New Delhi: Despite an increased perception of risk and unprecedented public ire over the gang rape of the 23-year-old physiotherapy student —who along with her friend was beaten up and thrown out of a moving bus on December 16 — some human resource companies in NCR say the capital’s women’s workforce will march on.
Rituparna Chakraborty, Vice President Indian Staffing Federation, told Firstpost that women continue to seek employment in the region.
“The fact is that rape and sexual abuse is a reality of life in Delhi NCR and large parts of North India and women seeking jobs in this part of the country have already factored in all these challenges,” she said. “The truth also is, that rape and the abuse of women has nothing to do with work or what a woman does outside of home. We see 16-year-olds raped as much as 60-year-olds, so not working is not a solution or guarantee for not being violated and it should not impact the decision to take up a job,” she added.
Following the incident of rape of the girl who succumbed to her injuries on December 29, many offices in and around Delhi NCR have issued advisories for its women employees and also seen a change in their attitude towards personal security. AFP
Jaideep Singh, spokesperson for Ikya, a human capital solutions company, agreed. He said that while the gang rape case has brought much focus on the issue of the safety, Ikya has not seen an impact in terms of hiring women candidates or jobs being declined by female candidates.
Chakraborty— also Co-Founder and Senior Vice President at TeamLease Services Private Ltd, a human resources company — however said, that women employees have become more cautious and have begun asking more questions about the job and facilities they will receive in terms of pick ups and drops, work timings and hours, options of working from home, etc.
“Yes, women are a little more cautious about their rights, what they deserve and what is good for them, which I think is a good thing, one that nobody should forget,” Chakraborty said.
While the case of the gang rape has prompted many women in the Delhi NCR region to take charge of their own safety, Chakraborty said that women working in and around Delhi, Noida and Gurgaon have usually always accounted for the challenge.
“Many women who work in offices here do not have the resources or option to give up on a job because of an incident like the rape — and they shouldn’t even give up. They come from social backgrounds where they need to work or provide for a family or just for a better life. And, Delhi NCR has ample opportunity and lucrative jobs in this part of India,” Chakraborty said.
OFFICES STEP UP SAFETY MEASURES
Following the incident of rape of the girl who succumbed to her injuries on December 29, many offices in and around Delhi NCR have issued advisories for its women employees and also seen a change in their attitude towards personal security.
While it is statutory for corporates, with the exceptions of business processing operations (BPOs) which seek special permission, to have limits on working hours for women, many companies are making sure that its outer limit for having female employees at work is 7 pm, Chakraborty said.
Chakraborty said that she has seen a lot of companies they service, shifting office timings and shutting by 5.30 pm-6 pm so that people can get home on time and before dark.
“Leaving office early has pretty much become a norm — especially for women who can work from home. All across people and companies are also ensuring and taking steps to make sure employees reach home safely,” she said.
Teamlease, which offers its clients services in hiring, hygiene and productivity works with around 450 companies in the Delhi NCR region, caters mostly to companies dealing in consumer durables, E-commerce, telecom, infrastructure, data and customer support. Chakraborty said that more than 400 of these have issued advisories for women employees.
Ikya’s Singh told Firstpost that many companies they service were already accommodating women employees in terms of allotting women regular hour shifts, not having them stay on in office late and providing transport facilities.
“While the gang rape of the girl and her death has created a lot of waves and increased individual security awareness, many companies we work with have been accommodating women for a while now,” he said.
A recent survey by industry body ASSOCHAM’s Social Development Foundation (ASDF) found that 89 percent of the survey’s participants said they have begun insisting on leaving offices on time, immediately after duty hours following the gang rape case and a heightened sense of insecurity.
The survey, whose sample size was 2,500 women across Delhi NCR and other metros, also cited that women who travel by buses, chartered buses, three-wheelers and metro are most susceptible to anxiety.
NO WOMEN QUITTING JOBS
The survey also said that productivity of the workforce has been affected and that one in three amongst the female worker has either reduced working hours after sunset or quit jobs after horrendous Delhi rape incident.
Chakraborty, however, said that TeamLease is not aware of any woman employee who has quit her job due to safety concerns. “Women employees must face a lot of family pressure if nothing else and there is definitely some change in their behavior, but nobody to my knowledge has quit work for the security reason,” she said, adding, “Personally, I don’t think once should quit. Doing that is only acknowledging defeat.”
She also denied any drop in productivity.
“I don’t think there has been any drop in productivity. It’s not like people have been taken by surprise at the incident, as this has always been the reality. While rape case has been an eye opener, it’s not new. it’s a wake up call — but women have always been and are aware of the risk of moving around in Delhi NCR,” she said.
The gang rape of the 23-year-old girl saw a fierce public outcry and protests against the state and government for failing to stem violence against women.
Five of the six accused have been charged with murder, attempt to murder, gang-rape, kidnapping, criminal conspiracy, dacoity, murder and unnatural sexual offences. The sixth victim , a minor, will be tried by the juvenile justice board.
NEW DELHI | BANGALORE: Rituparna Chakraborty,co-founder and SVP, TeamLease Services, may find it hard to get conclusive assurances to her cry of anguish at the December 16 gang-rape case in Delhi, but the uproar the incident has triggered across the country is at least having one salutary collateral impact.
