1) The need for skill training programmes assumes that there is a gap in demand and supply of skilled labour. The question to then ask is - if companies are unable to find people with skills, why don't the companies train people themselves? When Nokia set up its factory in Sri Perumbuduru, it trained its own people. Why isn't happening in other cases? Of course, it needn't be the case with all companies. Some small companies may not be able to train the employees due to the fixed costs involved. But, how big is this gap?
Also, as this outlook article also suggests, some companies seem to be saying that most skills required for the job are learnt on the job
2) Is this gap only purely technical? The following excerpt would suffice from this article
So if some alleged skill gaps are really just reflections of firms operating on tight margins, why are employers talking about skill at all? Sometimes, it turns out, they aren’t. Several employers indicated that to them ‘attitude’ is a key component of skill. By attitude, they mean that workers should have a strong work ethic, be willing to make sacrifices for productivity (working night shifts, for example), and not be likely to add to the labour relations’ problems of firms. Two firms reporting highly cyclical demand actually indicated that a core ‘skill’ problem was how to have trained manpower when they needed it, and to not have to pay for it when they didn’t. In short, many concerns actually relate to labour relations and regulations, or simply the availability of manpower on demand, and fall outside the largely technocratic rubric of ‘skill development’.
Firms suffering economic skill gaps operate very differently from firms that are constrained by other factors, and they offer very different employment opportunities. For the benefit of workers and employers, it is imperative that we learn to tell them apart.If this is an issue, how big is this and in which sectors?
3) Do these skills give enough returns? Let us assume there is a skill gap. If a person invests time (even if the money is sponsored by the govt.) will the new job give that person enough returns? The outlook article looks pessimistic.
3) Even if people are trained, are there enough jobs in the market? This is a huge bottleneck. How do we know that the number of people trained is equal to the demand? In skill training programmes, people are trained on niche skills. If there isn't enough demand then the skill acquired is not of much use, since most of these don't have transferable aspects. This is also a problem with engineering degrees. The difference is that engineering training gives people transferable skills - aptitude, problem solving etc. So, even an aerospace engineer or a mining engineer can use these skills to get jobs else where if there are no jobs in the sectors specific to their degrees. This is not the case with most of the traditional skill development courses.
Richardo Haussman terms this as economic complexity. When a person learns how to stitch a shirt for males, it is easy for that person to acquire the skill of stitching shirt for females but difficult to acquire the skill of welding. The problem is grave in case of narrow focused skill programmes.
4) In a continuously changing world, skill required today would become obsolete tomorrow. How do we deal with this situation?
5) A training programme is successful if it results in jobs. If economy is the problem, people won't get jobs and these skill programmes will be branded ineffective, unnecessarily for no fault of theirs. The logic of economic growth ---> more companies ---> demand for jobs ---> employees and employers invest in skill training needn't be linear. But definitely, in an ailing economy, this is an issue.
6) This recent article raises questions on using the number of placements as metric for skill training programmes. It highlights another important issue of retention. Some people aren't comfortable with the conditions - booking tickets, SIM cards, hospital facilities, sharing space with strangers and so on. These make people to go back to their villages. When these are addressed, there is increase in retention.
7) The final question: How did this transition happen in countries like China? Did government set up skill development programmes at huge scale OR did it happen through the general principles of market - companies required skilled people, so they either trained them OR people invested to train themselves since there is a demand (with good RoI)?