A new paper from the Kauffman Foundation talks up the successes of India's approach to workforce development. According to How the Disciple Became the Guru, Indian companies have done such a good job at training their workforce that the U.S. should consider adopting some of India's practices in this regard (thus the title of the article). Or, as the authors of the paper conclude:
Indian companies have learned how to take the output of a weak education system and turn graduates into world-class engineers and scientists. Imagine what could be done with a worker base that has received the high quality of education available in the United States.
Respectfully, I disagree with the authors' conclusion.
The authors talk in glowing terms about the huge outlays of top Indian companies. Here are a few examples:
- Infosys has spent some US$120 million to construct a training facility in Mysore with 300 full-time faculty.
- Wipro provides twelve to fourteen weeks of classroom training for its new recruits, supplemented by need-based training afterward.
- Satyam established a 240,000-square-foot facility with 68 full-time training staff. The facility is complete with a swiming pool, deer park, and all other kinds of amenities.
I don't question the ingenuity of the Indian companies in overcoming a severe obstacle in terms of human capital. I just don't think this approach translates very well to the U.S. context. Despite some shortcomings, the U.S. system of community colleges does an admirable job of exactly what these Indian companies have been forced to do. Replicating these efforts in the U.S. by having company instructional facilities on top of an extensive system of community colleges doesn't make a lot of sense.
The real lesson, I believe, is for companies in other emerging markets that face the same constraint that India has faced - a deficient system of post-secondary education. Russia and Brazil immediately come to mind in this regard.
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Speaking from the experience of setting up Call centers in India about three years ago: There is a huge difference between the American and Indian entry-level workforce. For Indian workers, a job at a callcenter was a career. Even though they had to work nights to service a North American client, employees invested long hours in personal development, including technical training and "accent-neutralization."... They were all paid on salary and expected to work unpaid overtime or split shifts when call flow demanded it. I don't know what average tenure was, but it was certainly measured in the years. Contrast this with American entry-level call center workers. My firm was forced to farm labour from highschools, stay-at-home moms (via remote workstations) and yes, even prisoners. Average tenure at almost all sites was less than a year, and mostly just a result of time-based "incentive" compensation to keep them around. This attrition (and requisite incentives) is a big expense when many clients' training programs lasted 4-6 full-time weeks. If anyone mentioned overtime or split shifts, "union!" was the cry. I think it's pretty clear in which environment a rational firm would choose to invest in more human capital! I think that you're right that this approach wouldn't translate well.
Read more Read lessWhile it is indeed true that the elite firms of India have invested a great deal in their workforce and continue to do so (many of these campuses are actually inspired by the famous GE campus in Bentonville!), at the next level the whole system of vocational training is working pretty poorly. Companies are not investing very much, attrition rates are high and the institutions that provide vocational... training are not doing a good job either. Our work with organisaions such as TeamLease in India suggests that as a country we have a long way to go.
Read more Read lessWhile a number of elite companies (several inspired by GE's famous CrotonVille campus) have indeed invested a great deal of energy into training their workers, the "old-economy" / "smoke-stack" companies have not quite done so. The Vocational Training effort in India is very weak. In our work with TeamLease we realise that a lot more work remains ahead of us in training the majority of our workforce.