Across corporate India, the tragic and devastating incident has shaken employees, managers and CEOs alike, pitch-forking issues such as sexual harassmentand women safety to the top of the list of senior management discussion topics, and with it, a priority for action.
Although organisations are wary of taking knee jerk reactions, they are talking about the issue of women safety, reviewing and reinforcing processes already in place and creating them if they don't exist.
The Employers' Federation of India (EFI), which represents employers' interests in the areas of human resources, industrial relations and labour issues, has held discussions on the Delhi incident, although much of it informally.
EFI president Rajeev Dubey said the discussions have been at three levels. "The first level is the physical safety of women, especially those who work in shifts in the services sector or work till late; the second level is sexual harassment, and the third is cultural and historical mindset," said Dubey, who also oversees HR and is a member of the group executive board at Mahindra & Mahindra. "Ultimately, the mindset has to change in the long term."
Still, experts say firms do not want to be caught vulnerable on this count, as an incident could leave lasting reputational - and maybe even financial - damage to firms.
Already, India's record on the issue of sexual harassment at workplaces is far from stellar. A report by the Indian chapter of British charity Oxfam released last month said that 17% of working women in India feel that they have experienced acts of sexual harassment at workplace. This, the report said, indicated a high incidence of sexual harassment among working women from both the organised and unorganised sectors.
While large companies have well defined and codified sexual harassment rules and policies for tackling them, several small and mid-sized firms do not. In many older firms rules exist, but are rarely, if ever, propagated. Experts say the Delhi incident could be the trigger for change.
"The Delhi incident brings focus on these (issues) and will lead to more sensitisation," says Ajit Isaac, CEO of Ikya Human Capital Solutions, a staffing services provider.
Industry body Ficci last week set up an industry task force on safety for women, which will work towards developing a National Safety Policy for Women to be adopted by industry.
In any case, conversations around the issue are increasing, say experts.
Nirmala Menon, founder and CEO of Interweave Consulting, a firm that advises organisations on diversity management and sexual awareness, reveals that communication and conversations on these issues have increased recently in companies, although not all as a knee jerk reaction to the Delhi incident.
"Besides IT, sectors like energy, smaller firms, banks... have asked us to frame and audit their policies on sexual harassment and train their employees and managers as well," says Menon. Employees are being trained to spot when either party feels uncomfortable. Often the perpetrator and the victim do not know that they have been harassing or are being harassed and need to be sensitised to vibes that the other party emits, she explains.
Larger firms and groups that have well defined policies and have enforced them say that strong action has invariably proved effective.
At RPG Group, in the early 2000s, a woman deputy manager had complained of being sexually harassed by her a male colleague, who was three levels her senior. The committee that looked into sexual harassment was asked to submit a report within 24 hours and action taken. The group has not had any sexual harassment case since, says Arvind Agrawal, HR president & chief executive for corporate development.
November 30, 2012:
Long renowned as a manufacturing base, Chennai is fast-emerging as an investment destination for services companies in the banking and financial space.
“Due to a number of factors — cost, infrastructure, and availability of skilled personnel — there has been a move away from cities such as Mumbai and Delhi NCR into other cities. In the last six months, we’ve seen a number of clients express interest in setting up their business hubs in Chennai or expanding their presence in the city,” said Tulika Tripathi, Managing Director for Michael Page India, a specialist recruitment consultancy firm.
Outlining the drivers for the shift to Chennai, she said the city’s infrastructure and connectivity with international and regional locations were key factors.
In addition, lower costs in establishing a base in Chennai, and presence of a strong, local technical pool were differentiators vis-à-vis other cities. Also, the policies of the State Government were investor-friendly, she added.
Another recruitment consultant, Teamlease, too has echoed a positive outlook on Chennai.
According to Teamlease’s latest employment survey for the July-September quarter, Chennai recorded the best growth in hiring out of any Indian city over the last four quarters. The business outlook for financial services in Chennai was better than in cities such as Mumbai, Delhi, Bangalore, Hyderabad, Ahmedabad, Kolkata and Pune.
But the hiring prospects in the BFSI space dimmed a bit during the quarter under review, as per Teamlease. In the previous quarter, Chennai trumped other major cities in BFSI hiring prospects, barring Mumbai, Kolkata and Ahmedabad.
OFF-SHORED WORKTripathi says there is an opportunity for India to garner a larger slice of work off-shored by multinational companies amid the global slowdown. “One of the top-most priorities around the world this year is cost optimisation, followed by process optimisation… As a result, we’ve seen the advent of new job creation because of this global slowdown,” she says.
What is more, a lot of multinationals want to increase their exposure to India and China, because of a growing middle class and domestic demand. Tripathi says a skilled workforce is the country’s strength. “If you look at 10 years ago, we were basically just doing customer service.
“And what India has done quite well is garner client relationships to move up the value chain. So we’ve gone from being just part of an organisation’s support systems to being part of the core functions.”
“It has gone from being a more reactive function for cost optimisation, to a place where we are harbouring talent and harnessing innovation, within finance and operations,” she says.
“There is big demand for finance professionals at the moment,” she points out. Chartered accountants with 6-8 years of experience are currently much sought after, particularily in the areas of MIS, financial control and reporting, she emphasised.
