J.P. Morgan/NASSCOM Foundation/Sattva Report- “Understanding the Return on Skills Training Models in India”

New Delhi: A new research report released today by Sattva Consulting and NASSCOM Foundation, supported by J.P. Morgan, provides key insights into the efficiency and impact of different skill-development models, following large-scale investments into them to reduce skills gap.


The report was launched during a virtual conference themed Understanding the Return on Skills Training Models in India. Based on data gathered from 40 skill-development and funding organizations, the report identifies factors that can help generate better returns on investments and highlights practices that can positively influence salary and placement in the post-pandemic world.

With India’s growing young population entering the workforce, the government is investing heavily in work training programs. Private organizations have also played a crucial role in reducing skills gap, with 328 companies contributing INR 1653 crore towards 775 projects through their corporate social responsibility efforts.


Releasing the report, Srikrishna S Murthy, Co-Founder and CEO, Sattva Consulting said, “Strong push for skill development over the last 15 years has resulted in a fast-evolving skilling ecosystem in India. The role of data is becoming increasingly critical to help us understand what works, and achieve better return for candidates. Through this study we are presenting actionable recommendations to build efficient skills training models looking at Return on Investment (ROI) of programs across the country.”

“The skills training ecosystem today is pivoting through agile measures to recover, re-build and reimagine from a COVID disrupted market. We are committed to work with a wide range of partners and donors in helping them bridge the employability gap” he added.


Key determinants of higher salary

According to the report, every rupee invested in skills training programs returned INR 2 to INR 19 (measured based on candidate’s salary), with the median being 6.67. It identified integrated training programs in campuses, offline training programs, integration of digital skills and effective selection mechanisms as key determinants of higher salaries.


“While the country has made large-scale investments in jobs and skills, there is a lack of in-depth research, evaluation, and skill-gap analyses to guide investments. The report launched today will help funding and skills-development organizations arrive at data driven investment decisions and enable us to truly leverage our demographic dividend,” said Madhav Kalyan, CEO, J.P. Morgan, India.

Graduates who received integrated training programs while in college fetched 53% higher salaries than those who were trained after graduation, the study revealed and stated that inclusion of digital literacy in sector-specific programs, such as healthcare and BFSI, fetched 39% higher salaries.


Ashok Pamidi, CEO, NASSCOM Foundation,said, “Skill training is absolutely the number one priority for the industry. India enjoys a demographic advantage of being one of the youngest countries. To make our country the skills capital of the world, the way we conduct skills training – the skill training models are as important as the curriculum itself and this much-needed study in partnership with Sattva and supported by J.P.Morgan provides critical know-how on how these models are evolving, what works and what needs to be changed. We hope that this study helps numerous skills training organizations out there to restructure, refine and further sharpen their skills training approach to get the maximum ROI for their students.”


Lockdowns result in change in training practices


The study highlighted the impact of lockdown on training models and emergent trends. It noted that within 6 months of lockdown, 88% of skill-training organizations had found ways to stay updated with the change in employer needs, candidate aspirations, funding and policy ecosystem.


While 74% pivoted to a blended/online approach with training partners increasing candidate counselling and monitoring, 75% saw an increase in demand for cross-sectoral placements given continued churn in market demand.


Other key observations are:

Almost 90% skill-training organizations faced challenges in terms of quality of internet access at candidates’ end, quality of infrastructure in rural areas, and motivating students to shift to a pure online model. The organizations addressed these challenges by investing in 3G/4G SIM cards for candidates, leveraging alumni networks to keep students motivated, setting up learning management systems to provide training after placement, and developing mechanisms to track out-of-job workforce and explore placement opportunities for them
In 65% of organizations surveyed, candidates showed preference for local jobs that were closer to their homes, indicating shift in candidate priorities.

The report is available free of cost and can be downloaded from https://bit.ly/Return-on-Skills



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