Manufacturing, services sectors to drive apprentice hiring in H2 2019

MUMBAI: The apprentice hiring sentiment is expected to grow by 41 per cent from second half of 2019, as manufacturing and services sectors have opened their doors for apprentices, according to a report.

According to TeamLease Skills University report, ‘The Apprenticeship Outlook and Index’, the apprentice hiring sentiment is expected to grow from current levels of 36 per cent to 41 per cent in July December 2019.

The report revealed that the top manufacturing sectors to hire apprentices in the second half of this year are FMCG & durables (45 per cent) and automobile and ancillaries (42 per cent).

It is followed by services sector with retail (45 per cent) and travel and hospitality (44 per cent), it added.

The growth is primarily attributed to employers increasingly invested in the apprenticeship model over the last two years especially for cost effective talent creation and enhanced productivity, it said.

The other factors that are driving apprenticeship adoption are the demand for advanced skill sets, financial support from the government, bringing in the services sector under apprenticeship programme, it added.

The report is an outcome of survey done among 502 employers across 12 sectors and four regions (South, North, East and West).

“Employers are fast realising the potential of adopting apprenticeship. The lack of skill based education and basic employability skills even among graduates are the biggest drivers of this growth. The absence of formal training is also a reason,” TeamLease Skill University vice president – National Employability through Apprenticeship (NETAP), Sumit Kumar said.

He said, out of the required 130 million skilled workers, less than 5 per cent undergo formal training and around 80 per cent do not have the opportunity for skill training.

“Further, the recent amendments to the Apprentice Act 1961 have also added to the positivity,” he added.

The report also revealed that functional areas like production and engineering (23 per cent), sales and marketing (18 per cent) and IT (17 per cent) are likely to see more hiring.

Technical knowledge (24 per cent) and communication skills (23 per cent) are the major skills that is required for the hirings.

Most employers prefer male candidates for reasons ranging from physical strength (37 per cent), better performance (28 per cent) and safety and security (25 per cent), it said.

Majority of employers (72 per cent) pay stipends below Rs 12,000 per month with no plans to increase over the next 6 months.

Around 78 per cent of the respondents said they do not plan to increase stipends for new engagements over the next 6 months, it said.

About 89 per cent of the respondents said they are likely to hire apprentices for a period of 6 months to 1 year, it added.