Attracting the best human capital needs moving PSUs into an independent holding company.

Sardar Vallabhbhai Patel said, “It is a folly to ignore realities; facts take their revenge if they are not faced squarely and well”. We should take the Sardar’s advice in three questions about our public sector units (PSUs). First, will most PSUs suffer the same long-run fate of Air India, BSNL, Ashok Hotels, and UCO Bank? Second, which is a bigger job: Secretary Steel or Chairman SAIL, Secretary Civil Aviation or Chairman Air India, Secretary Heavy Enterprises or Chairman BHEL? Finally, aren’t PSUs companies, and aren’t the skills for policymakers, regulators, and running a company different? I believe many PSUs can compete with the private sector, but not with their hands and legs tied, and that improved governance, better human capital, and higher accountability is only possible by moving PSUs out of various ministries into an independent holding company (Holdco).

PSU challenges are not uniquely Indian. An interesting recent book was The Public Wealth of Nations by Dag Detter and Stefan F?lster that says “The left demonises the use of market mechanisms to improve the state, and the right demonises the use of the state to address market failures. The debate between privatisers and nationalisers misses the point that asset management is more important than ownership.” The authors estimate that “the professional management of commercial assets held in public ownership could generate an annual yield of $2.7 trillion worldwide — more than current global spending on transport, power, water and communication” and lament that “at a time when tech entrepreneurs are reinventing the world, public policy makers are reinventing the wheel”.

For India, creating Holdco is a more doable choice than divestment because our seven policy backseat drivers (CAG, CVC, CBI, CIC, courts, press, and NGOs) wrongly substitute the accounting of accountability (did you follow rules and procedure) with the account of accountability (did you do the right thing). This makes divestment of even loss making PSUs almost impossible because of (a) the many ways to value a company; assets, competition, past spreadsheet, future spreadsheet, addressable market, management, brand, etc (b) value is what somebody is willing to pay at that moment in time, and (c) value may change in retrospect; every doctor knows that post-mortems have a certainty that prescriptions don’t.

The case for Holdco is strong. The first is performance; PSUs make poor returns on the invested capital of Rs 17,44,321 crore, many have monopolies and mispriced financial and physical resources, but only 163 of 290 PSUs are profitable, and the market capitalisation of all listed PSU banks is less than single private sector bank HDFC. The second question around CEO reporting matters because top talent isn’t attracted to being lorded over by somebody who is often close to retirement, often reached where they are because of standing in a line, and have not developed specialisation because of short tenures that encourage more poetry than prose. The CEOs of many PSUs have bigger, more complex, and more important jobs than many of the secretaries of the ministries they report into. Finally, it is obvious that policymaking, regulating a market, and running a company not only need different skills but have contradictory objectives; Socrates said a slave who has three masters is free.

Holdco’s mandate will be governance, human capital, and strategy. Governance will involve separating the roles of chairman and CEO, selecting the board, and performance management. Human capital will involve attracting the best talent because — as General Patton said — wars are fought with weapons but won by people. Finally, strategy in most PSUs has become goal-setting, but it’s actually the art of creating an unfair advantage. Holdco will evolve a strategy for every company that would manifest itself in financial or human capital infusion, consolidation, or sale. Contenders for first chairman of Holdco include Ratan Tata, Nandan Nilekani, Indira Nooyi of Pepsi, Rakesh Kapoor of Reckitt Benckiser, and many others.

In many sectors, recruiters are looking for “work-ready” graduates with clear evidence of job specific skills in addition to high-level graduate attributes

Students make a large personal and financial commitment to their education and expect a high return on both. A recent study has shown that over half of the graduate jobs are taken by people, who have already have had some experience in the company that hires them. A degree is no longer enough to graduate a satisfying future career. This is all the more true in light of the current economic climate. Given that higher education is already a big cost, the need to work for free even after leaving university only makes things even more expensive for students. In many sectors, recruiters are looking for “work-ready” graduates with clear evidence of job specific skills in addition to high-level graduate attributes. One of the main reasons students choose to study at university is to enhance their career prospects.

