46% of Corporates Are Now Willing to Hire More Apprentices, as Compared to 41% in H2 2019: States TeamLease

Despite COVID 19, Apprenticeship Hiring Witnesses a Positive Traction, Net Apprenticeship Outlook Stands at 33%

NETAP, India’s largest degree apprenticeship program from TeamLease Skills University has launched their latest report “Apprenticeship Outlook Report. An in-depth analysis of the current apprenticeship hiring trends in India, the report highlights that, 46% employers are keener to increase their apprentice pool in the period July to December, 2020. Despite the ongoing COVID 19 pandemic, apprentice hiring is seeing a positive sentiment across many sectors and regions. The net apprenticeship outlook for this half year stands at 33%.

One of the primary drivers for this positive momentum is that more employers, about 32%, have been looking at apprenticeship to offset the workforce scarcity that they have been facing due to reverse migration that has happened because of COVID 19. Additionally about 25% companies have also been hiring apprentices to meet the increased demand for products and services due to the pandemic. Other than this another contributing factor is that employers are increasingly accepting the merit of apprenticeship as a successful model to create a productive resource pool of skilled talent. About 27% of the organizations interviewed, expressed their intent to hire apprentices to optimize the manpower cost at the basic level.

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A detailed drill down elaborating the sentiments across sectors and cities, as per the findings of the net apprenticeship outlook will be promising in cities like Ahmedabad (42%), Hyderabad (40%), Mumbai (39%) and Chennai (38%). The top sectors where apprentices will be in demand are Healthcare & Pharmaceuticals (42%), Manufacturing & Engineering (40%), Retail (38%) and Ecommerce (38%). Additionally the report also analyses the categories under which apprentices will be engaged. From a category perspective, the proportion of employers increasing hiring for Trade, Technician and Graduate apprentices is 31%, 22% and 16% respectively and this is predominately across sectors like Manufacturing, Retail, Healthcare & Pharma, Ecommerce and Automobile.

Commenting on the study, Mr. Sumit Kumar, Vice President – NETAP, TeamLease Skill University, said, “Despite the predicament that the current pandemic has brought, the overall sentiment amongst companies to hire apprentices has been very positive. While in the initial months of the lockdown, we witnessed a dip, the hiring intent has bounced back quite aggressively, especially since June/July. On one hand, more employers are continuing to accept apprenticeship as a solution to create a skilled productive workforce. Nearly 78% employers find their apprentices to be productive. On the other hand the current pandemic has made many realize the potential of investing in apprentices and building a talent pool, especially local talent to mitigate workforce scarcity in such situations. Close to 24% organizations have increased their apprentice hiring during the pandemic.”

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“Additionally, more sectors like e-commerce, healthcare & pharmaceuticals etc. have also warmed up to the model now. They have been extensively hiring apprentices to meet the increased demand that COVID has brought in”, added Mr Kumar.

Further analysing the net apprenticeship outlook, the report indicates a positive outlook for large enterprises at 38% and medium enterprises at 30%. In the large enterprise category, Manufacturing (36%) and Services (29%) have a higher net outlook. Further according to the report, some of the profiles that will be in demand are Machinist (35%) and Mechanic (30%), Helpers (31%) and Sales Executives (32%).

Additionally the report also analyses the gender parity in hiring apprentices. Interestingly 34% of the companies interviewed have expressed a gender neutral approach and openness to include even the LGBTQ community as well; 43% companies prefer male candidates and 23% prefer female candidates. While Hyderabad was more open to women candidates, Bangalore and Mumbai were gender agnostic.

The Apprenticeship Outlook report contains insights on employer sentiment in relation to apprentice hiring for the period July 2020 to December 2020. Analysis is based on the historical data of apprentice hiring and findings from a survey of 600 employers across 18 sectors and 14 cities.

