Developing Skills to Alleviate Poverty

This essay is designed as a straight-to-the-point note for all those who wish to explore this specific area, and is a culmination of my experiences. I have kept it based in facts & logic.

Before you start reading, let me share that I am a firm believer in the power of commerce and believe that this century is about reaching out to the bottom of the pyramid by building economic models that are designed to unleash the value therein.

BACKGROUND OF THE PROBLEM

UNDP identifies 5 barriers to poverty reduction at the Bottom of the Pyramid (BOP), and Skill Barriers is one of them. Education and pre-employment training are among the most important and effective means of building skills and combating poverty. The importance of education as a prerequisite to employment that offers a living wage and opportunities for advancement has increased as more routine work has been automated. The best jobs often go to persons with advanced academic and technical skills, as well as an array of adaptive non-cognitive skills. (Al-Atiqi, August, 2014). It goes on to mention that the opportunities lie in adapting business models to address skill gaps, promote these learning opportunities amongst the groups, leverage knowledge about skills gathered through ancillary activities, and develop education infrastructure. (Al-Atiqi, August, 2014)

The BOP proposition views the poor primarily as potential consumers i.e. as untapped purchasing power. Providing increased consumption choices to the poor will increase their welfare, assuming rational consumers. It is almost an “item of faith” among development economists that the poor act rationally (The Economist, 2007) (Karnani, 2009). So, pricing becomes an important element of the whole proposition.

The problem is not just economic. The proficiency of the learners in school system (and in higher education) is a barrier to growth, as well. While they can’t be attributed to poverty status, but the outcome of the conditions at school, whilst improving at a slow pace, is not significantly impacting the economic conditions at the BOP. The higher education system is producing graduates in all streams with most of them not having a clue of what they will end up doing.

The GER[1] (Gross Enrollment Ratio) of ~73% at Std. IX & X, reduces dramatically to 19.8% girls and 22.3% for Std. XI & XII, with the highest drop-out happening after Std. VIII, and the pass percentage in the Std. X & XII Board Exams stand at ~75%. (Mohanty, 2014)

In higher education, out of the 6 lakh engineers that come out annually, only 18.43 percent of them are employable for the software engineer-IT services role, while 3.95% are appropriately trained to be directly deployed on projects. (AspiringMinds, December, 2014). The low employability among engineering graduates is a cumulative outcome of poor education standards and higher demand of skilled employees thereby creating a drastic skill gap in the country. National Employability Report reveals that corporates look for candidates who have their basic skills in order and do not require much training upon being hired. Hence, candidates with lower quality of skills in comparison to basic job requirements are left out in the entire process. (Aggarwal, 2014). With nearly 2 million engineers being churned out every year, not more than 250,000 are ‘employable’.

The percentage of students passing out of Arts, Humanities & Science streams, all combined, stands at 41.35%, and that of Commerce stream stands at 15%, which means that roughly 3 million people who do not pass the under-graduate level are joining the marketplace for jobs.

Overall the data from the National Sample Survey Office (NSSO) shows that 13 out of every 100 Indians between 5-29 years did not attend school or dropped out because they did not consider education “necessary”. This trend is more marked among rural students with 34.8% of drop outs (including those who have never attended school) indifferent to studies. A far lower proportion of urban students—about 22.8%—showed a lack of interest in education. Interestingly, this tendency peters out among older age groups. In the 15-19 years category, only 17 out of every 100 non-attendees called education unnecessary. In the 20-24 years group, it was even lower at 12%. This data reiterates other evidence which shows that as Indians get older, they consider education necessary.

“It is the educational system that is not encouraging people. It is much easier to change jobs than to change schools/ colleges these days with all the formalities needed. And once a child is out of school for too long, admissions become even more difficult,” said Himanshu, assistant professor at Jawaharlal Nehru University, Delhi.

That said, among dropouts and non-attendees overall (5-29 years), the need to supplement household income still remains the prime reason for not pursuing studies. The data from the NSSO mentioned that this was the reason cited by 36% respondents. Another 26.5% said they couldn’t attend school because they had to pursue domestic chores. What’s surprising is that the percentage of non-attendees citing domestic chores as a reason has spiked between 2004-05 and 2011-12.