The biggest irony in our country is that despite having more than 10,000 open jobs a day, the unemployment rate is growing steadily. More than a million join the unemployment market each month, creating a social time bomb of sorts! Too many students graduate with the belief that their degree will lead straight to a job—setting the stage for a painful wake-up call when they realise that in most fields, a degree is simply a minimum qualification, not an instant pass to easy employment. Students’ interest is more likely to be maintained, if they can see the relevance of their studies to their future careers and life beyond university. Surprisingly this is not an Indian phenomenon alone. According to Macquarie University DVC Academic John Simons, “employment outcomes are why students choose a university”. However, the proportion of graduates finding full-time work within four months of leaving universities in Australia has deteriorated rapidly since 2012.

Recent studies show that there is a gap between traditional training and the skills actually needed in today’s job markets in the various domains like cognitive flexibility, creativity, knowledge transfer and adaptability. This phenomenon is not unique to states like Bihar or Kerala, wherein the unemployment rate has always been high but now even better performing state such as Gujarat is also experiencing a very high unemployment rate. According to the Gujarat government, between 2011 and 2014 more than 972,184 educated youth have got themselves registered at various employment exchanges across the state hoping for a job. Out of these, over 1.73 lakh are graduates, over 39,393 are postgraduates, 247 are PhD holders and 153 have MBBS degrees. The current state of unemployment is the by-product of an education model that is not outcome driven. The recent response of 23 lakh respondents for 689 peon jobs in UP is a reflection of the desperation as also the unemployability of the graduates.

A change in the higher educational way of teaching is the only solution to put off the social time bomb. Innovative teaching, learning and assessment methods help students engage in the education process and helps them to understand and have the added benefit of also helping them to develop attributes, which make them attractive to potential employers. Being able to solve new problems based on the knowledge acquired has become a desired outcome of technical education institutes. Students, who make an effort to fully participate in the total student experience (academic, co-curricular, extracurricular and work experience) benefit from a well-rounded education, contribute fully to the life of the university and community and hopefully have fun in the process. In order to bridge this educational gap, the long-term goal is to create a progressively more engaging laboratory experience with problem solving emphasis and various skill and knowledge acquisition. A practical in the laboratory is an essential part for verification of classroom theory in all subjects of engineering education. The ratio of theory to practical varies levels of education. In engineering degree, the ratio is generally 60:40. In engineering diploma, it is 40:60. In industrial training institutes (ITI) it is 20:80. This highlights the importance of practical sessions.

Employability needs to play an important role in the implementation of the colleges’ learning and teaching strategies. It has to be part of good learning practices being followed. Students, who engage in developing their employability are likely to be independent, reflective, and responsible learners. Out of the two million candidates, who join Moocs only 4 per cent complete the course making the entire exercise futile. What tends to work in India is the hybrid model, a combination that includes apprenticeships, on the job learning, classroom and digital learning in a bachelor’s programme that is a mix of classroom and digital.

Any university/college needs to be have three components for improving the employability of it’s students-teaching concepts theoretically, teaching concepts practically, part matching of skills to industry demands. Needless to say that the mix of each of the components may vary depending on the programme the college is teaching.

S S Mantha (HOD, department of mechanical engineering, VJTI and ex-Chairman, AICTE) says, “Estimates peg insufficiencies of 500 million unemployed youth by the year 2020. The dial is moving slowly but certainly and the year 2020 is also when the millennium’s first 20 year olds will be looking for their spring to see how they come on board with what is happening on the streets and alleys around them. If a paradigm that is based on restricting education and skills to fit the available space of employment and opportunities or as a political expediency either in the education space or in the employment sector is proposed and is perforce allowed to settle, we could be staring down the barrel of a civil war. Instead of retrograde measures like restricting number of colleges or suggesting that they be closed, we need to improve the school systems to have better and more endowed children pursuing higher education, create newer education opportunities like blended learning, virtual universities and increase massively the employment opportunities. Make in India, Skill India and Digital India are in the right direction though their delivery models need a rethink. This would create wealth for our citizens with a consequent rise in the countries’ economy.”

