In today’s fast-paced economic landscape, Indian businesses are under constant pressure to innovate, grow and remain competitive. One of the most effective yet underutilised strategies to achieve this is through apprenticeships. These programs, which combine hands-on training with formal education, are a gamechanger, bridging the gap between theoretical knowledge and real-world application. For India, with its vast and youthful workforce, embracing apprenticeships is not just an opportunity—it’s a necessity.
India’s demographic dividend, which boasts around 65% working age population, presents a unique advantage for apprenticeships. But this potential can only be realised if the workforce is equipped with the right skills. Unfortunately, India lags behind other nations in apprenticeship adoption. Shockingly, only about 0.1% of the formal labour force in India is engaged in apprenticeships, compared to 4% in many developed countries. This disparity highlights the urgent need for businesses to incorporate apprenticeship programs into their growth strategies.
Recognising this, the Indian government has rolled out initiatives like the National Apprenticeship Promotion Scheme (NAPS) to increase industry participation and encourage companies to hire and train apprentices. These schemes provide financial incentives to companies, making it economically viable to train apprentices. These efforts, along with India’s expanding industrial base and initiatives like ‘Make in India,’ provide a fertile ground for apprenticeship programs to flourish. Additionally, global organisations like the United Nations Development Programme (UNDP) are actively supporting these efforts through campaigns such as Advantage Apprenticeship, which aims to connect young talent with businesses.
By adopting apprenticeship programs, companies not only develop a workforce tailored to their specific needs but also contribute to India’s economic growth.
Here are five key reasons why apprenticeships are crucial for business growth in India.
1. Addressing the Skills Gap
India’s education system often falls short of preparing graduates for the workforce. According to the India Skills Report 2023, only 47.2% of graduates are deemed employable in their respective fields. Apprenticeships bridge this gap by providing on-the-job training aligned with industry needs.
For example, Tata Motors’ apprenticeship program has been instrumental in creating a steady stream of skilled workers who meet the company’s rigorous standards. Similarly, in the IT sector, Infosys has utilised apprenticeships to train fresh talent in emerging technologies like artificial intelligence and cloud computing, ensuring they are ready to tackle real-world challenges from day one.
2. Cost-Effective Workforce Development
Hiring and training new employees is often a costly affair, especially in industries requiring specialised skills. Apprenticeships offer a more budget-friendly alternative. Under NAPS, businesses can recover up to 25% of an apprentice’s stipend, capped at Rs 1,500 per month, significantly reducing training costs. Maruti Suzuki India Ltd., which trains around 5,000 apprentices annually, is a prime example. The company benefits from lower training expenses while building a skilled and loyal workforce, ready to contribute to its long-term goals.
3. Boosting Productivity and Innovation
Apprentices bring fresh perspectives and enthusiasm, often leading to increased productivity and innovation. A study by Ernst & Young revealed that apprentices can boost workplace productivity by up to 15% within their first year. Startups, in particular, benefit from this youth energy. Zoho, an Indian software giant, has successfully integrated apprentices into its teams, leveraging their creativity to drive product innovation. This approach has helped Zoho maintain its competitive edge in the ever-evolving tech industry.
4. Building a Loyal Workforce, Reducing Attrition
Apprenticeships foster a strong sense of loyalty and belonging. Once apprentices transition to full-time roles, they are more likely to stay with the company. According to a study by the Confederation of Indian Industry (CII), companies with robust apprenticeship programs see attrition rates drop by as much as 30%. Bosch India exemplifies this, with over 70% of its apprentices staying on to build long-term careers within the company. This not only reduces hiring costs but also ensures a stable, experienced workforce.
5. Strengthening Industry Reputation and Compliance
Embracing apprenticeships enhances a company’s reputation as a socially responsible entity. It also ensures compliance with the labour laws. The Apprentices Act mandates that companies with a workforce comprising 30 or more employees, with ratios ranging from 2.5% to 15% of their total workforce.
By fulfilling these requirements, businesses also contribute to India’s Skill India mission while improving their public image. Larsen & Toubro, for instance, has earned a stellar reputation for its commitment to skill development through comprehensive apprenticeship programs.
Apprenticeships are more than just a tool for workforce development—they are a strategic investment in the future. By adopting apprenticeship programs, businesses can address the skills gap, reduce costs, boost innovation and foster loyalty, all while contributing to India’s economic growth. In a competitive market, companies that embrace apprenticeships will not only thrive but also play a pivotal role in shaping the nation’s workforce of tomorrow.
👉 Empower your business with skilled talent through apprenticeships. Build the workforce shaping the future. https://www.apprenticeshipindia.gov.in/establishment-registration
