For Entrepreneurs, Apprenticeship is the Ideal Solution for Addressing the Labor Market Chaos Deploying apprentices creates a strong pipeline of productive workforce essential for the growth of the enterprise--moving it from being a start-up to a unicorn

By Sumit Kumar

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Entrepreneurship is a career path which is being pursued not only by fresh school graduates but also by seasoned professionals who wants to realize an idea or a dream. However, in the entrepreneurial journey, apart from ensuring profitability, operational efficiency, lack of skilled talent who can assist you is a big challenge. Be it at the leadership level or entry level, the major concern is to hire apt talent. While established enterprises also face labour market problems, talent acquisition and retention is much more challenging for new entrepreneurs or start-ups.

Lack of brand power, jumbled structure and role, and risk of failure are the factors affecting the talent acquisition process. In many cases entrepreneurs often end up spending heavily to get talent. Another concern is the high attrition that they have to face, as many a time employees often leave the new ventures for more established corporates. Another major stumbling block that entrepreneurs often come across is low productivity. Apprenticeship can be a game changer for entrepreneur's to address the aforementioned issues. It is one of the most accepted ways of nurturing skill talent pool. In fact, according to a study done by one of the leading manpower player apprentices are 90% more productive than freshers. A start up should capitalize on its USP which is a solid learning platform to create talent instead of buying talent. It would be ideal for them to hire apprentices to create their work force and use the proposition of learning and growth to enable more apprentices to join the segment. Some of the value propositions that apprenticeship can offer an entrepreneur are:

  • Will help in creating a steady flow of skilled talent- Investing in creating a skilled workforce is always beneficial not only to the company but also to the industry at large. By investing in apprenticeships, entrepreneur's not only get better skilled talent they can also create a real time pipeline of talent for the sector. One can also boost capabilities and enhance productivity.

  • Helps in creating and not buying: Creating talent is always cost effective than buying talent from the market. There are models which suggest that the cost of hiring can be optimized by creating talent through apprenticeships. The savings in hiring is directly proportional to the number of apprentices promoted to employees. Higher the absorption rate higher the savings. The savings in the hiring cost could be in range between 35-50% through apprenticeships.
  • Builds a loyal workforce: Consistency and persistence of the employees is crucial for the successful entrepreneurial ventures. Global research has indicated that apprenticeship produces loyal employees. People who make it through apprenticeships tend to stay engaged for a very long time as they cherish and value the learning experience. Hence, in this case, as compared to hires made through external market, attrition drops significantly.

Also Read: 4 Ways Small Businesses Can Attract and Retain Young Talent

  • Reduces attrition - Higher productivity: Lower attrition rate not only reduce hiring cost but also boost productivity. As apprentices, employees can continuously learn on the job, thereby being equipped real time with the right skills, all in sync with industry demand and employer requirements. Apprentices significantly complement the growth of a start-up. The return on investment on apprenticeship could be 2.5 to 3 times higher than the investments made. Over a period of time, apprenticeship becomes a self-financing route to create human capital.

Related: 5 Tips for Hiring the Talent You Need In a Tight Labor Market

Unfortunately in the current scenario, entrepreneurs do not have a huge appetite for apprenticeships like the large and established enterprises. To boost adoption of apprenticeships in the segment, it is crucial to (a) create a positive perception around the adoption of apprenticeship, (b) encourage more entrepreneurs to embark on this journey and (c) introduce benefits or subsidiaries to players who employ apprentices. Deploying apprentices can create a strong pipeline of capable productive people who are essential for the growth of the enterprise. An idea creates a venture, but it's the people who lead it to success. Apprenticeship is essential in an entrepreneur's journey from start-up to a unicorn.

Sumit Kumar

Vice President, TeamLease Skills University

Sumit Kumar is the Vice President, NETAP at TeamLease Skills University. He has been associated with Teamlease Services for over five years. He heads operations for the NETAP [National Employability through Apprenticeship] , which is a Public Private Partnership of Teamlease Skills University, CII and NSDC under the National Employability Enhancement Mission (NEEM) of the Ministry of HRD (AICTE). 

NETAP is fastest growing apprenticeship program in India. Mr. Kumar drives this large scale mandate which provides employers with a provides employers a pool of highly skilled productive workforce. NETAP has been instrumental in integrating learning and skilling and enhancing employability for the youth. 

He has actively worked with the HRD Ministry and corporate towards improving the Indian workforce. Prior to TeamLease he was associated with Monster India as their regional manager for over seven years. Mr. Kumar comes with a strong perspective on the adoption of apprenticeship across industries especially, retails, manufacturing, automobiles, allied industries amongst others. 


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