Contrary to popular public perception, the challenge of skill is not just for white-collar jobs. While one does experience the challenge, largely of quality, around campus hires, whether diploma holders, graduate engineers or MBAs, there is a crisis in the making for skills at the shop floor operator level.
If you look at the numbers, we do hire annually about 250-300 fresh engineers. While in terms of number, it may not be as significant as a large software services firm, the challenge of getting the right skills remains a challenge. We compete for talent on the best campuses not just from within the industry, but even across sectors. That makes the paradigm more complex, because now people have a choice as to which sector they want to go to and if the sector happens to be automobile or automobile manufacturing and design, then there are the kind of options where there are Indian companies and the MNCs in India, which are very exciting. Hence, competition for fresh top-end engineering talent is indeed intense.
When you look at India, there is a skill shortage and we continue to have challenges at entry and middle level of different functions, management and good talent, great talent is extremely scarce across functions, across businesses, across industries. That is the challenge of every HR or CEO.
In our own experience so far, Tata Motors considerably has enjoyed a very high preferred employer status, so we do not have a problem of getting people at the entry level. We continue to get one of the finest people from campuses and the management side; a huge number of such people are actually those who have done their summer internship in Tata Motors. But when we have to hire laterally, the quality of talent definitely becomes scarce. They bring fundamental knowledge and given a highly structured one year induction program that they undergo within, they are actually reasonably ready to be in productive jobs.
There are two ways in which the automobile sector gets operators. There are those who actually enjoy the rank of regular employees and there are others who work as contractual employees. But the challenge is the same. While we would look for people with a certain level of skill and experience, what you get is anything but that. Some of our automobile plants are in more remote areas, some of them have restrictions about employing local people, and at this level you do not find too much of transmigration happening for these skills. So, when the challenge for companies is that they might not have enough people in the system, how do they staff up? This is where companies like us have a very elaborate and massive effort at broad basing our catchment, getting the guys better trained, even at times looking beyond the ITI qualification, going beyond the education value chain, getting them into our system, running various programs within the company like a 2 or 3 year traineeship or apprentice program.
We typically run schemes, which are both apprenticeships and elaborate skill building workshops that are done over 2 to 3 years. These are reasonably time consuming and cost money. Clearly, you have to invest in the kind of infrastructure in workshops, instructional designs, just making sure that these guys actually come and work so on and so forth. If you donot do that, you will not have the skills, which the company needs to be able to run a plant. It includes theoretical as well as practical lessons on the ground including on-the-job kind of experiences. It is a very well designed comprehensive program for a person who just comes as a raw rookie. We internally benchmark and say now this candidate is fully trained and certified to perform the kind of job that is required. As part of the on-the-job training, they also work under supervision, but a formal kind of a confirmation happens only after about 2 years.
The skill gap we experience varies from plant to plant and I am adding both regular employees and contract employees and it could typically range from 10-30 percent. You don’t always have the confidence that now you have got the people, that they are all going to be there, their skills are going to get better, etc. That confidence does not always happen, because when you have someone on contract as part of a process, they cannot be deployed and let in, they have to let go and next time you are looking for them, those guys are not available. Either they have left the industry, or have moved away or don’t want to work. And once again you are training another set of new people. So, if there are regular employees, you run them through massive training and experience before you formally absorb them. But what organizations need today is lot more of flexible manpower and that becomes a challenge.
We also have another unique example of a growing skills crisis. In our industry there is something called the commercial vehicles industry which is trucks, etc. Even if you have increased number of trucks and vehicles, it may not actually be bought because you will not have the number of drivers to drive these vehicles. Availability of drivers is going to be a huge shortage. At Tata Motors we have done huge efforts and campaigns, many in association with NGOs, others in partnership with government to run driver training schools, to train people to qualify as drivers.
We participate to help upgrade the ITIs in terms of infrastructure, quality of faculty and curriculum. We focus typically on the basic mechanical and motor mechanic trades. The other area that we have worked with the government and with NGOs is about getting commercial vehicle drivers to be trained. So it addresses a larger skill issue of the industry and it also allows the government to generate long-term sustainable employment.