Ashok Reddy, the Managing Director of TeamLease in a discussion with SkillingIndia.com. Excerpts of the interview:
“We believe the market will continue to stay consistently warm for now and will lead to incremental hiring,” states, Ashok Reddy, MD, TeamLease.
SkillingIndia: Given the slowdown in the job market, what’s your assessment on hiring trends for the upcoming year? Any particular sectors or industries that are affected?
Ashok Reddy: There is a cautious approach in the job market to hiring and adding headcount in organizations. Companies have been bruised in the slowdown of 2009 that came after the exuberance of the prior period. There were many knee jerk reactions then and companies through retrenchment let go of fat and muscle. Sectors like BFSI and Telecom led the pack here. Now, they are looking to add back muscle slowly by judging how the market is playing itself out through the global cues.
We believe, across sectors there will be cautious optimism towards hiring and it will be a quarter on quarter visibility rather than one being able to project for the long run. Companies will continue to build on key skills and look to either have entry level hires or lateral hires during a slow market. Also, since the temp staffing industry is a springboard in good times and a shock absorber in bad times, we will see a lot more hiring happening through the temp route given the uncertainties.
SkillingIndia: In your opinion, when is a turnaround expected to happen?
Ashok Reddy: The Indian and global economic cues don’t seem to be very positive at this juncture. Having said that, there is no strong negative reason to create a knee jerk reaction in the job market, either. We believe the market will continue to stay consistently warm for now and will lead to incremental hiring, but it won’t have a quantum change unless a surprise comes by.
Our economy is still one of the most resilient and I am fairly confident that the current slowdown will pass soon. Major economy indicators like inflation, WIP, IIP, etc. are not worse unlike earlier quarters, and should ideally start improving.
SkillingIndia: What are the pluses and minuses of temporary staffing workforce in India?
Ashok Reddy: Temporary staffing has lot of positives like flexibility in tenure, access to job market, ability to learn on the job, comprehensive statutory compliances, manpower for projects, hiring and mapping capabilities, it addresses the long tail of demand, leverages economies of scale and strong HR support systems.
Some of the so-called minuses are the new concept of employment through temp route, the mindset bias for permanent jobs, and the unorganized and informal sector employment competition.
SkillingIndia: What can candidates opting for temporary staffing positions expect in terms of assessments and training?
Ashok Reddy: Most hiring happens by way of candidates being assessed for the job through written tests and/or interviews. The large volume of temp hiring happens at the bottom of the pyramid where you have a lot of first timers entering the job market. While a lot of learning for the temps happens on the job, it also enables them to earn while they learn. Also, we do industry and company specific assessments and thereon specific induction and functional trainings ramp ups hires to attain speed in their jobs.
These days lot of emphasis is being laid on skilling the workforce and we at TeamLease have also embarked on this journey. So, whether it is through apprenticeships, vocational training, assessment and coaching, industry academia partnership, etc. there are various means to bring candidates up to the mark by providing them the required skilling/training.
SkillingIndia: Any innovative training techniques that TeamLease uses for skilling candidates?
Ashok Reddy: While a lot of training does happen on the job, the other methodologies used by us to reach out and skill the temps are through the phone – for induction, using technology–satellite classrooms, e-learning study circles, learning management systems through the net, upcoming cloud campus, etc.
We have an eight-minute assessment for any first time caller if he or she is willing to undergo it, which then leads to further assessment and training of the candidates. This is a first basic step apart from the ones mentioned above.
SkillingIndia: How often does the curriculum undergo changes to remain relevant to the job market demands?
Ashok Reddy: We do a quarterly curriculum review panel of the course contents by having a panel of academicians. Our teachers and the industry makes the required changes and makes the content relevant and up to date on a recurring basis.
SkillingIndia: Anything you would like to add?
Ashok Reddy: The public policy case for temporary jobs is strong. Most Indians in temporary jobs are labour market outsiders (less skilled, less educated, small town residents, first-time job seekers, women, retired, etc) who have been traditionally disadvantaged. Temp jobs reduce frictional unemployment (temporary mismatches of demand and supply) by providing labour market liquidity and substituting for the shameful performance of employment exchanges. Additionally, these jobs are a non-fiscal market substitute (albeit short term and imperfect) for social security and unemployment insurance.
Most importantly, organized temporary jobs are a bridge to full employment; more than 40% find permanent jobs within a year. Given that un-employability is emerging as a larger problem than unemployment, organized temporary jobs have earned a review of the regulatory cholesterol that holds them back just based on an improved employability corridor more powerful than the low conversions of the Apprenticeship Act.
The case for temporary jobs from a labour demand perspective is also important. Temping increases the strategic flexibility of employers by lowering fixed costs (not total costs). In a country like India, this flexibility creates a viable and important alternative to the blind capital substitution of labour. These jobs also represent cost effective handling of peak capacity requirements (particularly for service companies that cannot inventory their output and cyclical manufacturing like textiles). Global experience confirms that temporary jobs reduce unemployment.
India Infoline News Service / 09:10 , Nov 20, 2012
The survey revealed that overall faith in personal belief or superstition is quite high (62%) among employees in India and more than half of respondents (51%) follow superstition at their work place.