Sunita, a diploma holder in Electronics from rural Haryana, has been struggling to find a job since last 1 year. Like Sunita, there are lakhs of kids who are graduating every single day but finding it extremely difficult to get a job, mainly due to a lack of capability and skills. About 90% of the job openings today need skills which are missing in almost 90% of our youth, even among postgraduates. Yes, 15 years of education does provide them with a qualification, but does not make them job-ready. Poor infrastructure and lack of quality control are the primary reasons for the low grade output.

As per a recent study, 8 out of 10 engineers are not fit for jobs. Similarly, only 7% of management graduates from tier B and C cities are employable, while those who do get jobs, earn an average salary of Rs 10,000. The ground reality is that current education fails to inculcate employability skills in students.

While degrees are what we yearn for, skills are what an employer looks for. The best and most accepted skill learning programme is apprenticeship. Globally, apprenticeships are a popular platform to build a career by the virtue of learning by doing. In Austria, 40% of the kids enter the job market through apprenticeships. In Germany, 2.7% of the workforce operates under apprenticeships. Ideally, India should have 15 million apprentices but we have never crossed a figure of 3 lakh apprentices ever since The Apprentices Act was passed in 1961.

Apprenticeships are a great way to build a career. Whether you have just passed out of school or have dropped out of college, apprenticeship can pave a strong career path for you. Let’s take a look at some of the many benefits of apprenticeships:

Hands-on experience: Apprenticeship or learning by working under an able person or organisation will help one understand the concepts studied or preferred by the industry better. It helps one apply one’s knowledge and learn while working. Unlike an internship, which is largely short-term mandated by the curriculum and not the employer, in apprenticeship, one will have to hit the ground running. It gives one an opportunity to actively participate and experience the real world of work. It offers one a chance to put the learned skills into practice and evaluate the stream of education and the job it offers are of their liking.

Multiple options: Historically, apprenticeships were associated with the manufacturing sector only. However, times have changed and apprenticeships are being increasingly welcomed by other sectors as well. This allows youngsters to explore different functional sectors, letting them identify their strengths and pursue a career in the industry of their choice.

Flexibility: Apprenticeships are flexible in nature as they are not restricted to just once or twice a year, which is typically the case with our classroom education. Such programmes can be undertaken at any time of the year.

Steady income: In most sectors and job roles, companies offer apprentices monthly income in the form of a stipend. As per the last amendment in The Apprentices Act, stipend has been improved significantly. Today, stipend is benchmarked to semi-skilled wages, which may vary from Rs 7,000-9,000 per month, depending on the state’s minimum wages.

Find your aptitude. Think beyond engineering and medicine

The class 12 results have just been announced in most states of the country. This is the time when most students are wondering what to do. Should you go ahead with graduation in science, commerce, arts or should you try something different? Something new?

Before you decide, keep in mind that what you take has to be based on whether you have the aptitude for that career. It is important to not make a career choice based on what others are doing.

A very common statement one gets to hear from students is that “I have taken this course because my friends also are doing the same”.

If you do not have the aptitude for that programme or career, you will not be able to succeed. You need to be aware of all possible choices you have and make informed decisions about your future. If you intend to pursue science, here are some options you could consider.

Engineering

Engineering involves job roles like maintenance, design, invention etc.

Which one you choose would depend on the career path you would want to take.

The most popular stream opted for by students these days is computer engineering.

A word of caution before you chose this stream. Please be aware of all job possibilities for each of the stream.

You can pick an engineering branch from the given list:

• Computer engineering
• Civil
• Mechanical
• Electrical
• Electronics & Communication
• Biotechnology
• Aerospace
• Agricultural
• Petroleum
• Textile
• Chemical

Medicine

A career option in medicine is one of the most vied after by science students.

The medical field is one of respect and challenge.

Often, the main motive of most of students behind choosing biology after class 10 is to become a doctor; but this field offers a vast number of career opportunities other than Bachelor of Medicine, Bachelor of Surgery (MBBS).

Many industries that are linked to the field of medicine like Pharmaceutical, Healthcare, Research, Hospitals etc offer an array of opportunities.

So apart from a doctor, there are many other job roles that can be looked at such as technicians (one of the most sought after and well paid job roles as this needs the knowledge of both medicine as well as technology), elder care executives, home care executives amongst many others.