So, the common thread in school dropouts, graduates of regular streams, and engineers, is that neither of them are ready for any kind of employment, whether wage-employment or self-employment. And even with all the new poverty-alleviation policies & practices that the government has launched, this does not help the economic condition of the families. And when these students are from BoP, the impact multiplies geometrically. This basically means that the bigger challenge is the unavailability of relevant skill-sets to increase one’s family income.

India is expected to be home to a skilled workforce of 500 million by 2022. About 12 million persons are expected to join the workforce every year. This talent pool needs to be adequately skilled. While the school education sector is about 227 million in enrolment, the combined enrolment in higher education and vocational training is about 15.3 million. By limiting to this to the technically and vocationally qualified and skilled workforce, primarily comprising of ITI/ITC (1 million), BE (1.7 million), Polytechnics (0.7 million), we can observe that the current pool of skilled talent is around 3.4 million[2]. (ICRA, 2010)

12 million people joining the fray to get jobs every year, but unfortunately, they do not have the right skill-sets.

Apart from all of the above, in a study done by City & Guilds, over 90 per cent of the workforce agrees that programmes like Skill India will provide the next generation with the right set of skills to support India's growing economy. The emphasis on the need for skill development is not only identified in India but globally as well. Additionally, the same report quotes, 91 per cent Indians feel threatened that their skills will become obsolete in the next five years. (Kaur, 2016)

This problem is the one that needs to be solved. So, while there are a whole lot of companies trying to provide skill-based training to people, the challenge is to connect opportunity to skill-sets; and there are a handful operators who can do this and are able to do this.

THE OFFERING

The basic deliverable of any proposition has to directly impact an individual’s roti-kapda-makaan (food-clothing-shelter) by ways of an improvement in the earning levels of the individual; and that need to be impacted by strengthening our skill development model.

The approach towards skill development must focus on the opportunity first, followed by identification of the resident skill set of the prospective incumbents. This needs to be followed by identifying the right faculty, the right classroom infrastructure and the right on-the-job learning environment for the skill to be developed.

The answer to the problem is not a simple task of creating ‘a’ product. One would need to create a model that presents differentiation in the product offering and the service offering, and for different target groups.

Keeping in mind the basic disposition of learners of the generation from the Base of the Pyramid, the delivery of the learning needs to happen in a physical environment, but technology needs to be integrated in form of online learning and augmented reality to make the learning process even more efficient & effective whilst reducing the time-to-competency, hence reducing the time taken to start earning from the time one decides to make a change in oneself.

For any course to be put up, the two simple questions to which we seek an answer.

a.       Does it lead to an immediate opportunity, whether wage-employment or self-employment?

b.       Will the skill-set be aspirational for the relevant target audience?

The target group of learners for any proposition can be segregated into buckets…

Bucket 1: Drop-outs: Those who have left school after Class X or have not pursued studies after Class XII.

Bucket 2: General Graduates: Those who are about to graduate after 3 or 4 years of post-school education from the fields of Arts, Commerce, Science, Nursing and Pharma Studies

Bucket 3: Engineering Graduates: Those who are studying or about to graduate after 4 years of studies in Engineering from the fields of IT, Electronics, Telecom, Electricals or those who have a desire to work in the digital world.

While the addressable market has been outlined earlier, the larger question is about the learners’ willingness to pay for the value proposition. The skill development industry works in three ways with regards to ‘pay-out’. The Government accounts for most of the sponsorship in the field of skill-development, and then there is Corporate CSR as a source of funds, and finally, there is the student paying for some of the courses.

In line with the rationale of students paying for the course, the following two points need to be noted here.

·       Colleges: Today, in the skill development space, most of the operators are private entities, most of whom do not have infrastructure. What they do is that they go for franchising and that is how they are able to deliver. In yesteryears, most of the skill development was sponsored by the Government, and that happens even today, but the scope for the student-paid model has not been explored much. On the other hand, we have colleges who have been used to student-paid models since their inception. However traditionally, colleges and universities, typically have not been engaging in skill development as they feel that developing skills via a short-term program and without gaining wisdom, one will not be able to do the job. The mismatch is that colleges do not understand that skill development and regular education do not share the same place; and while the former prepares them for a specific trait, the latter prepares them for a wide-ranging set of attributes that students need to have to be successful in life. However, the landscape is changing and colleges need more funds and for this a lot of them are wanting to monetise their excess infrastructural capacity which they have not been using, however, barring a few enterprising ones, none of them have the rest of the things that they require such as faculty, courseware and industry connect. The other advantage that they have apart from infrastructure is that they have captive audience, and this audience, like any other audience, is looking for avenues to secure their feature in terms of meaningful employment; and some would want to opt for wage-employment, some would also want to be self-employed. If the proposition allows that, then they (and their parents) would be willing to pay.

