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The business of skilling: How to sustain, survive and become impactful

by Madhuri Dubey
October 16, 2017
in Skill Talk, Training partners

 Dr Gayathri Vasudevan, CEO, LabourNet Services India Pvt Ltd, has been redefining the benchmarks in vocational entrepreneurship with determined focus on skilling and entrepreneurship development. Recognized recently by Business Today magazine as one of the Top 30 powerful women in business, she has seen many struggles and won many battles throughout the journey of LabourNet, as it is getting built as a leading social enterprise. In a brief conversation, she shares some quick advice for entrepreneurs in skills and vocational training space and tells us how one needs to explore business models and funding not remain limited to government schemes, funds, incentives and subsidies. Let’s read on…

inverted-commaWhat motivates you to do business in the skills space is the most important factor! The primary goal of your business is determined by what has motivated you and what drives you to get into this business or start a venture in skill space. If the reason is that government has come up with many schemes and incentives, then you are limiting yourself to only one source of funds. If you are a budding entrepreneur, you may not want to start your journey without understanding the big picture of skill development and vocational training. A lot of homework is needed to explore a wide range of business opportunities.

Evolving market in skilling, workforce development and the need for a business model

Your business model cannot be based on one line of business such as offering PMKVY courses or setting up a PMKK center. It needs a larger vision, you need to understand the market, like today, and we have growing requirements for training, re-skilling, Recognition of Prior Learning (RPL) and entrepreneurship development to meet the dynamic demands of the industry and the job market. The business model has to be built around these market needs that specify the workforce skills and knowledge, it needs to evolve; only then you can sustain your business and explore multiple revenue streams. Let’s remember, the role of government is merely an adjunct. Your problems get compounded when you make government as the single prime factor of the business.

Understand the business domain and do necessary research

Just because you’ve heard of an attractive incentive or a subsidy from the government, let’s say through PMKVY, you cannot jump into decisions and conclusions and later regret if there are changes in the scheme. This is definitely not business, your primary motivation cannot be making fast money! Such a short-sighted view is sure to get you into trouble the moment government comes up with changes in the schemes, introduces new compliances or statutory measures.

Business of skillingMoreover, why should you limit your scope to base level skilling, targeting the youth alone? Start thinking differently, look for other opportunities; there are many graduates who are unskilled or semi-skilled, there are many people in the older age group who need training and reskilling and there is great opportunity at the bottom of the pyramid to generate livelihood options through skills. Such research will help you build a sound business model and implement it, of course, the model should be flexible enough to tweak as you go along.

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As a startup, if your mainstay is a government scheme like PMKVY and achieving targets in skilling and vocational training, the vagaries are huge and so is the impact on your business. This can’t be the reason why one comes into business and why one exists in business. You cannot maintain your cash flow and there will be more trouble to follow, you need to expand your outlook and strategize well to sustain your business. Dr Gayathri Vasudevangayathri-vasudevan

 Leverage the evolving ecosystem in skilling and vocational training

Today, many things are falling in place to create an ecosystem around skilling. We have a huge repository of Qualification Packs (QPs) and National Occupational Standards (NOS) pertaining to jobs roles in many industries. There is course content that can be used for multiple purposes in training. You can explore new partnerships with educational institutions that need interventions in skill development for school and college students.

If your core strength is training, and you are clear about the value you bring to this ecosystem, then you can survive against many odds. If this is your reason to start the business and you are keen on building it up, then your customers will get built both laterally and vertically as you provide quality and consistency in your services. You will be addressing the need for skilling and vocational training in the context of many organizations and industries.

Impact of changes in implementing PMKVY

Today, many Training Partners have to re-empanel themselves directly with NSDC to implement PMKVY. The franchise model is discontinued and the franchise centers have to convert into independent training partners following the compliance norms. Also, there’s plan to implement the scheme in a decentralized manner to ensure quality, relevance and efficiency with different touch points. In this model, the state allocates the targets and approves the budget and the training partners sign an MoU at the district level. The course curriculum is offered by NSDC. With this, the government hopes that with decentralisation there will be tighter control, more accountability and monitoring. Though this model may make skilling more relevant to local needs and cater to the industry demands in the region, one cannot rule out the scope for delays due to bureaucratic procedures.

Future of small training companies in skilling

According to the latest rules from NSDC, there are 3 options for training companies to acquire a formal identity:

  • Option 1: Become a wholly independent legal entity as a Training Provider, retaining existing name
  • Option 2: Be owned by existing Training Providers
  • Option 3: Become a wholly independent legal entity as a Training Provider with a new name

Whichever option you choose, we need to remember that small organizations need a parent brand, and initial handholding and mentoring to understand how the system works and what it means to make an impact in a predominantly social space. They need to know that skilling is not just meeting targets in mobilization and training, there are several other issues that need to be addressed. And it is absolutely essential to deal with complex issues that relate to jobs, placements, migration and other related aspects of skilling ecosystem.

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Tags: business of skillingChanges in PMKVYdecentralization of PMKVY into districtsDr Gayathri Vasudevan LabourNetentrepreneurship development skillsFranchisee model of NSDCGovernment funds for skill developmentGovernment Schemes for skill businessKaushal Vikas Yojana districtsNSDC Training partnerPMKVY Training PartnerSetting up PMKK skill centersetting up skill training companyskill development training startupstartup funding in skills and vocational trainingvocational training entrerpreneurs
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