TeamLease Services, India’s largest composite staffing company, released the findings of its latest survey ‘Superstitions@Workplace’ as part of its survey series to understand ‘India’s new World of Work’. The survey revealed that overall faith in personal belief or superstition is quite high (62%) among employees in India and more than half of respondents (51%) follow superstition at their work place.
While Vaastu Shastra and Feng Shui are the most common practices followed at the workplace, the personal favourites are lucky charms like stones, colour specific items, specific number oriented items and the ubiquitous bamboo shoot. The study also states that management in India is generally adaptive to various superstitious beliefs of employees and does not restrict them from practicing it at work as long as it does not negatively affect productivity. Add to this, majority of the senior management at companies themselves believe that superstitious practices are more prevalent at the top of the order.
Commenting on the study, Surabhi Mathur Gandhi, Sr. V-P and Co-founder, TeamLease Services, said, “The aggressive drive to a higher productivity and performance based output is reflected by the radical shifting of gears within the corporate circle. Keener business focus, stringent performance metrics and an acute sense of onus has set the pace for our work force today. With equal fervor we observe popular practices like FengShui or Vaastu being discreetly incorporated by all and sundry as a good measure of support. Favourite good luck charms like the laughing Buddha, the musical fountain, frog, tortoise or even the simple bamboo shoot stand out strikingly at most work places today; and an acceptance of these beliefs across the board has made it non-conflictive.”
The study goes to say that more than 48% of the respondents felt that practicing superstition at workplace has had a positive effect and modern organizations impose fewer restrictions on such practices. While management does not lend explicit support to employees who practice superstitions, they also said in the same breath that no one interferes as well when an employee is seen to be following some superstitious belief.
Furthermore, when the senior management of companies was quizzed, majority of them revealed that though practices like FengShui, Vaastu Shastra, lucky charms, arrangement of idols and stickers of gods at workstations, laughing Buddha, money plant, etc. are common at workplaces, they do not have any significant influence on people and the corporate culture. Practice whatever you may, but ultimately the work and outcome will be subject to your skills, knowledge and application, is what they seem to say, according to the TeamLease study.
Employees across all levels and cities are happy with the kind of superstitious practices being followed in their organisations. A higher percentage of female employees (80%) are happy with superstitious practices followed in their organisations as compared to males (68%). When asked who follows superstitions more at workplace between men and women, majority of the respondents (63%) felt that female workers are more superstitions than their male counterparts.
The survey, conducted by Market Search IPL for TeamLease, covered 800 companies across the top eight cities in India - New Delhi, Mumbai, Chennai, Kolkata, Bangalore, Hyderabad, Pune and Ahmedabad. The respondents’ profile ranged between the age group of 21 to above 45 years with 60% from the junior level, 25% from the middle management and 15% from the senior level. Among the cities, it was observed that the level of superstition seems to be comparatively less followed in Ahmedabad and Pune whereas it was higher in Bangalore and New Delhi.
Even as India struggles to educate its burgeoning population, it faces a second pressing challenge: better preparing its college graduates for a competitive global work force.
It's not enough to simply focus on expanding educational access in the world's second-most-populous nation, said speakers at an international-education conference here, organized by the Federation of Indian Chambers of Commerce and Industry. India, as a rising economic and political power, must also improve the quality of its higher-education system.
Close to a million students graduate from Indian institutions with engineering degrees each year, said Shiv Nadar, a technology entrepreneur. "How many of them are industry-ready?" asked Mr. Nadar, who is also the founder of a private university that bears his name. "None. Absolutely none."
Companies must spend months preparing new employees for their jobs, said Ajay Kela, president and chief executive of the Wadhwani Foundation, a nonprofit organization that has supported the expansion of vocational education. That's a "lose lose" situation, for both students and corporations, he said. Students spend time earning a degree only to find it hasn't properly prepared them, while "companies aren't getting the right talent."
Mr. Kela advocated the expansion of vocational education to better equip students with the precise training they need. Just 4.8 percent of Indian students are enrolled in vocational education, while nearly half of American students attend community colleges.
But today's students do not simply lack job-specific skills, said another speaker, Manish Sabharwal, chairman of TeamLease, a company that provides temporary staffing and human-resource services. Graduates do not have the critical-thinking and problem-solving skills to succeed in today's global marketplace.
"Plumbing is different than poetry," Mr. Sabharwal said to the audience of 650, which included Indian and international educators, government officials, and business leaders. Companies can teach skills, he said, but they can't teach creativity.
"We're not asking you to train plumbers," Mr. Sabharwal said. "We're asking you for curious, confident risk-takers."
But India faces enormous headwinds in making change, other speakers acknowledged. Half of India's 1.2 billion people are under the age of 25, and while the country's middle class is growing, much of the population remains in poverty. India spends just 1.2 percent of its GDP on higher education, compared with 3.1 percent in the United States and 2.4 percent in South Korea.
What's more, India is home to roughly 33,000 colleges and universities, more than half of the world's postsecondary institutions, noted Philip G. Altbach, director of the Center of International Higher Education at Boston College and author of a recent book on Indian higher education. It's "impossible" to monitor so many institutions and ensure quality, Mr. Altbach said.