·       Aspirational Courses: Like the Kano Model, undergoing skill development is not aspirational (basic need), what students aspire to is for developing those skills that would help them get the jobs that they want as a career or the ones which pose an immediate opportunity for earning (performance needs). The demand for an aspirational course that can help secure a higher family earning is inversely related to the current economic status of a family; the demand is the highest at the Bottom of the Pyramid. The real source of market promise is not the wealthy few in the developing world, or even the emerging middle-income consumers: It is the billions of aspiring poor who are joining the market economy for the first time (Prahlad & Hart).

So, students from the Bottom of the Pyramid, and students otherwise, will be willing to pay only if they see considerable and immediate value in what they are learning in form of an immediate impact.

However, the key driver in this case is that courses provided by existing training providers are affordable if supported with a loan product. In 2011, National Skill Development Corporation (NSDC) had also identified the points of risk and their mitigation solutions (ISB, May, 2011). In the recent times, with the launch of Pradhan Mantri Kaushalya Rinn Yojana (PMKRY) has been launched which makes loans, ranging from Rs. 5,000 to 150,000 available to students with no guarantee.

THE COMPETITION

I talk about competition because for an impact to be made, operators need to find this opportunity feasible. The competition in this field is growing, but is not intense as yet, and with the size of population in India, the efforts made till date are rather insufficient.

In India, about 12 million people join the workforce each year comprising highly skilled (constitute a minuscule part), skilled, semi-skilled and unskilled work force. The last category constitutes the majority of the population entering the workforce. However, the current skill capacity of the country is about four million. Hence, skilling and technical education capacity needs to be enhanced to about 15 million. (E&Y, 2014)

The advantage clearly lies in an operator’s ability to create razor sharp IP, build engaging courseware, develop trainers out of operators (supervisory cadre), profile and then counsel the students accordingly towards the right programs, engage learners digitally, and build their social skills to become successful in this world.

Having said that, there are underlying forces that compel customers to pay for services and these trends make markets develop and grow. The market drivers for skill-development initiatives are

·       Customer’s aspiration drives the demand for courses that lead to an increase in household income or build one’s sustenance and this is possible by linking learning to jobs or immediate opportunities for self-employment opportunities

·       Government policies around sponsorship of skill-development programs is another key market driver.

o   Pradhan Mantri Kushalya Vikas Yojana (PMKVY) from Min. of Skill Development & Entrepreneurship and Deen Dayal Upadhyay Grameen Kaushalya Yojana (DDU-GKY) from Min. of Rural Development and some 20 0ther schemes from various ministries of the Government have led the way in building momentum in the ‘Skill India’ initiative.

In its Twelfth Five Year Plan, India has set a tough challenge in the field of vocational education and training in its approach paper. It aims to increase the percentage of workforce with formal skills to 25% at the end of the plan. It is estimated that 50–70 million jobs will be created in India over the next five years and about 75%–90% of these additional employment avenues will require some vocational training. (E&Y, 2014)

I hope this note is of help to all those who wish to make a foray into the world of skill development or wish to understand the landscape in depths.

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[1] Gross Enrolment Ratio (GER) is the total student enrolment in a given level of education, regardless of age expressed as percentage of the corresponding eligible official age group population in a given school year.

[2] This does not include other streams such as other forms of higher education and research and is limited to those who can fit in as workers, supervisors, entry to mid level managers in large portions of the manufacturing and service sector, either organised or unorganised.

Target - Performance Improvement

My journey in the world of learning started more than a decade back. In the past decade, the first half was focused on learning & delivering, and the latter half is marked by learning, following AND facilitating. Whilst helping out others, I have always introduced with my note below which has been shamelessly inpired by Bob Mager's book, 'What Every Manager Should Know About Training'; and no, this is not plagiarism, but my effort to ensure that people, CEOs and CLOs, get the gist of the thought. My trademark 18-day 'Trainer BootCamp' starts with the concept of what training can / can not do, as mentioned in this note, and I have taken about 500 trainers through it during various bootcamps.

