Skilling India: As Unemployment Soars; Here’s a Solution
By: Rajat Gupta and Saipriya Sarangan
Youth employment is a global problem, with more than 73 million youth unemployed worldwide. In India, the unemployment rate among young people is almost 13% (compared to 4.9% overall) and skill gaps are large across industries.
Underemployment is even more acute. India’s skilling problem is a classic conundrum. Young people desperately search for entry-level jobs while employers, ironically, are unable to find people with the right skills, or could face a monthly turnover sometimes as high as a fifth of their workforce. The ranks of young, often educated, unemployed people are building up.
The imperative for skilling young people is well-recognised and has been flagged as a national priority for almost a decade, with significant initiatives being launched by the government. However, results have been mixed.
Programmes have reported high dropout rates, low employment percentages and continued attrition post-placement, leading to dissatisfied employers as well as disillusioned youth. Providing ‘skill-training and certification’ alone cannot be a solution to the problem. There is clearly a case for going back to the drawing board.
July 15, the UN World Youth Skills Day, draws attention to the need to equip young people with skills, setting them on a path towards a fulfilling career. In 2015, McKinsey Social Initiative (MSI), a global independent non-profit, launched Generation, a programme that aims to do exactly this. Founded and partly funded by McKinsey & Company, MSI is also supported by USAID and other corporate partners.
Our experience with the project illustrates that to be successful, skilling needs to be much more than training—it needs work on every link of the employment chain—from sourcing (of candidates) right up to post-placement mentoring, supported by measurement at every step.
Looking beyond training—sourcing, counselling, connecting to employers
We launched our pilot for Generation in India in the healthcare sector, an industry that faces a shortage of trained people at the entry-level. This is a seven-week programme to train youth to become General Duty Assistants (GDA)—providers of care to patients in hospitals, under a nurse’s guidance.
Our approach was to work with employers to define relevant skills and behaviours and to design a practical curriculum, focusing on ‘soft’ skills like punctuality and persistence. Finding willing employers as well as students, in large cities like Delhi and Hyderabad was not difficult.
Our graduates also performed well on the job. With an innovative curriculum and employer-engagement, we had expected the programme to sail through, but results proved otherwise—many graduates quit within the first months of placement, and there was disillusionment all around.
We went back to the drawing board, analysed the attrition cases, made several course corrections and launched afresh: this time with an end-to-end view. One key element was a focus on ‘sourcing’—this meant understanding the youth who enter our programmes, setting their expectations and continually testing their commitment to employment.
We instituted a pre-training hospital immersion module called ‘Week Zero’ which entailed clinical exposure in two shifts before students were enrolled. This presented a clear idea of what to expect at the workplace, right from the start.
Other factors emerged from the analysis—for example, people living more than 10 km away from their job location were more likely to leave—hence placement was made more targeted. In addition, we instituted a mentorship programme with daily monitoring and weekly feedback during training, as well as ongoing support during the early weeks after placement.
Measuring the benefits
The change in approach improved our outcomes immensely: over 90% of our graduates have found jobs as opposed to industry placement averages of 60-70%; our monthly attrition rates are 5% whereas industry attrition is as high as 30%; At their workplace, Generation graduates are able to free up 20-30 minutes of nurses’ time in every eight-hour shift.
As a result, hospitals are willing to rehire from us. In fact, seven of our 12 employer partners have begun sharing a part of training cost, on the basis of benefits they see from this hiring. Our next step is to assess the impact on customer satisfaction.
The Generation programme is establishing a new set of metrics to establish and quantify the productivity gains that come from skill training. We estimate that hospitals that employ our graduates (or equivalent) could increase their margins by about half a percentage point.
This gain is enough to cover the training and counselling costs, pay higher wages to young people and yet leave the employers with some surplus.
We are still refining what works, and what doesn’t; across all five countries where Generation will graduate more than 10,000 people by the end of this year. In India, we aim to reach half a million young people by 2020.
This will only be a drop in the ocean and we aspire to create a set of practices that can be applied widely to other skilling programmes. Our experience offers lessons to those who want to take their own actions.
Gupta and Sarangan work at McKinsey & Company. Both are directors of Generation India, a programme of McKinsey Social Initiative
To learn more about McKinsey Social Initiative (MSI), please visit the website. You can also learn more by visiting the Generation website and following Generation on Twitter, Instagram, Facebook and YouTube.