And there are structural issues that hamper progress, said Pawan Agarwal, a senior Indian government official. For example, teaching and research may often be carried out by separate institutions here. By contrast, in the United States faculty members are expected to do both, allowing research to inform their teaching and giving students opportunities to work in laboratories.
Two of the biggest impediments to change, Mr. Agarwal said, are "legacy and culture."
The Missing MinisterThe annual education conference brought together public and private education, Indian and international delegates, and academe, industry, and government. While the pursuit of quality was a theme running through the conference, sessions touched on issues including international partnerships and collaborative research, distance and online education, and whether India could one day become a global education hub.
One face notably missing from the two-day meeting was that of Kapil Sibal, who was, until a week ago, India's minister in charge of higher education. Amid a widespread cabinet shakeup, Mr. Sibal lost his post as minister for human-resource development, although he remains in the cabinet, continuing his work overseeing telecommunications issues.
Many observers here believe scandal within the telecommunications sector had distracted Mr. Sibal, who took over in 2009 with an ambitious reform agenda, from his education efforts. Measures he championed to revamp higher-education regulation and to open India to foreign university campuses have stalled in Parliament.
Nonetheless, over the past three years, Mr. Sibal has been a high-profile ambassador for Indian education abroad, traveling to the United States and elsewhere to promote increased academic collaboration. The Harvard-educated Mr. Sibal has tried to woo the Ivy League institutions to India, while at the same time enlisting international expertise to build up the country's nascent vocational-education sector. A series of high-level talks between Mr. Sibal and Secretary of State Hillary Rodham Clinton helped lead to a $10-million bilateral commitment to expand joint academic work.
Mr. Sibal may be gone, but his successors are giving every indication they will stay the course on his higher-education policies. In remarks opening the meeting Monday, the new junior minister for human-resource development, Shashi Tharoor, pledged action on the foreign-university bill and some 20 other pieces of higher-education legislation currently held up in Parliament, leading one conferencegoer to joke that Mr. Tharoor, a former United Nations under secretary general and Tufts University graduate, was "reading Kapil Sibal's speech."
Mr. Tharoor pledged to get the higher-education "reform agenda back on track," adding that, "for India to sustain its growth momentum and strengthen its competitiveness, a world-class higher-education system is an important prerequisite."
He tried to make the case for urgent action, echoing other speakers in sounding an alarm about the academic quality of graduates of Indian institutions. Many employers, he said, consider current graduates "not ready for prime time." And while the country's elite Indian Institutes of Technology and Indian Institutes of Management produce top-notch students, they are "islands in a sea of mediocrity."
India, Mr. Tharoor suggested, is undermining its competitiveness by remaining closed to foreign campuses. "Our national education policy in the past has remained out of step with the time. Whereas countries in the Middle East and China are going out of their way to woo foreign universities to set up campuses in their countries, India turned away many academic suitors who have come calling in recent years," he said.
Whether Mr. Tharoor and M.M. Pallam Raju, the new minister overseeing higher education, can succeed on the foreign-university bill and other measures where Mr. Sibal could not is an open question, given the political gridlock besetting India's Parliament.
"Everyone is saying they want change," said one attendee, Vasu K. Saksena, president of Manipal Global Education Services, a private education provider. "But change is very difficult to do."
Private state universities are mushrooming across the country. From company heads to small businessmen, everybody wants a slice of the great Indian education pie, find Varuna Verma
PRIVATE PLAYERS: Sharda University and (below) ITM University chancellor Navdeep K. DewanRaghav Kaura was a tad worried. He hadn’t managed to get into some of the top-rated engineering colleges after finishing school. He was considering applying to some private institutes with deemed university status when he heard that some had been ordered closed by the Supreme Court but were operating after getting a stay on the closure.
That’s when he got to know about private universities in and around Delhi. He applied to some, joined one — and is now happily looking ahead.
For students going in for higher education, choice — or lack of choice — is no longer an issue. If they can’t get into state-run institutions, there are always the private deemed universities. And now private state universities (privately funded and managed institutions set up by Acts of state legislatures) are mushrooming as well (see box
). Currently, India has 140 such universities.
The government had been quite liberal in handing out deemed university status to private institutions from the mid to late 2000s. But since 2010, after it clamped down on new deemed universities because many were not up to the mark, there has been a burgeoning of private state universities.
“Private players had found the deemed university route profitable. With that more or less closed, they have now taken this route,” says a University Grants Commission (UGC) official.
So what’s driving the rush? Demand, for one.
Pic: Yasir IqbalIndia will need nine million extra college seats by 2016 if it wants to maintain its current economic growth, estimates Karan Khemka, partner at Parthenon Management Consultancy Group, which unveiled a study on higher education earlier this year. “We need three times the number of universities we currently have,” says R. Narayanan, head of education at consultancy firm KPMG. Both believe private institutions will have to chip in to meet this demand.
State governments are actively encouraging private universities. Haryana and Gujarat have an umbrella legislation under which universities are set up, something that Maharashtra and Karnataka are also reportedly considering. The UGC, however, is insisting on a separate Act for each university as a condition for recognition. The university regulator does not want a repeat of what happened in Chhattisgarh between 2002 and 2005 when hundreds of universities were set up through executive orders issued under one Act. The Supreme Court ordered the closure of 112 of them.