________________________________________________ __ __ __

Performance Improvement

is

the ‘T A R G E T’

Performance is key to a person’s success and that is integral to the organization’s success. However, the organization is always surrounded by challenges, which hinder performance. These Performance Challenges, specifically in the area of ‘the work’, ‘the worker’, and the ‘the work environment’, are a result of a measured disparity between the ‘desired’ and the ‘actual’ state of work performance or the expected disparity between the ‘desired’ and the ‘actual’ state of work performance.

This disparity, once broken down and analyzed, leads to a specific set of gaps. These gaps could be in the 3 specific areas, such as, knowledge gaps, skill gaps, and attitudinal gaps (including Motivation & Expectations).

These gaps could be handled in many a ways such as by giving Training interventions, Coaching interventions, Consulting interventions and Non-Training interventions. Training interventions help build the skills and self-efficacy in the trainees.

Skill

If people don’t know how to do it, they can’t do it. No amount of incentives or exhortations or threats will get them to do it. Without skill there can be no performance.

If they don’t know what to do and how to do it, and if they need to be able to do it, then someone will need to teach them to do it. But skills are not developed merely by listening to someone talk about how to perform. Skills are developed and strengthened through practice, through the actual doing of those work tasks.

Self-Efficacy

Self-efficacy refers to the judgments people make about their abilities to execute particular courses of action – about their ability to do specific things. For example, “I know I’m a good golfer;” “I know I can beat my sales record of last year;” “I know that my fencing skill is the best in town.”

Self-efficacy isn’t about the actual skills people have; it’s about the judgments they make about the strength of those skills. People with low self-efficacy don’t believe they can do the things they actually can do. “Oh, well, I didn’t take the job offer because I didn’t think I was really good enough.”

Don’t confuse self-efficacy with self-confidence, which is a much more generalized way of referring to one’s feelings, and often refers to the expected outcomes of one’s actions.
Why is self-efficacy so important?

When people don’t judge themselves able to do something they actually can do, they may not even try to do it. They may avoid trying, regardless of the strength of their skills. Therefore, if people are given the skills they need, but not the self-efficacy, they will be unlikely to perform those skills on the job. No self-efficacy, no performance.

There’s more. People with strong self-efficacy will not only be more willing to try, they will be more willing to persist in the face of obstacles, failures, or embarrassment. They are less likely to give up in the face of adversity. Thus, strong self-efficacy makes people less vulnerable to on-the-job conditions that aren’t always supportive. How can you get people to “try, try again” in the face of difficulties or failures? Make sure you (and anyone training others) apply efficacy-strengthening techniques.

Unfortunately, the development of a skill isn’t automatically accompanied by a development of strong self-efficacy. You may recall instances in which people with great deal of skills didn’t believe they had the degree of skill they did. You’ve probably seen people hang back because of a lack of self-efficacy rather than because of a lack of skill.

"When people don’t judge themselves able to do something they actually can do, they may not even try to do it…"

Opportunity to Perform

Without the opportunity to perform, there will be no performance. Opportunity means being provided with items such as:

• The permission (or authority) to perform
• Information about expectations
• Tools and equipment needed to perform
• A place in which to perform
• The time to perform

If you were an accomplished sitar-player but didn’t have a sitar, you wouldn’t be able to perform sitar solos. No sitar, no performance. By the same token, if you had a sitar but lived in a state where playing the sitar is prohibited, you wouldn’t be able to perform (without running the risk of being caught by the anti-sitar police). If you don’t have the tools to do your job, or a place in which to do it, you won’t be able to perform. No opportunity, no performance.

But there’s more, because mere opportunity to perform is not enough.

You can’t store training! Use it or Lose it.

Or, as the trainers say, use it or lose it. Unlike fine wines, skills do not improve merely with the passage of time. Think about the courses you took in school. Are you as sharp on each of those subjects as you were when the course ended? No? Why not? You’ve forgotten a lot of the information or skills because you haven’t used them – because you haven’t practiced them. Essentially, Use it or Lose it.

Supportive Environment

Suppose that every time you sat down to work on a budget, your boss came in and whacked you about the head and the shoulder with a rolled newspaper or showered you with verbal abuse. How long would you continue to work on budgets? Or, suppose that you were ridiculed by your peers every time you offered a suggestion at a meeting? How long would you continue to offer suggestions? Or, suppose that every time you made a worthwhile suggestion you were requires to head the committee organized to implement it? Or, suppose that every time you came in under budget, your budget was cut off for next year. No supportive environment, no performance.

