need to act fast. From an outsourcing hub, India needs to transform itself into a repository of talent that can feed global demands for a skilled workforce. We need to focus on global talent development so that an increasing number of Indians can find jobs overseas or in offshoring outfits. Given India’s track record, we have all it takes to meet the world’s global talent needs.