The major streams in the medical field are :

• MBBS
• BDS (Dental)
• BAMS (Ayurveda)
• BHMS (Homeopathy)
• Nursing
• Physiotherapy
• Lab Technicians
• Nutritionist

Management

Post Class 12, you can opt for doing Bachelors in Business Administration.

This will take you directly in the league of business and help you take up sales / marketing related jobs immediately on completion.

Bachelors in Science

Students wanting to continue with traditional science fields should go for BSc after Class 12.

Post graduating there are many options in areas of banking, management, biology, zoology, R&D, teaching that you can consider.

Apart from the above very obvious career options, you can also consider these

Biotechnology

A research based science, and as the name suggests, Bio-Technology is a mix of biology and technology. Areas such as microbiology, virology, genetics, chemistry and engineering are covered in this subject.

There is a growing need of Biotechnologists globally.

Various career opportunities for BioTechnology graduates are research, lab technicians, sales and marketing etc.

BioPhysics

A mix of mathematics, chemistry, biology and physics, this science stream primarily relates to the study of living cells and organisms

Veterinary Science

It is the science of treating and curing various types of birds and animals. So if you love animals and are passionate about their cause, this is a good career option to choose.

The contours of an appointment with India’s destiny built on three Es—education, employment and employability—is emerging
Education may be the most important of the 3Es because in the modern world of work, the most important vocational skills are reading, writing and arithmetic and you can’t teach kids in six months what they should have learnt in 12 or 15 years. Photo: Pradeep Gaur/Mint

Philosopher Thomas Paine wrote in Common Sense: “We have it in our power to begin the world over again.” The world of India’s 3Es (education, employment and employability) needed to begin all over again because we have too much informality, too few cities, too little manufacturing, too many farmers, too weak K-12 learning outcomes, too many unemployable graduates, too few apprentices and too much regulatory cholesterol.

Additionally, 3E policymaking needs to make a leap similar to what classical physics made to quantum physics—discrete systems to everything is interconnected—because the job of the government in jobs and skills is not to set things on fire, but create the conditions for spontaneous combustion. In the past two years, this reboot has begun; the report card would be great progress in employment, reasonable progress in employability, and need more boldness in education. Let’s look at all three areas individually.

In employment, we overestimate what policy can do in the short run and underestimate what it can do in the long run. Making India a fertile habitat for jobs needs many interventions; the massive divergence of the past five years between real wages (what employees care about) and nominal wages (what employers care about) in big cities needs the quality urbanization that the Smart Cities programme will create.

Regulatory cholesterol will come down substantially with the replacement of the 27+ numbers for every enterprise with the Unique Enterprise Number from 1 April 2017 and the move to online and paperless labour law compliance (employers currently use 500 crore sheets of paper for this).

As soon as Parliament is ready, 44 labour laws will be consolidated into five labour codes, but action on labour reform has begun with the decentralization of funds, functions and functionaries to state governments. Most importantly, fiscal self-discipline and prudent handling of the oil windfall is creating conditions for macroeconomic stability and lower interest rates that will kick off a job creation cycle by multinationals and domestic entrepreneurs.

Of course, the goods and services tax (GST) has been a miss—my guesstimate is that delays cost us 100,000 formal jobs per month—but hopefully, we will see its unique entrepreneurial upsides later this year.

For decades, the only meritocracies have been the IITs, IIMs and civil service exams, but the churn in nationalized banking, the focus on ease of doing business and the tone of zero tolerance around corruption is changing how business is done in New Delhi by shifting power from connected businessmen with regulatory access to entrepreneurs with nothing other than the sweat of their brow, the strength of their backs and the courage in their hearts.

In employability, the biggest innovation is a new ministry of skills. Skills is a horizontal in a government that is organized vertically; the past decade has seen continuous traffic jams between two central human capital ministries, at the intersection of two central human capital ministries and 19 other central ministries involved in skills, and between the central and state governments. A single neck to catch creates accountability and urgency. The amendment of the Apprentices Act whose reform was the 20th point in Indira Gandhi’s 20-point programme in 1975 is a huge move that enables raising our apprentice numbers from 300,000 to 10 million. State skill missions are being given more room and funds; every state’s opening balance is different and the path dependence needs them to craft their own agendas at the margin.