B 1 management strategies in paint industry - by dilip chenoy

For Private Circulation only

"Management Strategies in Paint Industry, HR in the changed scenario of workforce

availability, Talent Pool creation both within and outside the company :

Structured approach for sustained Growth“25th Indian Paint Conference29 January 2011 : Surajkund

Dilip ChenoyMD & CEO

2Proprietary and confidential. This information does not represent and should not be construed as, legal or professional advice. © 2011 NSDC. All Rights Reserved.

The Skills and Competitiveness Challenge

New approaches to address the gap

What the paint industry could do to lead change

Agenda


Agenda

The Skills and Competitiveness Challenge


Background -1

• India is poised for double digit growth

• Essential pre-requisite - Availability of skilled work force• 12.8 million youth enter the job market every year but current

capacity of Vocational Training is around 4.3 million annually.• 93% of Indian workforce is employed in the unorganized sector

who largely remain untouched by formal training

• Percentage of Work force who receive formal skill training India UK Germany Japan Korea 2% 68% 75% 80% 96%


Background – 2 The changing nature of the paint industry

1. Indian Paint industry has to grow 20 – 30 times if per capita consumption reaches global per capita average consumption

2. The ratio of decorative paints vs industrial paints is expected to change in India

3. The way decorative paint is being sold and used is changing

4. Expectation of influencers increasing

5. The business process in the industrial segment may change : Outsourcing is increasing – on line delivery of finished product

6. The after market is becoming significantly large and changing

7. Environment concerns are reshaping industry and providing an opportunity for new product diversification and growth

8. Skill sets required by people across the value chain changing rapidly


..yet the twin challenges of employability and availability

Employability of the skilled a challenge

Only one in four engineering graduates in India Is employable, based on their technical skills, English fluency, teamwork and presentation skills and of the 400000 oddEngineering graduates, who graduate each year, only about 20% is good enough for India Inc. - NASSCOM

The crux of the labour problem – the poor employability of many young people –is reflected in the paradox of high unemployment coupled with high unemployment coupled with labour shortageslabour shortages. Despite the ostensibly favourable demographic trends, companies complain of companies complain of difficulties recruiting and retaining difficulties recruiting and retaining qualified staff,qualified staff, whether civil engineers and software developers or bricklayers, waiters and shop assistants. “We don’t have people to build bridges. We don’t have people to build high-quality buildings. We are bringing in architects and engineers from overseas,” Saurav Adhikari HCL

Availability of the skilled a challenge

Financial Times October 6 2010

SMEs are hardest hit by this


The Skills and Competitiveness Challenge 1


The Skills and Competitiveness Challenge 2


….the issue is more acute outside the company


...further there is a huge Incremental human resource requirementthis is creating an unprecedented war for talent !

Source: IMaCS analysis for NSDC

Industry Incremental

requirement

(in million)

Building and Construction Industry 33.0

Real Estate Services 14.0

Gems and Jewellery 4.6

Leather and Leather Goods 4.6

Organised Retail 17.3

Textiles and Clothing 26.2

Electronics and IT Hardware 3.3

Auto and Auto Components 35.0

IT and ITES 5.3

Banking, Financial Services, and

Insurance

4.2

Furniture and Furnishings 3.4

Industry Incremental

requirement

(in million)

Tourism and Hospitality services 3.6

Construction Material and Building

Hardware

1.4

Chemicals and Pharmaceuticals 1.9

Food Processing 9.3

Healthcare 12.7

Transportation and Logistics 17.7

Media and Entertainment 3.0

Education and Skill Development

Services

5.8

Select informal employment sectors (domestic help, beauticians, security guards)

37.6

Incremental 244


Interestingly vocational skills required in large numbers

Sector Skills/QualificationYearly requirement

in 00,000

Building, Construction & Real Estate Services Minimally Educated 27.17

Health Care and Service Industry Nurses 6.59

Organised Retail Food and Grocery 6.26

Auto and Automotive Sector Drivers 3.62

Food and Processing Sector Bread & Bakery 3.22

Transportation, Logistics, Warehousing and Packaging Warehouse Workers 3.17

Banking and Financial Service Sector Sales & Marketing 2.35

Organised RetailConsumer Durables, Home Appliances 1.99

Media and Entertainment Industry Television & Films 1.95

Textile Industry Sericulture 1.64

Furniture and FurnishingStitching, Sewing, Stuffing, Threading 1.53

Education and Skill Development SectorTeachers in School Education 1.49

Furniture and Furnishing Carpenters 1.35

Leather and Leather Goods Industry Flaying and Curing 1.33

Food and Processing Sector Meat & Poultry Processing 1.3

Over 13 million

people required

incrementally every year

in over 90 categories

of skills

12Proprietary and confidential. This information does not represent and should not be construed as, legal or professional advice. © 2011 NSDC. All Rights Reserved. 12

