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Transcript of Employment and Employability Issues, Challenges, Opportunities and the Public Policy Context NHRD...
Employment and Employability Issues, Challenges, Opportunities
and the Public Policy Context
NHRD Chennai ChapterSavera HotelSept 22, 2008
• India– GDP 1 trillion; Double in next ten years– Why doesn’t it feel right?
• Labour Market Crisis– Personal and Existential; people supply chain company– Failure in Three E’s; Education, Employability, Employment– Unique demand side; unemployability bigger problem than unemployment
• Five Labour Market Transitions– Farm to Non-Farm– Rural to Urban– Unorganized to Organized– Subsistence self-employment to Decent wage employment– School to Work
Background
• Learnings– Poverty reduction needs opportunities and human capabilities– Growth is a necessary but not sufficient condition for employment creation– Need institutions, processes and resources at three levels:
– Immediate Matching Connecting Supply to demand– Medium Term Mismatch Repairing Supply for demand– Long Term Pipeline Preparing Supply for demand
• Policy Agenda– It’s raining money but problem needs more; absorptive/ transmission– More cooks vs. new recipe– Money and Mandate
Background
What is the problem?
Poor HRD Regime
Low penetration of education
Low returns to education
Regulatory; Accreditation
heavy but outcome light
Not work ready;
unemployment highest among
educated
58% of youth suffer some
skill deprivation
Uneven returns to education
10+2+3;Exams, No
Multiple intelligences
What is the problem?
Poor Vocational Training Regime
No outcome linkage;
effective/ self-sustaining
Scalability; Baby vs. dwarf
Entry Gate/ Exit gate
Centre regulates but state delivers
Institutional governance
Not self-healing; NOC
code mismatch
Apprentices; learning by doing/ while
earning
What is the problem?
Poor Employment regime
Lopsided GDP
Missing Middle; hero/ zero?
Subsistence self-
employment
Exploitation; friendly fire
Minority rule
Unorganized Sector
Employment Elasticity; labor
saving bias
What is the urgency for reform?
India
Unviable Agriculture; Productivity
Demographics;1/4
Matching failure; People
to Jobs
Regulatory arbitrage e.g. CLRA
Inability to afford social
security
Labour market Diversity;
Outsider Access
Mismatch; trespassers
1. Immediate MATCHING Connecting Supply to demand
2. Medium Term MISMATCH Repairing Supply for demand
3. Long Term PIPELINE Preparing Supply for demand
The Agenda
The Agenda
Matching
Employment Intensity; labour
laws
Apprenticeships; Satyendra
Incentivizing Organized Sector
Employment Exchanges
Assessment; job, repair, certification
The Agenda
Mismatch
Separate Repair from Prepare;
3 kinds of unemployability
Measure and publicize
outcomes; Sunshine
Separate financing
from delivery
Livelihood agenda for EEs/ melas
Nudge last mile repair
privatization: Risk sharing
Link financing to outcomes;
pay for yield
PPP policy; Assets,
Placement
The Agenda
Pipeline
English;Windows, MigrationPolytechnics
Soft skills in college/ schools
Explode Capacity;SSA, Coverage of
12th class
Regulatory Revamp
Public Policy Campaign
• Our strategy– Research Based Advocacy; Reports– Press, Industry Associations, Conferences– Planning Commission– State Level Engagement
•Our message– Mutation; temping, labour, skills, equality of opportunity (3Es)– Moderation. Dosage makes the poison; Paracelsus– Move from concurrent list to state list
•Our plan– No beheading but death by a thousand cuts (e.g. exclusions)– Not time for big fight, but will happen– Outlast if not win right now
Reflections – Public Policy Campaign
• Job creation is a policy orphan– Too long for politicians of one-innings; beyond obvious time horizon– Too systemic/ cross functional for bureaucrats; too small/big
• Systemic Issues– Design Flaw; Asymetric payoffs for Ommission and Commission – Classic “distributional coalitions”; vocal minority hijacked agenda– Status quo bias; more cooks vs different recipe– Hardware vs Software– Concurrent list; policy orphan
•Learnings – Satyagraha argument works; million negotiations of democracy– Politicians equally frustrated with delivery systems e.g. NREGA– Hidden constituencies do not support publicly. Competitors?– Common Law country; court system works– Reform not good politics yet; but find hook; Job Melas, Apprenticeship Act
Challenges
Temping Companies
Regulatory Context
Gross Margins
Benefits Design/
Infrastructure
Skill Crisis
Scale Player; Spread and
Customization
Competitors; regulatory arbitrage
Banking Infrastructure;
KYC
Why has the Industry grown?
Temping Companies
India exploding
Test Drive
More competitive
markets
Ability to find people
Regulatory Arbitrage
Labour Laws/ Temp productivity
Fudge Headcount
Strategy
Temping Companies
Size
Public policy campaign
On demand temping
Massive IT investments
Stay Alive
Make exogenous variables
endogenous
Superior plumbing
Public Policy Case
Teamlease
Reduce Unorganized
Arbitrage
Apprenticeship Effect
Unemployment Reduction;
liquidity provider
Costs of Social Security/
Unemployment Insurance
Good is not enemy of
great; NREGA
Access for Labour Market
Outsiders
ImprovedCompetitivenes
s
Closing Thoughts
• India; WSJ in 1994– But largely fixed sins of commission not omission– Skill deficit is worse than infrastructure deficit; inequality
• Mismatch– Biggest problem and supply creates its own demand– Massive repair assessment– Re-architect Financing layer– Re-architect Training/ Repair layer– Credible Certification Layer
• Labour Law Issue– Corporate India not victim; Thorn– Transmission Losses; Breed Unorganized employment, capital substitution
Closing Thoughts
•Way forward– Solution not in Totalizing or Microfragmenting– Not only Projects but Policies; ICPs are weather of the moment– Not only Money but Mandate; Leaky pipes, Waste– Mission mode; three levels, three legs of ecosystem
•Tryst with Destiny– Missed appointment; 300 million– Unique time in India to create equality of opportunity– Difficult but not impossible. Daily spectacle of the hero/ zero tragedy– An unemployed or unemployable Indian is not a free Indian– Who? When?
Employment & Employability Issues, Challenges, Opportunities
and the Public Policy Context
NHRD Chennai ChapterSavera HotelSept 22, 2008