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A greater and constructive participation through industry-academia collaboration to ensure industry-ready workforce is the need of hour

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Education & Training Hiring trends in manufacturing industry

Sep 27, 2017

The automobile sector is a major employment generator, GDP contributor and FDI earner and, thus, is critical in shaping the country’s economy. The ability of the automobile sector to grow and remain competitive in the next decade would largely depend on its capability to attract, skill, and retain talent. The article discusses the challenges and solutions that will prepare us for the next wave of manufacturing growth.

A recent analysis by McKinsey showed that India’s manufacturing industry is on an upward trajectory. It is estimated to touch US$ 1 trillion by 2025, which is about 25-30% of the country’s GDP and will create about 90 million domestic jobs. The expected trend will provide the requisite boost to the sector, thus, making it one of the top employment generators in the coming years.

In any economy, manufacturing is one of the critical drivers for its growth. Recent initiatives, like ‘Make in India’ by the Government of India, have set ambitious targets for increasing the country’s manufacturing output by leaps and bounds. These movements have resulted in a positive sentiment around the sector and renewed a sense of purpose and direction to all stakeholders. In fact, Arun Jaitley, the Finance Minister of India, recently announced that India now holds the sixth rank globally in manufacturing, thus, affirming and reassuring the government’s commitment towards the set goal.

Addressing skill gap

While India celebrates its upward trend in the manufacturing domain, questions around skilled labour and human resources continue to plague most minds. As per the India Skills Report 2017 by CII, India has a population of 1.2 billion people, out of which more than half are already an eligible workforce. While there is no shortage of labour in India with the country enjoying a healthy demographic dividend, manufacturers are grappling with a gap in supply and demand of manpower due to lack of requisite technical and soft skills. The ground reality is that 30 lakh graduates join the Indian job market every year, but only about 5 lakhs of those are considered ‘employable’. With the rise in digitalisation, the company’s workforce has to embrace technology with more vigour and while this presents incredible opportunities, it makes the skill-gap even more glaring.

Immediate challenges

Keeping these aspects in mind, if India aims to be the next global manufacturing hub, there are various challenges that need to be addressed with an immediate sense of urgency. These include:

  • Finding the right talent for the right role: While we might have a large employable pool, manufacturing companies continue to grapple with talent. Talent available may be ready in terms of knowledge, but when it comes to an industry-ready workforce, many continue to be on the back foot.

  • Limited focus on vocational training and fated education system: There exists a wide gap between the engineering curricula and the actual requirements of the industry. In turn, companies end up investing large sums of money, time and effort on training and unlearning/re-training new talent.

  • Manufacturing isn’t seen as a primary career choice: While the winds of change can be felt in pockets, India continues to be the land of traditional degrees, making manufacturing an unlikely career choice. People tend to migrate to conventional sectors such as banking, real estate, IT & software services.

The action-plan

As mature economies grapple with a different set of challenges such as rapidly aging populations and baby-booming retirements, emerging economies like India are all set for the next phase of manufacturing growth. A seamless partnership between the industry and government of India will lay down the foundation for the next wave of manufacturing growth. Considering the following will enhance this growth:

  1. Reforms at the grass-root level: It is important to take immediate steps to address the skilled labour challenge by driving reforms at the grass-root level in the education sector. There is a need to introduce traditional and vocational education together at an early schooling age, under the existing National Skills Policy, along with other initiatives such as ‘Digital India’ and ‘Make in India’. Companies need to join forces with various educational institutes to impart technical education by bringing industry practices into the learning system and improving the skills of both instructors and students.

  2. Industry-academia partnership: Government policies and actions cannot alone drive growth of manufacturing industry. Thus, we propose a greater and constructive participation through industry-academia collaboration to ensure industry-ready workforce.

  3. Renewed employee-value proposition: The manufacturing industry shares a common talent pool with some of the better paying or career advancing industries such as IT services, technology, banking, etc. Thus, this makes it even more crucial for the manufacturing companies to create a work environment that is challenging, engaging and offers better career building incentives. Companies need to adopt new-age hiring techniques and retention measures to cater to the new age millennial workforce.

  4. Focus on creating a digital eco-system: Some experts and industry pundits forecast concerns on the future of HR, with the rise in digital technologies such as artificial intelligence, automation and robotics. With digitisation, the HR can focus on huge value-additions at the strategic level, which will cause the business models to undergo rapid changes and hence, the need for new skills and ensuring change management will be key.

The article is authored by R Ananda Krishnan, Senior Vice President, Human Resources & Information Technology, TVS Motor Company

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