Education is big business, which also explains the rush. For those already in the field, a university was a natural progression. Gurgaon-based ITM University started as an engineering college — the Institute of Technology and Management — in 1996. It could have applied for deemed university status after 10 years, but there was so much stigma attached to that category in 2009 that it was converted into a private state university instead.
For some, it is a logical extension of their existing business. Bengaluru-based staffing firm Teamlease Services noticed during the 2008 economic downturn that a majority of those who applied to it for jobs lacked the skills companies needed, and that it was securing jobs for only 5 per cent of them. In 2009, Teamlease acquired vocational training institute Indian Institute of Job Training.
But it soon realised that students preferred degrees to diplomas, even if the latter assured them of a job. That’s when the idea of aligning the vocational courses to a university was born. The Teamlease Skills University, which has received a letter of intent from the Gujarat government, is expected to feed Teamlease Services’ training and employment business.
For many others, education is a way of giving back to society. ITM University chancellor Navdeep K. Dewan, who spent a lifetime working for British multinational Imperial Chemical Industry, knew he owed his successful career to the education he’d got in India and wanted to do something in return. So he and some friends started ITM. It’s the same sentiment that drives businessman P.K. Gupta, chancellor of Sharda University, who used to supply equipment to engineering colleges, and to HCL’s Shiv Nadar and Wipro’s Azim Premji. The two IT company heads have also set up private universities — Nadar in Noida and Premji in Mysore.
For Suneel Galgotia, chancellor of Galgotia’s University in Noida, it was just another business opportunity. His urge to do something big saw him diversifying from his family’s iconic bookstore in New Delhi into publishing educational books and then stepping into education. He first set up a small institute for a master of computer applications course and then Galgotia’s College of Engineering and Technology in 2000.
The university was the next step. He had applied for deemed university status for the college but that was around the time the human resource development ministry had clamped down on new deemed universities. So he approached the Uttar Pradesh government for a separate private state university.
For many wanting a slice of India’s higher education pie, setting up such a university is preferable because it is faster and, more important, gives operational flexibility. Pramod Maheshwari, promoter of the Kota-based coaching centre Career Point, started an engineering college after he noticed that students were not clearing the IIT entrance exams and were going to second-grade colleges. But being affiliated to an existing university would not have given him the freedom to design a curriculum that was in tune with industry’s requirements. That’s why he set up the Career Point University in Kota (Rajasthan) and Hamirpur (Himachal Pradesh).At the proposed Teamlease University, the programmes will be modular in nature — if a student gets a job after a six-month module, he can start working and return later to complete the degree course. The Shiv Nadar University plans to model the university on the lines of American universities, with around 10 different schools.
There’s some concern that private universities may become a haven for fly-by-night operators. Though Shalini Sharma, consultant, education, at the Confederation of Indian Industry, believes that dubious institutions are not more than 30 per cent of the total, the genuine players are worried at being tarred with the same brush.
“What needs to be done is to strengthen the regulatory framework,” says Amitabh Jhingan, partner at consulting firm Ernst & Young. The institutions have to conform to UGC regulations framed in 2003 on private universities and be inspected regularly.
But there’s little the regulator can do once a university comes into existence through an Act, says a UGC official. All that it can do is put up inspection reports on its own website and hope that potential students and their parents read them. A more stringent version of these regulations was sent to the HRD ministry in 2010 but is yet to be cleared.
Galgotia doesn’t understand what the fuss is about. “Is the quality of government institutions better? Proliferation and competition will ensure quality; not government diktats.”
Raghav Kaura and hundreds like him would be hoping he is right.
Universities are set up by Acts of Parliament in the case of central universities and state legislature for state universities.
Till the early 2000s, only state-run universities were set up this way. Since then, state governments started allowing privately funded and managed universities, known as private state universities through this route.
Deemed universities are public or private institutions that have proven excellence for at least 10 years and are conferred that status by the ministry of human resource development in consultation with the University Grants Commission.
Better clarity on regulations will improve private equity investments into the Indian education sector
Think of the potential in the Indian education sector and it’s easy to imagine long, winding queues of investors waiting eagerly with blank cheques. The numbers certainly seem to point that way — India has over half a billion people in the 0-24 year age group, all of whom need to be educated. Just 12.4% of students currently study beyond the school level. If that number has to increase to 30% by 2020, the country will need another 800 universities and 35,000 colleges. And it’s not just higher education — virtually every segment in the education space presents a business opportunity, be it pre-school, K-12, colleges, test preparation or vocational training. Technopak estimates the opportunity in the Indian private education sector will reach $70 billion by 2013, from $60 billion in 2011.
That’s on paper. The reality is far more disappointing — private equity and venture capital investors have pumped in only $844 million over the past five years in the Indian education sector, according to VCCEdge, a research firm that tracks PE/VC investments (see: Low IQ
). Granted, that’s not insignificant, but it’s certainly small compared with both, total PE investment in sectors like IT & ITES ($3.45 billion), banking and financial services ($6.2 billion) and pharma & healthcare ($2.48 billion) in the same period and the opportunity in the Indian private education sector. So, why is private equity in Indian education on such a steep learning curve?
