Chang­ing Times: When It Comes to Pay, Blue-Col­lar Jobs are Red-Hot

Peo­ple with vo­ca­tional skills that in­dus­try needs earn more than MBAs or engi­neers

The Economic Times - - Front Page - Sreer­adha.Basu @times­

Mum­bai: Many of the 16 mil­lion or so In­dian stu­dents writ­ing Class XII board ex­ams this year will as­pire to get into one of the In­dian In­sti­tutes of Tech­nol­ogy and per­haps af­ter that an In­dian In­sti­tute of Man­age­ment. Not many are look­ing to get into a polytech­nic to learn a trade, es­pe­cially af­ter hav­ing com­pleted 12 and more years of school­ing. Could it be time for a re­think? Those who can’t make it to the premier en­gi­neer­ing and man­age­ment in­sti­tutes seek ad­mis­sion into those lower down the or­der. The ones who sub­se­quently en­ter the job mar­ket may be con­fronted by what seems like an anom­aly — peo­ple equipped with skills that in­dus­try needs com­mand bet­ter pay. At a time the govern­ment is in­ten­si­fy­ing its fo­cus on the Skill In­dia mis­sion, statis­tics on 12 sec­tors from staffing so­lu­tions com­pany TeamLease Ser­vices in­di­cates that salaries of some vo­ca­tion­ally skilled blue-col­lar job pro­files ex­ceed those of engi­neers by be­tween 10% and 27%.

In six out of the 12 sec­tors — ap­parel, au­to­mo­tive, con­struc­tion, food pro­cess­ing, gems & jew­ellery and lo­gis­tics — the salaries for cer­tain job pro­files are at par, or even more than those of MBAs, par­tic­u­larly in the five-eight years’ ex­pe­ri­ence cat­e­gory.

“Two fun­da­men­tal fac­tors are driv­ing the trans­for­ma­tional shift in pay­out struc­tures — a gap­ing de­mand­sup­ply im­bal­ance and an acute short­age of skilled work­ers,” said Ri­tu­parna Chakraborty, co­founder of TeamLease, which runs a chain of skill de­vel­op­ment cen­tres through IIJT. “Mil­lions of blue-col­lar po­si­tions in de­mand have gone un­filled and the few that get filled have be­gun to com­mand much higher salaries than ear­lier.”

It should be noted that the study ex­cludes those with MBAs and en­gi­neer­ing de­grees from the top 1-2% schools, who plainly com­mand a pre­mium. But that ac­counts for a frac­tion of such schools in In­dia, which has 3,000 of each.

Data for the study was culled from TeamLease pay to as­so­ciates in the pe­riod 2013-15, job por­tals and Na­tional Skill De­vel­op­ment Corp (NSDC) job de­scrip­tions.

Ac­cord­ing to Chakraborty, since most blue-col­lar work­ers are un­trained, those that are skilled and in pro­duc­tive jobs get paid sub­stan­tially more than be­fore. Engi­neers, on the other hand, have suf­fered from two fac­tors — poor qual­ity of ed­u­ca­tion and, stem­ming from that, lack of em­ploy­a­bil­ity. About 80% of grad­u­at­ing engi­neers are re­garded as un­em­ploy­able, ac­cord­ing to the Aspir­ing Minds Na­tional Em­ploy­a­bil­ity Re­port, which is based on a study of more than 150,000 en­gi­neer­ing stu­dents who grad­u­ated in 2015 from over 650 col­leges. MBAs are paid more than engi­neers on av­er­age but sev­eral vo­ca­tion­ally skilled job pro­files are catch­ing up, es­pe­cially in the fiveeight years’ ex­pe­ri­ence cat­e­gory.

Ac­cord­ing to a case study on the eco­nomic ben­e­fits of vo­ca­tional ed­u­ca­tion and train­ing in In­dia by the City & Guilds Group, while much of the de­vel­oped world ex­pects to see its labour force shrink by 4% over the next two decades, In­dia’s work­force will in­crease by 32%. Es­ti­mates show that by 2022, the US will ex­pe­ri­ence a short­fall of 17 mil­lion skilled per­sons com­pared with what’s ex­pected to be a sur­plus of 47 mil­lion in In­dia if the skilling pro­gramme meets tar­gets.

Still, long-term em­ploy­ment trends, es­pe­cially in man­u­fac­tur­ing, can be un­pre­dictable. Ris­ing wages could price mar­kets out of con­tention and au­to­ma­tion could re- duce the num­ber of jobs in fac­to­ries.

For­mal vo­ca­tional ed­u­ca­tion in In­dia ac­counts for only 2.8% of stud­ies cur­rently pur­sued by youth aged 15-29, given the bias to­ward white-col­lar jobs. But that pre­dis­po­si­tion may not be jus­ti­fied based on the salary met­ric.


Ac­cord­ing to the TeamLease study, in­comes of elec­tri­cians in the au­to­mo­tive sec­tor start at 15,100 per month, on par with those of qual­i­fied engi­neers at 15,200. In five-eight years that changes — an elec­tri­cian earns about 49,400, a me­chan­i­cal en­gi­neer 41,800 and an elec­tron­ics en­gi­neer about 47,500.

In the con­struc­tion sec­tor, the start­ing salary of an elec­tri­cian is Rs 16,200 com­pared with 14,800 for a civil en­gi­neer. In five-eight years, the for­mer will get 54,800 com­pared with 43,300 for the en­gi­neer.

Spe­cial­ist job pro­files such as ad­vance pat­tern maker (ap­parel), ser­vice su­per­vi­sor (au­to­mo­tive) and mas­ter maker (gems & jew­ellery) of­fer salaries at par with MBAs (typ­i­cally hu­man re­sources or mar­ket­ing).

The start­ing in­come of an ad­vance pat­tern maker in the ap­parel in­dus­try is about 20,000 per month while an MBA in mar­ket­ing earns about 17,400 and an MBA-HR about .₹ 17,200. Over five-eight years, the pat­tern maker’s salary rises to around Rs 55,100 while the MBA-mar­ket­ing will get around 52,800 and the MBA-HR around 49,300.

“Peo­ple are pay­ing for skills and ca­pa­bil­i­ties, not the ed­u­ca­tional de­gree,” said Narayanan Ra­maswamy, head, ed­u­ca­tion & skill de­vel­op­ment, KPMG In­dia.

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