India Inc is in the midst of a massive skilled talent crisis. According to a recent report by TeamLease Degree Apprenticeship, the country is struggling with significant skill gaps and a minimal percentage of the workforce is recognised as formally skilled. Around 49% of the total youth (age group of 22-25 years) in the country are employable, which means one out of two Indian youth are not employable. About 75% of companies surveyed quoted a skill gap in the industry.
The skill gap is also apparent in the National Employability Report for engineering, which says that about 80% of Indian engineers do not possess the skills required to meet the demands of employers. A recent study by NASSCOM forecasts that the demand-supply gap will increase 3.5 times by 2026. It also mentions that only 35% of the STEM graduates of 2020-21 are employable, and the remaining 65% would require upskilling to get a job.
More than two million jobs in AI, cyber security and blockchain are expected to be unfilled by 2023. In addition, digitalisation and the adoption of automation and AI across industries have resulted in accentuating the problem as the available professionals cannot progress into these in-demand roles because they do not possess the technical know-how for these new and emerging job profiles. The TeamLease report says that companies are becoming desperate for a skilled workforce, as their competitiveness and growth prospects are at risk.
The only answer to this challenge is skilling and upskilling. The World Economic Forum has also indicated that investment in upskilling could potentially boost India's economy by $570 bn by adding 2.3 million jobs by 2030. Indian talent is more than open to skilling and upskilling. A survey conducted by TeamLease EdTech indicates that expectations of a salary hike, the lure of a new job role and the fear of job loss are among the biggest drivers for upskilling. The survey indicates that 53% of respondents looked upon the upskilling initiative as a means to achieving a higher salary hike while 73% of them believed that upskilling would improve their chances of promotion or shift to a better role.
In fact, upskilling, says the report, has resulted in salary increases. Around 31.5% of the respondents received a pay hike of about 25% and 46% of them received a pay hike of about 10% post-upskilling.
The growing demand for automation and technical skills like big data analytics and artificial intelligence has created the need for 52% of India Inc employees to reskill themselves in the next two years. The report says that in order to stay relevant and to match the projected demand created by technology, on average, an employee has to develop more than five new digital skills by next year. A 2022 survey by Deloitte found that labour and skill shortages are the second most cited external factor disrupting business strategy. In addition, a Salesforce survey also found that 76% of global workers are not fit to operate in new digitally focused workplaces.
India may have the world’s largest manpower resource, but more than half of that resource is not employable. It’s time India Inc invests in skilling and reskilling its talent.