Skilling is fast evolving as an industry in India. Today, there are various models available for those who wish to start their skill development centres. However, the “what’s in it for me” question remains unanswered for many of them. This brings in much-needed focus on what one should expect while entering this industry through social or commercial avenues.
To know more about the return on investment (ROI) in skilling along with CSR and other aspects of skill development, Team NSN caught up with Ms Monisha Banerjee, CEO, Anudip Foundation.
Read on to know more about ROI in skill development. You can also watch the video interview on our YouTube channel, for which the link is given below.
Q. How would you answer the “what’s in it for me” question for the skilling industry?
A: Skill development is a difficult yet gratifying journey and it doesn’t give quick results in terms of ROI. There are obstacles that one must overcome. And the way people measure ROI is different for everyone. As a non-profit organization, the ROI for Anudip Foundation is evaluating results at the end of a skill development program.
While the results are gratifying, it is also important to remain financially viable. To achieve that, it is crucial to be mindful of the budget by ensuring that all the projects are self-sustainable.
However, there will be challenges such as administrative or overhead expenses. So, it is crucial to ensure that the entire project costs are completely covered in the investment that one’s making.
So, when someone decides to start a skilling company, there are a few challenges that they might face. If CSR’s the only source of revenue for them, then it will only cover the direct costs of the project. They must find a way to cover the indirect costs or overhead expenses. The budgeting part is extremely important. Learning to budget correctly and to ensure the items are as granular as possible so that all the costs are covered.
Q. What models are currently being followed in skilling?
A: Based on the source of funding, there are different models available for those who want to start a skilling business. At Aundip, we follow a hybrid model where students pay a nominal amount of the fee, may be 5 -10% and the remaining part is grant-based. This model has worked for us as we have seen fewer dropouts over the year.
Whatever the source of the funding is, when it comes to models that are emerging for skilling has more to do with innovation to handle the three big cost heads- infrastructure, technology and human resources.
Covid-19 has accelerated the use of technology which is helping us to do things that wouldn’t have possible otherwise. As our training models are hybrid in nature, partly, we depend on technology for the successful completion of our courses.
Before the pandemic, we had a part technology-part instructor-led model. Due to Covid-19, the in-class instructor-led part had to be quickly pivoted to become online. While the theory parts were cover online, for practicals, we established nodal centres in every region where students used the infrastructure. The use of nodal centres helped us with our infrastructure cost.
The models are meant to bring a higher output per rupee of investment. Learning how to reduce costs by leveraging technology, shared infrastructure and by collaborating with other entities to be innovative is crucial.
Q. Could you please explain tangible and non-tangible ROI in skilling with an example?
A: For most skilling programs, whether it’s government-funded or CSR-funded, one tends to look at a success metric through the percentage of people who are placed. The other metrics that people tend to look at are the average salary of the students, how long have they retained their jobs, are they continuing or are they dropouts.
Also read: Skilling should never be discontinued https://www.nationalskillsnetwork.in/skilling-should-never-be-discontinued/
These metrics form a sensible way of evaluating a skill development program as it determines whether a student was really engaged in a program or not. When looking at the dropouts, if the rate is lower, then it means the program is going well. During the cycle of a program, funded either by the government or by any other institution, these numbers are important.
However, the impact of the program is beyond these numbers. Sometimes, in some cases the initial salary may not be so high, however, it has resulted in a completely transformed community. For instance, in West Bengal, we have been working for a very conservative community for eight years now and our program has impacted the lives of 1800 young girls from this community as they are now working in very non-traditional jobs. So, the impact is a really long-term phenomenon.
Q. Is there something else you wish to share with our audience with regard to ROI on skilling?
A: One of the common ways in which ROI is getting measured is with respect to impact bond. New models are coming up when it comes to skilling. When impact bonds become a more prevalent form of funding for projects, it would be more about adjusting the costs. Here, flexibility is going to be crucial. When people have the flexibility to play around with their models, they can certainly innovate and experiment a lot. With the impact bond, there will be new paradigms for funding in skill development and it also might change the current way of CSR funding.