… and the need for huge capacity addition to meet future demand

Privately owned ITCs

*Includes ministry of housing and urban poverty alleviation, textile, health and family welfare, food processing industries, and others**Assuming that the existing workforce in the age group of 45-59 will not be re-skilled***Assuming training fee of Rs 2000 per student for the total demand estimated

Source: 11th five year plan; NCEUS report; McKinsey analysis

Current capacity in skill development under various schemes, 2008-09

Eight-fold increase in capacity is required to meet aspiration

1.8

0.8

Total capacity inskill development 4.3+

Other privatetraining providers

XX

Other ministries* 0.3

MSME 0.2

Ministry of rural development

0.2

Ministry of agriculture 0.2

Ministry of women &child development

0.2

MHRD

MLE 1.30.5

Total demand by 2022 526

Reduction due toageing/ retirement**

80

Reskilling / up skillingof 90% of existingworkforce (460 million)

414

Addition to workforce@ 12.8 million per year

192

Total supply by 2022 @ current capacity

65+

8x

Business opportunity of ~ 22 Billion $ *** Business opportunity of ~ 22 Billion $ ***


Current quantity, quality and qualification mismatch

Training Delivery Certification and Assessment Job MarketsFinancing

Entrepreneurship / IndustryBanks

Government

Industry

Students

Adapted from a presentation made by Nimesh Mehta at ISB

Below the line requirements not met by above the line

In house / captive training

Youth

SME’s find it uneconomical to do this


What are the talent pain points of your industry ?

• Shortage of talent with right competencies• Having to invest resources in new hire & training• Lack of industry standards to align –competencies, curriculum• Lack of industry driven accreditation, certification• Competition for talent within industry• Competition for talent with other industry segments• Lack of in service training capability in MSME (2000 + units)• Lack of research on labour market and best practices• Lack of trainers • Non-alignment with training organisations which do 95% of skill training• Passive involvement of industry in the shaping of policies to boost

productivity, thereby improving company competitiveness and individual employability.

• Training people on changing environment, techology, customer service, business needs


Challenges of Skills Training in decorative paint sector

• Workers are seasonal, migrant and itinerant.• Place of work, project and their employers, all keep changing.• No LMIS in place, no mechanism for supply –demand tracking• 90% of workers are up to 5th fail.• Most cannot sacrifice their earning for attending training.• Infrastructural investment for training workers in paint sector is

huge, being done at individual level. Needs to have synergy / standardized

• Standard mechanism, certification, accreditation and career pathing for skills training in paint industry non existent

• Awareness level for need and benefits of training lacking at both employer and worker level.


Human resources in a changing environment

•Technological change

•Work practice change

•Environmental change

•Regulatory change

•Competitive pressures change


Can Industry work together to ensure :


Agenda

New approaches to address the gap


Social Appreciation of Skills As a Livelihood Asset

Linking Education to Employability in the Global Knowledge Economy.

No One Solution. Every Region demands an innovative approach.

1. Undertake fundamental reforms across the education system (primary, secondary and higher) to

• improve overall quality / outcomes,

• increase retention and

• ensure seamless integration with vocational training

2. Significantly enhance Government-driven vocational training efforts

3. Increase scale of PPP initiatives to better utilize Government infrastructure

FOCUS AREA FOR NSDC


Prime Minister’s National Council for Skill Development

National Skill Development Co-ordination Board

Government Initiatives

17 Central Ministries

Private sector initiatives

NSDC created as a part of the government’s co-ordinated action in the skills space

NSDC structure

NSDC is a Public Private Partnership created by the Ministry of Finance•51% stake by industry •49% stake by GOI

Initial funding of $ 220 Million received from the GOI and parked with the NSDF for use of NSDC

Target skilling / up skilling 150 million people by 2022 by fostering private sector

participation


Proactively catalyze creation of large, quality vocational training institutions

Proactively catalyze creation of large, quality vocational training institutions

CreateCreate

Reduce risk by providing patient capital

Improve returns by providing viability gap funding

Reduce risk by providing patient capital

Improve returns by providing viability gap funding

FundFund

Support systems required for skill development•Sector skill councils•Quality Assurance•Information system•Train-the-trainer•Set Standards

