As the conversation ns around apprenticeships start getting more intense, we at India Apprenticeship Forum would like to revisit the Apprenticeship Stipend Primer 2019, brought out by NETAP [National Employability Through Apprenticeship Program] and TeamLease Skills University Thought Leadership.
In this post, we present highlights of Part II of the Apprenticeship Stipend Primer 2019.
You may read Part I of the report here
Several industry-friendly amendments in 2014 to the Apprentice Act (1961) saw an impressive 15% growth in apprentice engagement during 2015-16, up from 5% the year before. And the National Apprenticeship Promotion Scheme web portal saw a whopping 500% leap in candidate registration since its launch in 2016.
Want a copy of the Apprenticeship Stipend Primer 2019?
If yes, please click here and give us your details. We will be happy to mail you a copy.
Sector-specific engagement of apprentices is heavily skewed, with manufacturing grabbing a lion’s share of 89% of apprentices compared to the services sector. However, as we have seen, there is immense potential for apprenticeship take-up in the Indian services sector. Ergo, ongoing and future decision-making in boosting apprenticeships should take due cognizance of this tremendous opportunity.
Apprenticeships have opportunities in every major sector. See our earlier opinion posts on
- Retail & E-commerce: Opportunities in the challenges
- Logistics: Vocational Training and Apprenticeship opportunities
- Restaurant & Food: Building an Appetite for Skill-Based Employment
- Beauty & Wellness: Apprenticeships getting fit for the Beauty & Wellness sector
Another gap that the report reveals is in the growth of apprentice enrollments vis-à-vis growth in stipends. Stipends grew nearly twice more at 8% compared to apprentice engagements at 4.3% between 2016-17.
In other words, there is still a lot of catching up to do. The government earmarked Rs10,000 crores in 2016 – the largest monetary initiative for skill development since 2009 – to spur Indian industry to embrace apprenticeships. Around 3 lakh apprentices in India (0.01% of the workforce) is a drop in the ocean and far from the government’s target of skilling 5 million youth in apprenticeships by 2020. Calling on industry to take a more visible lead in embracing apprenticeships, the Joint Secretary from the Ministry of Skill Development and Entrepreneurship, Rajesh Aggarwal, in his keynote at a recent NETAP-IAF event voiced, “The intent is that industry must come forward and evangelise apprenticeships so the youth of today get the right path. Government is open to next phase of reforms if required but at the same time industry now needs to start looking at apprenticeships in strong measure.”
Want a copy of the Apprenticeship Stipend Primer 2019?
If yes, please click here and give us your details. We will be happy to mail you a copy.
Business Size Matters
The report found significantly higher stipend payouts (12%-30%) by large businesses compared to medium-sized firms, with the difference dropping to 10%-15% between medium and small businesses. Further, stipend differences are insignificant across the representative job profiles between small and medium firms.
As we have seen, small and medium enterprises (SMEs) face specific challenges on-boarding apprenticeships due to their size and resource constraints. Going forward, focused interventions targeted at SMEs should become an integral part of apprenticeship policy and decision-making.
Apprentice Mobility
Apprentices are better off in satellite cities/towns compared to main hub cities as normalized stipends with cost of living for the former are higher by 10%-47% than for the latter. This holds true across the cities of Bangalore, Delhi, Hyderabad, Chennai and Mumbai. Kolkata and Delhi register the highest apprentice mobility with 80% or more candidates ready to move to any other city- be it a hub or smaller town.
Mysore and Vijayawada with 35% – 48% and 22% – 27% higher normalized stipends respectively, take the top two best cities spot for apprentices to work. Conversely, Noida and Gurgaon with 38% – 55% and 27% – 33% lower normalized stipends respectively are the worst, measured against the ratio of normalized stipends and the cost of living index.
Apprenticeship Engagement
The different apprenticeship categories namely; Graduate, Technician, Technician(vocational) and Trade apprentices show varying levels of engagement vis-à-vis allocated seats. 81% of apprentices were absorbed by the private sector, with the rest in the public sector. Graduate and Technician Apprentices were the most absorbed by industry in 2015-16 with a growth of 29% and 22% respectively. Although Trade Apprentices saw a mere 4% growth in engagement in 2015-16 from the year before, this category of apprentices represented 61% of all engagement (of which 82% were ITI pass-outs), followed by Graduate Apprentices at 21%, Technician Apprentices at 16%, and Technician (Vocational) Apprentices tailing at 2%. Technician(vocational) Apprentices was also the only category registering a negative growth in apprentice engagement, down by 35% in 2015-16 from the previous year.
Overall, 7% more apprentices entered the workforce during 2015-16 with Graduate, Technician, Technician (Vocational) Apprentice engagement showing a 9.6% CAGR and estimated to reach 1.78 lakhs by 2018-19. Trade Apprentice engagement is registering a 4.4% CAGR expected to hit 2.5 lac by 2018-19.
Tamil Nadu topped the list with the most number of applications in Graduate, Technician & Technician (Vocational) categories, and a 15%–20% growth is expected in the next 2 years.
The reasons for differences in performance in apprentice categories or state-wise engagement are beyond the scope of this report. Nevertheless, they are extremely useful indicators providing market intelligence into where efforts need to be channelised. Another useful metric to obtain would be retention figures, i.e. how long apprentices stay on after being placed under the different categories.
Also Read: Employer-Youth Mismatch at the Recruitment Stage – How Apprenticeships Can Help
We look forward to more such insightful data-backed apprenticeship facts to aid policy and decision-makers.