“The number of entrepreneurs that are worth investing into is not very large "— Jayant Sinha, MD, Omidyar Networks India Over-regulated
Look closer at the big picture, and investable opportunities in education are few and far between. Investors are holding back for a couple of significant reasons. Foremost of these are the regulations governing the core education segment of K-12 schools and colleges. “Education is one of the few sectors that are still in the throes of the Licence Raj and this has dampened the enthusiasm of private equity investors towards the sector,” says Gopal Jain, managing partner of the Mumbai-based Gaja Capital, an early investor in the education space. After making its first investment of around Rs 4.5 crore in Educomp in 2005, the fund has invested in staffing company Teamlease (around Rs 100 crore along with ICICI ventures), test prep company Career Launcher (over Rs 30 crore), the Millennium Schools (part of Educomp) and the Indus Schools, which is part of Career Launcher (over Rs 20 crore). “Since the direction and pace of reform in the education sector have been far from satisfactory, India is getting only a fraction of the capital that it should be attracting into education,” Jain adds.
The core education space — formal education covering K-12 schools and higher education institutions — is highly regulated. Government guidelines stipulate that these institutions can be run only as non-profit organisations under a society or trust. Any surplus generated by the trust or the society cannot be distributed as dividends and must instead be ploughed back into the institution. Even in states that allow for-profit schools (such as Maharashtra and Haryana), getting approval from the education boards is a Herculean task. So, there’s little incentive for entrepreneurs and investors to enter the sector. “Education is a sector that is desperate for more investments but because we have gotten ourselves in the mindset that it has to be done for charity and not for profit, capacity building in the sector has suffered,” says Jacob Kurian, partner, New Silk Route Advisors. The PE has invested $30 million in Hyderabad-based Varsity Education Management, which provides operational and support services to educational institutes in Tamil Nadu, Andhra Pradesh and Maharastra among others.
“As an investor you can’t invest in a structure determined to be a non-profit organisation"— Sandeep Aneja, MD, Kaizen Private Equity
It also makes little sense for investors to sink money into the core business, which holds the assets. “The challenge is that as an investor you cannot invest in a structure determined to be a non-profit organisation,” says Sandeep Aneja, managing director, Kaizen Private Equity, India’s first PE fund focused on the education sector. “What we invest in are companies that provide services to schools.” Kaizen has made three investments since its 2009 launch — distance education provider Universal Solutions (Rs 35 crore), school management firm Altus Learning (Rs 25 crore) and Bengaluru-based daycare and playschool chain Your Kids Are Our Kids (Rs 20 crore). “The opportunities are driven by the quality and quantity gap across all segments,” Aneja adds.
Typically, educational institutions run on a dual structure. The schools and colleges are run by trusts or societies. They then create subsidiaries that supply the land and building or offer ancillary services such as teacher training, maintaining IT and finance departments of the school, or managing the cafeteria and transportation of the institution, in return for a rental or management fees. Investors, in turn, pick up a stake in these subsidiary companies or the holding company that owns these entities. But that’s only if they can get over the bigger problem caused by over-regulation — corruption.Ground Reality:
Government rules say schools must be non-profit entities, which discourages investors. (Photograph by Nilotpal Baruah)A Dirty business?
The trouble with too many rules is that, often, it puts power in the hands of the wrong people. And investors believe this is particularly true in the case of the education business. “There is corruption in any sector that is over-regulated, and education is no different,” says New Silk Route’s Kurian.
The rot starts early, thanks to the lack of transparency when it comes to land acquisition and licences. And that keeps away genuine entrepreneurs. “Politicians control virtually all higher education in India today,” says a PE investor who doesn’t want to be named. He says that most politicians incur virtually no cost in setting up an educational institution — they get the land from the government as a grant and often, builders are willing to construct the building for free in exchange for favours. “People who can actually deliver good quality education are not controlling education. It is either people with real estate interest or political connection,” the PE investor adds.
“There’s a dearth of institutes that provide education with a focus on employability"— Shivani Bhasin Sachdeva, CEO, India Alternatives
The challenge for investors, then, is to find above-board entrepreneurs with business models that are scalable and have high levels of corporate governance. “When we start looking at those parameters, the number of entrepreneurs that are investable is not very large,” says Jayant Sinha, MD, Omidyar Networks India, which has invested Rs 19 crore along with Matrix Partners and Foundation Capital in preschool chain Tree House, employability assessment company Aspiring Minds and language training company English Helper.
Regulation-related issues aren’t the only problems dogging investors in the education sector. Finding resources, cheap real estate and capital also have to be sorted out. “As with any infrastructure business, scaling up in education is a challenge because real estate prices in India are three times than what they should be,” says Gaja Capital’s Jain. Remember, setting up an educational institution doesn’t come cheap. While it can cost anywhere upward of Rs 50 crore to set up a school or college in a metro, even a tier 2 location won’t come for anything less than Rs 20 crore. And finding — and retaining — good teachers is a critical but hugely difficult task.