Support systems required for skill development•Sector skill councils•Quality Assurance•Information system•Train-the-trainer•Set Standards

EnableEnable

Create the vision and help define the path

Create the vision and help define the path

Demonstrate commitment to

the purpose

Demonstrate commitment to

the purpose

Create a viable ecosystem

Create a viable ecosystem

Investor Servicing

NSDC to achieve mandate through three key pillars


Private sector response : Status

Proposals Number Funding

Requirement (Rs Cr)

Disbursement till date (Rs Cr)

People Trained in

Year 1 (Mn)

People Trained over a Period of

10 Years (Mn)

Training Capacity per Annum (Mn)

Proposal Name

Approved & Funded 10 160.85 40.19 0.10 7.71 1.31

IIGJJ, B Able, Gram Tarang, iSkill, IAHV, Edubridge, Empower, Pratham, Gras, iStar

Approved by Board 12 446.71 0.39 30.88 6.43

Centum, IL&FS, ASDC, CREDAI, MERC, IISD, TMI, Globsyn, Everonn, JobCorp, IIJT (TeamLease) Talent Sprint

Total 22 607.56 40.19 0.49 38.59 7.74


State-wise District-wise Spread of Centers by 2012*

States Districts Covered

AP 23 23

Arunachal 16 1

Assam 27 1

Bihar 38 7

Chattisgarh 18 4

Delhi 9 5

Haryana 21 10

HP 12 11

GOA 2 1

Gujarat 26 20

J&K 22 1

Jharkhand 24 8

Karnataka 30 17

Kerala 14 3

MP 50 22

Maharashtra 35 31

Manipur 9 1

Meghayala 7 1

Total

States Districts Covered

Mizoram 8 1

Nagaland 11 1

Orissa 30 17

Pondichery 4 1

Punjab 20 16

Rajasthan 33 15

Sikkim 4 1

TN 32 22

Tripura 4 1

UP 71 32

Uttr 13 8

WB 18 11

Andaman 13 6

Chandigarh 1 1

Dadra 1 0

Daman&Diu 2 0

Lakshdweep 1 0

Total 639 300

Districts that would be covered in the next ten years by 14 of the 22 proposals


17 of the 20 priority sectors already impacted within approved and funded proposals

Note : Sectors not covered include,, Furniture &Furnishings, Education, Transportation &Logistics


Quality :NSDC is mandated under the National Skill Development Policy 2009, to constitute Sector Skill Councils


Quality : Current Status of SSCs by Industry Sectors

23 SSCs at various stages of Formation23 SSCs at various stages of Formation

Paint Industry ?


Qualification : An alternate educational system

School Dropouts

10th Pass / ITI

DiplomaAdvanced

Specialization

Professional Degree

Job RoleApprentice

WelderLevel I Welder 3G Welder 6G TIG Supervisor

Employment Opportunity

Corner Welding Shops, SME

Manufacturing Sector

Manufacturing Sector, PSUs

Specialized Industry

Manufacturing Sector, PSUs

Starting Monthly

Income (INR)2,000 – 3,000 3,500 – 4,500 6,000 10,000 10,000

Monthly Income after 5

Years (INR)5,000 – 6,000 6,000 – 8,000

12,000 – 14,000

50,00020,000 – 25,000


Proposed Ecosystem to align the 3Q’s with employment

Banks

Training Delivery Certification and Assessment Job MarketsFinancing

Government

Entrepreneurship / Industry Industry

Students

Adapted From a presentation made by Nimesh Mehta at ISB

Sector Skills Councils NVEQF

Youth


Agenda

What the paint industry could do to lead change


National Skills Policy 2009 : Roles and Responsibility of Industry

1. Identification of competencies and setting up of competency standards

2. Skill demand analysis and curriculum development

3. Facilitating training of trainers

4. Delivery of training, monitoring and evaluation

5. Participation in examination and certification

6. Participation in affiliation and accreditation process

7. Sharing of work place experience, machinery and equipment

8. Support by way of physical, financial and human resources

9. Facilitating employment of trained persons

10. Owning skill development activities


What companies could do to lead change

• Set up collaborative skill development centres • Partner NSDC

• Support existing and future skill development initiatives• Demand ready to work persons• Agree for payment of placement fees• Introduce a Employee Skill Opportunity Programme

– Encourage employees to act as trainers, assessors– Reward life long leaning– Refund training fees to encourage retention– Support participation in the Sector Skills Councils

• Reach out to the skill development centres with your requirements

• Lead setting up of Sector skills Councils


Leadership in creating a sustainable learning environment

• Advocacy– Promote a new industry – Skills Training

– Partner to encourage scale; move to sustainable models

• Supporting the skills initiative – Setting up Sector Skills Councils

– Bring partners, world class content and practices to India.

