Everyone knows apprenticeships or almost everyone. Over last decade the momentum in apprenticeships have picked up by the employers which could be an outcome of reforms to make it easy for employers or the incentives offered by the government to make it lucrative or inspired by the success stories of some of the employers or the fear of missing out or the fear of receiving the notice from the authorities or a combination of all. Whatever be the reason, employers are exploring apprenticeships. There is a merit in doing apprenticeship and hence it’s essential that employers should understand and realise the “why” of doing apprenticeships. Apprenticeships is a multifaceted tool to take care of finding right talent, enhancing productivity, controlling attrition and hiring costs, and stop viewing it as a compulsion to be compliant with the law.
An organization creates a bigger pool to fish from the right talent through apprenticeships. Give opportunities to people who meet 60-70% criteria to gauge and hone the desired capabilities through apprenticeships and create the talent in house. Go beyond the regular colleges and locations to hire future potential employees, evaluate them through apprenticeships and identify the right person for the job. The best way to evaluate the talent is to go through the apprenticeship route. No matter how much robust selection process an organization may have to recruit, the efficacy of the hire is best judged when the person hits the floor. Make your selection fool proof. Creating talent is always more cost effective than talent acquisition. Saving hiring cost is directly related to the number of apprentices absorbed into employment. Higher the absorption rate of apprentices into employment, higher the savings. The structured mechanism of learning through apprenticeships builds a solid foundation for productivity of the people and the organization that reduced the cost of quality. And the real time availability of the talent reduced the potential productivity loss due to attrition.
There are short term benefits and long terms returns in doing apprenticeships. But many employers are still ignorant of the merits and have stayed away in spite of being aware of the system. Let’s look at a few facts which should be encouraging for the employers to engage with apprenticeships...
- In the Apprenticeship Rules of 2015, the concept for Third Party Agent (TPA) was introduced to hand hold employers in executing apprenticeships. Over the last 5-6 years the NSDC has appointed many TPAs to support the employers in end-to-end execution of apprenticeships.
- The introduction of Optional Trade in 2014 amendment opens the door for services sector and for the newer industries to appoint apprentices.
- To encourage the MSME segment to engage with apprenticeship, subsidy is being offered to organizations under National Apprenticeship Promotion Scheme (NAPS) to avoid dent in their pocket, and the subsidy is extended to the large enterprise as an incentive to engage with apprenticeships.
- Registration process for organizations through the portal has made it convenient for organizations to get started, and for the organizations which have presence in four or more locations can apply centrally to get approval through the portal.
- The ACT has been decriminalized in the 2014 amendment and allows employers who engage with minimum 4 employees can appoint apprentices.
- Organizations which run multi shifts get the flexibility of engaging with apprentices of 18 years and above in odd hour shifts which get approval from the authority.
- Under the New Education Policy, the employer can collaborate with academia to create a customised degree apprenticeship for relevant job roles in the industry which creates a consistent supply chain for apprenticeship engagement and fix the skills crisis in the industry.
In the 2021 budget, the Finance minister announced more amendments to the Apprentices Act to make it flexible for the employers and giving more powers to execute and sale the apprentices. In 1962, Gary S Becker a nobel Laureate in the area of Human Capital suggested that relevance of investment in learning by employers to create their own employees. We hope more employers come forward to actively participate in overcoming the skill crisis instead of looking for outward assistance.