“Indian education has not been able to attract good talent because our teachers are relatively under-paid. Consequently, the quality of education suffers,” says Amit Kapoor, MD, Matrix Partners India, which has invested in Tree House (Rs 59 crore), Fiitjee (Rs 100 crore) and school management firm, Maharana Infra (Rs 50 crore).Too much for too few
But it’s not as if the sector is all bad news. The informal space, which includes pre-school chains, tutorials and test prep companies, is free of government regulation and currently presents an $8-billion opportunity, with companies like Tree House, Fiitjee, Career Launcher and IMS seeing significant interest from private equity investors. Another area of investor interest is in companies that are helping to solve the employability problem. “There is such a dearth of quality educational institutes that provide education in diverse fields with a focus on employability,” says Shivani Bhasin Sachdeva, CEO of private equity fund India Alternatives, which has invested Rs 28 crore in animation training company Frameboxx and Indian Institute of Financial Management.
“Education is a sector that is still in the throes of the Licence Raj"— Gopal Jain, Managing Partner, Gaja Capital
Every year, nearly 20 million youngsters join the workforce. But, according to a 2005 report by McKinsey, only 25% engineers, 15% finance graduates and less than 10% of the other graduates in India are employable; more recent studies by Aspiring Minds offer even more dismal figures. While that’s bad news for the nation, investors see it as an opportunity to catch a rising tide — they’re placing their bets on firms like NIIT, Indian Institute of Job Training, English Helper and Teamlease, which help in skills upgradation. The scalability in this business, however, will depend on how many students become employable after doing the course. “To scale up vocational institutes, you have to provide students with jobs. If there are no jobs, the business is unlikely to scale,” says Kapoor of Matrix.
For investors, the education sector, despite the many hurdles, is too big an opportunity to ignore completely. They continue to take bets on entrepreneurs and business models that have managed to scale up (See: Pick and choose
). Some have even managed to get pretty decent returns. Gaja Capital made a 20x return on its investment in Educomp; Helix made a 2.5x return on MT Educare and UTI Ventures made a killing with a 50x return on its Excelsoft investment. Still, there’s too much money chasing too few companies, so the price to buy into the sector is climbing rapidly and companies are getting valuations they would not get in any other sector. For instance, preschool chain Tree House clocked revenue of Rs 77 crore and a profit of Rs 22 crore in FY12. While it’s remaining profitable by not investing in real estate (see story on page 76), the stock doesn’t come cheap, trading at a valuation of 31 times its FY12 earnings. The challenge for such companies will be to maintain profitability as they scale up operations. “Private equity investments in education have driven up valuations tremendously and in some cases, unjustifiably,” says India Alternatives’ Sachdeva. “In some cases, private equity investments in smaller and unlisted companies are happening at valuations higher than what the market is paying for larger listed competitors.” But, as long as capacity trails demand in the sector, good businesses will continue to demand top dollar. What is needed to kickstart the education sector is partial deregulation, suggest some PE players — regulated prices, but guaranteed returns. But even that seems to be some time away. So it will be a while before investors can truly reap the rewards of an educated population.
MUMBAI/BANGALORE: The attraction and retention of talent has become such a business critical operation that even small and medium firms (SMEs) and family-run enterprises are today outsourcing their HR functions to third party providers so that they can focus on their core businesses.
Rituparna Chakraborty, vice president of the Indian Staffing Federation, says the trend is catching on in a big way. The small firms, which are experts in their core businesses, often find themselves struggling around human resource management. "With rising competition and the need for professionalism, many family-run businesses are understanding the significance of hiring the right people, managing them better, making them more productive and becoming compliant to their requirements. So they seek professional intervention from HR outsourcing organizations to bring in experience, systems, processes and technology," she says.
Mumbai-based Gemini Power Hydraulics is a family-run SME that has outsourced its HR. "Attracting quality talent is a huge challenge for family-run businesses," says Rajiv Sethi, chairman of the company. Most professionals, he says, do not want to work with such companies because they are often known for poor HR practices, be it lack of proper structure, role definition or career progression plans. "Outsourcing HR functions to professionals helps in this context," he says.
HR outsourcing provider HR Anexi today has dozens of consultants working out of SME client premises. "HR outsourcing was seen largely from the payroll perspective but now it is about performance management," says Ashish Arora, MD of HR Anexi.
What makes managing HR even more complicated for small organizations today is that the HR function today is no longer a uniform one, but comprises of specialty areas such as talent acquisition, talent engagement, performance management and compensation.
"The size of our organization does not financially justify employing a whole host of HR executives with individual specializations. So we outsourced our HR and that has enabled us to improve the efficiency of our in-house HR team," says Makrand Appalwar, MD of Emmbi Polyarns, a woven sack manufacturer that has grown in size rapidly. The fast growth necessitated a more structured and managed organization. "By outsourcing HR, we could get immense help, support and hands-on experience from senior HR executives," Appalwar says.
E Balaji, CEO of staffing firm Randstad India, says that in traditional small and family-run businesses, the owner dons the role of a CEO and manages most functions, including HR. "Today their businesses are highly volatile, hence they have started looking at outsourcing business support functions. In HR, this is particularly true of recruitment. They also seek help in areas like performance management, compensation & rewards and HR policies," he says.
Navin Kumar, CEO of Bangalore-based skills development firm iPrimed Education Solutions, says HR outsourcing can help provide seasoned resources (sometimes in a shared mode) to smaller companies especially in the areas of HR operations management, recruitment, non-sensitive areas of performance management, mobility and visa solutions.