Career Training: Winning Beyond the Current Slowdown Indias large pool of educated entry-level job-seekers and the

low levels of employability have been principal factors in driving the growth of the Indian career training market. However, in the changed market conditions, career training players would need to resort to multi-pronged innovative strategies to address the challenges and gear up for future growth opportunities, say K. Raman, Practice Head Telecom, Media & Technology, Kaustav Ganguli and Keshav Sreedharan of the TATA Strategic Management Group. The number of educated entry-level job seekers in India (Education: Grade 12+; Age: 18-29 years) is estimated to be 54 lakh in FY09. As per a Teamlease study, 43% of these candidates are readily employable i.e. they have the skill levels appropriate for entry-level recruitment. The rest require skill repair for enhancing employability. The Indian Career Training Market is approximately INR 6000 Crores in FY09. After a slowdown in the next 12 to 18 months, the market size could grow to INR 11,600 Crores by FY14. Indian Career Training Market
Educated entry-level job seekers (Lakhs)
54

Entry-level Career Training Market (FY09E)

Others 5% Retail 14% IT 17%

5 6 Unemployed

Post graduate

24

57% Candidates needing skill repair = ~ 31 lakh candidates in FY09

ITeS 11%

Graduate
Manufacturing 35%

BFSI 2%

Grade 12

19

Hospitality 16%

FY09F

100 % = INR 6000 Crores

(Source: Department of Education, Planning Commission, NSSO, Tata Strategic Analysis)

IT and ITeS1 together constitute one of the largest and more mature segments with focussed offerings from large players. Most of the established players in this industry have offerings for the IT & ITeS segment and only recently some of them have begun making forays into other segments like Hospitality, Retail and BFSI. However competition in these segments remains highly fragmented and localized.

Information technology and Information technology enabled services

Competitive Landscape
IT & ITeS Aptech CMS Computers Frankfinn IIJT ILFS - ETS Jetking Koenig MaFoi Training NIIT SQL Star Bharti
Offerings Recent forays Source : Company websites

BFSI

Mfg

Hospitality

Retail

FMCG

Real estate

Telecom

Analysis shows that in times of slowdown, with fewer vacancies available for candidates with low employability, there is a reduction in the propensity of these candidates to spend on courses offered by career training players. With the Indian Economy slowing down and the outlook for jobs in various sectors turning uncertain, career training players in India are also expected to see similar challenges over the next few quarters until growth resumes. Career training players would need to resort to innovative strategies to cope with intense competition in the near term and position themselves for rapid growth thereafter. Some of the options are as follows: 1. Differentiation on content & certification: In an increasingly competitive market, differentiation between offerings by various players is going to be largely dependent on two factors: a. Quality of Content: Strong content partnerships and courseware development processes are expected to be differentiators in a competitive market. Access to subject matter experts and content partners across sectors would drive the ability to attract students on the basis of differentiated content. Internationally, examples abound on how strong content partnerships and content development processes help in differentiation. Xpertise, a leading UK based training company with programs in the areas of professional skills, soft skills & technical training, has content partnerships with Oracle University, Red Hat and the British Institute of Learning amongst others. Similarly, Learning Tree, a leading exponent of IT & Management Training in the US, owns an exhaustive library of proprietary courses for its target segments. Even in India, established players in the career training segment have content partnerships and / or networks of subject matter experts to develop and refine course content. b. Industry-accepted certification: Ability to create certification programs that can accurately predict on-job-performance of candidates would ensure recognition by recruiting companies and boost after-

training placements. Strong placement results, in turn, would guarantee high student walk-ins. Study of Xpertises case, for example, reveals that they have had partnerships with Microsoft and CompTIA to offer industry-accepted certifications. In India, offering industry-accepted certifications along with courses has been a nascent phenomenon. However, cases like that of Hero Mindmine who have entered into a partnership with the US-based BPO Certification Institute to offer certification for its BPO courses, could become more prevalent in times to come. 2. Technology-based delivery models: Traditionally, Indian career training players have been operating on the brick-and-mortar based training model where usage of technology has been primarily limited to supplementary teaching inside the classroom. However, a blended learning approach using technology can deliver select training modules to the target trainees outside the confines of the classroom. This can help achieve the following: a. Enhance student throughput and hence improve topline b. Optimize resource efficiency and reduce cost of delivery c. Maximize reach E-learning and video lectures, for example, are suited for all types of learning activities except the ones requiring interaction or hands-on practice. Analysis shows that in a typical career training course intended for entry-level jobseekers, approximately 30% 45% of delivery can be managed via E-learning and video-based learning while the rest has to be essentially managed by an instructor in a classroom environment. Usage of E-learning for delivering at least 30% of course modules directly to trainees outside the classroom can enhance throughput by at least 50%. Similarly, usage of virtual classroom technology for delivering video lectures to multiple classroom locations from a central location would reduce dependence on instructors at the individual classroom locations and reduce teaching resource costs by 30%-35%. Last, but not least, E-learning can enhance reach at lower costs, especially for short stand-alone courses that only share factual concepts but do not require interaction. Usage of E-learning for training delivery is expected to receive impetus both from both regulatory shifts (e.g. regulations on 3G spectrum auction & roll-out) as well as technology discontinuities (e.g. WiMAX for delivery and access). Internationally, most established career training players like Xpertise and Learning Tree offer blended training courses that leverage technology for more effective learning. In India, NIIT has taken significant strides towards offering blended training courses that enhance productivity, efficiency and learning effectiveness while lowering delivery costs. NIITs acquisition of the US-based IT Education company Element K in 2006 enabled NIIT to derive benefits from Element Ks capabilities in offering technology based training and simulation courses.

3. Focused offerings in targeted sector(s): Career training players should develop focused offerings especially for new sector(s) where competitive intensity is still low. A typical example could be Hospitality or Insurance where the employment outlook, even in the short term, is expected to stay positive and there is little competition. Its equally important that offerings for each of these sectors are developed for specific need areas that are currently not being met effectively. For example, in the Insurance sector, based on skill gaps observed in candidates, opportunities for course development can be explored both for front line sales and back-office roles. Insurance Sector Overview
Entry level jobs Target Profile Skill gaps observed in entry-level recruits Generic Skills: Communication skills, team management, presentation skills, organization & planning skills, personal grooming, relationship management with agents & partners Front line Sales Graduates in commerce, science, arts Back Office Operations Domain skills: Basic knowledge of Insurance (concept of risk, products, claims, overview of life, motor, travel, health, property & other forms), Knowledge of insurance policy documents, buying habits, competitive strengths & weaknesses, and specific compliance & regulatory issues in insurance sector Generic skills: Team skills, Written communication skills Domain skills: Basics of Insurance (concept of risk, types of risk and insurance products), Knowledge of company specific products & processes, Basic knowledge of accounting, finance & insurance legislation acts

(Source: Primary interactions with recruiters and industry experts)

Thus, success in the competitive career training market would rely on 1. Differentiated offerings for the target sectors 2. Innovative technology-based training delivery to ensure cost, throughput and reach optimization 3. Strong content partnerships, industry-recognized brand and certifications 4. Quality faculty, industry relationships and effective quality control across a large network Career training players need to internally develop these capabilities or create the necessary alliances to put together these diverse skills. Development of these capabilities would enhance the efficiency and effectiveness of these companies for them to be able to withstand the looming slowdown. At the same time, it would enable these companies to occupy an advantageous vantage point that can be leveraged for gaining leadership during the growth phase that will inevitably follow.