A supportive environment is one that encourages desired performance. It is environment in which workers are given reasons (incentives) to perform in the desired manner, a clear description of the results to be obtained and the standards to be met; it is an environment which the employee’s world gets a little brighter when they do it right, and a little dimmer when they don’t. When the consequences of performing well are upside down – that is, punishments for doing it right or rewards for doing it wrong – desired performance will be difficult or impossible to sustain.

Performance then requires the presence of skill, self-efficacy, opportunity to perform, and a supportive environment. Take away any one of those ingredients and the performance will suffer, or worst, will never appear.

The diagram above although shows ‘interventions’ at a cross-section of gaps, however, it is just a diagrammatic representation.

Different types of gaps require to be treated in different ways. The ‘best way’ is the way in which the audience internalizes best and the one which impacts the learner’s performance as per the desired levels.

Gap Type                             Input Type Knowledge                            Training, Non-Training Skill                                        Training & Coaching Attitude                                 Training, Coaching, (including Motivations       Non-Training & Consulting & Expectations)

We should remember that all forms of gaps are not trainable from a corporate perspective, wherein time does not have an infinite value.

One, however, needs to keep in mind that Training is not the only solution for all kinds of performance problems, however, the propensity of most ‘trainers’ is to resort to ‘training’ as a solution to one & all. It’s like giving paracetamol for all kinds of ailments.

The Birth of Massacre

My car breaks down on deserted highway, and with no help in sight, I push her across the emergency line, lock it and start hailing for help. A kind trucker stops to give me a lift to the nearest garage.

The garage is a rickety shanty with old worn out cars gathering dust and allowing the wilderness to take over. Its evening and I want to be on my way as soon as possible; and the sight wasn’t too welcoming. At a distance I find two people conversing. By the looks of them, the guy in the greased overalls was undoubtedly the mechanic, and the gentleman in formal yet casual attire seems to be a travelling salesman. As I walk close to them, I garner from the animated movements of the salesman hands and fingers that he is furious about his car which doesn’t seem to get over its constant hiccups. As I try to follow his finger to figure out his bain, the car strikes me to be one from the carburetor era. On paying closer attention to the conversation I realize that the salesman is actually telling the mechanic about just not the symptoms, but also the problem with the car.

These travelling salesmen are sort of a walking encyclopedia on everything, and why wouldn’t they be; they travel so much. Anyways, once the salesman is through with his explanation, the mechanic gets on to his job. But before he does so, he assures me that he would be with me in the next twenty minutes. The twenty minutes seem like twenty hours, but eventually, the salesman drives away after having haggled for the cost of labor for about five minutes.

Once he is gone, the mechanic walks up to me, and asks me, “Sa’ab, so what is the problem with your car?”. My response was something he didn’t expect. I said, “I don’t know the problem, but the car just stopped in the middle of the road. So, if you could come along, we could tow the car with the help of your truck, and then you could mend it for me.” By the time I was through with the sentence, the mechanic was ready with his tow truck. He said, “Sa’ab, I shall try to mend it there itself, but in case it doesn’t, then I will have to tow your car to the garage to figure out the problem. I can’t give you an estimate of time required and money till such time I see your car”. Seemed rationale, and we got into his tow truck. With about twenty kilometers to travel, I tried striking a conversation by asking him about the travelling salesman. He said that the carburetor had no problem, and it was the quality of petrol which was creating a problem and that at best the air-intake filter that had to be dusted. I ask him as to why did he then clean the carburetor and change the filter and change one of the spark plugs.

His response astonished me. The salesman had been in the garage for over two hours before I came, and had been bickering about all of the above problems, and was insistent about those repairs & replacements. So, our dear mechanic went ahead and did all of those things, and also told him to change the station from where he refuels, but he is sure that the salesman will come back the next day. When I asked him as to why he did what he did, he was emphatic about the fact that he believes that these travelling salesmen know more.

My car’s repairs took almost two hours, but I couldn’t tell him that I was a travelling salesman too.

I’ve witnessed many a occasions such as these where I have met clients who seemed to know the problem, and while in most case the diagnosis is flawed, trainers jump to the idea of providing training as a solution to the problem.

Training would do no good!