– Assist in building a new eco system : Trainers, Assessors, information systems,

– Insist on certified employees,

– Promote internships ,placement, funding – fee & loan repayment

– Introduce an awards for painters and a version of Master Chef India for painters !


Opportunity through defining Life long learning paths

Resident Manager

Housekeeper 2

Housekeeper 1

Domestic help cleaner

HousekeeperHousekeeper

Resident Ayah

Baby care

Childcare worker 2

Childcare worker 1

ChildcareChildcare

Palliative care worker

Infirm Eldercare

Eldercare worker 2

Eldercare worker 1

EldercareEldercare

Chef

Cook assistant 2

Cook assistant 1

Kitchen helper

CookCook

Candidate registration

Domestic worker orientation course

BASIC LITERACY

Lev

els

of

Pro

gre

ssio

n

Lev

el 1

Lev

el 2

aL

evel

2b

Lev

el 3


34

NVEQF with industry inputs on qualifications and certifications will facilitate employability after skilling


35

Pathways for Qualifications proposed in NVEQF


Support of industry players, industry body and other stakeholders


Workforce planning an example

• CPSISC is in the process of preparing a Workforce Development Strategy to support those industries within our coverage. As part of this process we have prepared a ‘Green Paper’ for distribution to industry stakeholders.

• This paper is not policy; it is for consultation with stakeholders. We want you to read the Green Paper and tell us if you think we are asking the right questions, via a feedback survey.

• This feedback will be further informed by the results of data received through a Workforce Intelligence Survey.

• The information gathered by these two surveys will be used in the development of a final ‘White Paper’.

• We ask you to do three things to further this process: • 1. Download CPSISC's Workforce Development Strategy here.

2. Once you have read the Green Paper, complete the feedback survey: Click here to take survey 3. Complete the Workforce Intelligence Survey: Click here to take survey

• When our Workforce Development Strategy is finalised, it will be posted on our website; all survey respondents will also be notified of its availability by email.

•


Workforce planning

• the demand for future skills and what planning for the future entails;

• improving the value from the skills investments being made in the existing and future workforce, through greater attention to how skills are used in a workplace setting;

• joining up separate areas of government action on workforce participation, social inclusion and innovation, so that policies on skills connect with wider economic, employment and social strategies.


Workforce planning


Partnering with NSDC


Select case study – IIGJJ

• Rs 5.38 Cr, 50% Grant and 50% Debt at 6%• 1 centre at SEZ in Jaipur• No of people trained in 10 years – 18000• Capacity created per annum – 2000

DescriptionElements

Deal value and size

Business model

Progress till date

• Collaboration between state, industry and NSDC; ;land provided by state

• Targeted to train craftsmen for high end gems and jewelry design through adequate investment in R&D

• Targeted to train people in the full value chain of gems and jewelry design with focus on quality management

• ~ 100 students already enrolled


India would have one of the largest working population

7.1

5

14.7

12.3

13.2

16.9

11.4

8.3

18.7

22.7

21.1

14.8

21.4

5.26

.9

21.5 2

9.2

27.4

China Korea Thailand India Europe NorthAmerica

2000 2025 (Projected 2050 (Projected)

India’s Biggest Advantage: One of the youngest populations in the world

Percentage of population aged 65 and older

Source: United Nations, 2008


"The future depends on what you do today."

— Mahatma Gandhi

[email protected]


NSDC : Ecosystem Interventions

• Sector Skills Councils– Standards– Accreditation of training providers– Assessments– Certification

• Loans for vocational courses– Banks– Micro Finance Institutions (MFI’s)

• Qualifications framework– Career pathways– Lifelong learning

• Train the trainer– New trainers – Refresher courses for trainers

• Labour market information systems

B 1 management strategies in paint industry - by dilip chenoy

Documents

construction industry

service industry nurses

textile industry sericulture

leather goods industry

financial services

unorganized sector

vocational skills

organised retail food