Key Findings

• Overall sentiment: The Net Apprenticeship Outlook Index for the current HY [Jul 2020 – Dec 2020] is 33%
  • Estimated increase in apprentice hiring in the current HY: 46%
  • Estimated decrease in apprentice hiring in the current HY: 13%
  • Estimated no change in apprentice hiring in the current HY: 41%
  • Net Apprenticeship Outlook NAO for the current HY (Jul-Dec 2020) has declined to 33% (a drop of 36% from the previous HY (Jan-Jun 2020))
  • In spite of the decline in NAO for the current HY, the employer’s intent to hire has increased by 5% YoY from 41% in Jul-Dec 2019 to 46% in Jul-Dec 2020
• At 33%, the Apprenticeship Outlook for the half year fares substantially better than the overall Intent to Hire (a measure of overall job creation in the country), which stands at 18%
• Top 3 reasons for employers to increase hiring of apprentices:
  • To offset the workforce scarcity owing to the pandemic: 32%
  • To reduce the manpower cost of work at basic levels: 27%
  • To handle increased demand for services and products due to the pandemic: 25%
• Top 3 reasons for employers to decrease in hiring of apprentices:
  • As part of regular workforce restructuring: 31%
  • Non availability of training staff : 24%
  • As a step towards workforce downsizing specifically due to COVID pandemic: 15%
• Top 3 reasons for employers not implementing apprenticeship programs:
  • Do not foresee the exercise to add much value: 26%
  • No hiring plans: 25%
  • Unfavourable financial condition: 20%
• Sector, city and business category wise NAO highlights.
  • Healthcare (42%), Manufacturing (40%), Retail (38%) and Ecommerce (38%): foresee better NAO when compared to other sectors
  • Travel & hospitality (-10%) and Beauty & Wellness (-5%): record negative outlook for the current HY
  • Agriculture & Agrochemicals: The only sector with increase in NAO from 20% in the previous HY to 34% in the current HY
  • Highest NAO: Ahmedabad (42%); Lowest NAO: Nagpur (11%)
  • NAO for Large businesses (38%) is relatively better than that for medium businesses (30%). The financial fragility of small businesses have made them the most vulnerable to the pandemic, resulting in a negative hiring outlook (-15%)
• Top categories of apprentices employers are likely to hire:
  • Trade – Outlook: 46% / Average number of hires: 202
  • Technician – Outlook: 19% / Average number of hires: 133
  • Graduate – Outlook: 17% / Average number of hires: 96
• Top trade roles employers are likely to hire:
  • Mechanic – Outlook: 22% / Average number of hires: 35
  • Helper – Outlook: 21% / Average number of hires: 30
  • Electrician – Outlook: 13% / Average number of hires: 28
  • Fitter/Welder – 13% / Average number of hires: 21
• Top Technician apprentice roles employers are likely to hire:
  • Automobile Technician – 31% / Average number of hires: 36
  • Electrical Technician – 28% / Average number of hires: 31
• Top Graduate apprentice roles employers are likely to hire:
  • Automobile Engineer – 38% / Average number of hires: 25
  • IT/Computer Engineer – 23% / Average number of hires: 21
• Top functional domain(s) where the apprentices are likely to be hired the most in the next 6 months:
  • Production & Engineering – Outlook: 37%
  • Sales – Outlook: 30%
  • Marketing– Outlook: 16%
• Employer perception of productivity levels of apprentices engaged in the last 6 months:
  • Very productive: 34%
  • Fairly productive:44%
  • Unproductive:22%
• Stipend ranges paid to apprentices engaged (per month): [Percentage of total at the respective category level]:
  • Trade Apprentices: 43% of respondents likely to pay between INR Rs.10,000 – Rs.15,000
  • Graduate Apprentices: 42% of respondents likely to pay between INR Rs.15,000 – Rs.20,000
  • Technician Apprentices: 31% of respondents likely to pay between INR Rs.12,000 – Rs.15000
  • Technician (Voc): 37% of respondents likely to pay between INR Rs.10,000 – Rs.15,000
  • Optional Trade: 41% of respondents likely to pay between INR Rs.10,000 – Rs.15,000

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