Friday, February 3, 2012

Skill Development as Corporate Social Responsibility (CSR): The Example of Maruti-Suzuki

Many shareholders of Maruti Suzuki India Limited (MSIL) recently received a proposal from the company relating to establishment by the company of an Automotive Skill Development Institute (AMDI) with the following objectives: (a) Impart technical training to school pass-outs to make them employable on the shop floor as well as in service workshops; (b) Besides technical training, train the students in proper value systems of work culture and team work; and (c) On successful completion of the course, absorb the students at service networks of the company and also at its manufacturing facilities depending on the manpower requirements. An interesting aspect of the proposal is that the students would be free to join any other organization that could decide to recruit them. Equally interesting is the resolve of the company to treat this project as a Corporate Social Responsibility (CSR) activity. Hopefully, the proposal will receive an overwhelming support from MSIL’s shareholders.

The above proposal is not only novel but is also germane to the Indian society. The Indian society is characterized by significant dropouts after school education. Not all interested in college education are able to move into colleges due to family pressures to earn a living. Certain jobs, for example automobile servicing, product selling, transport services and hospitality services are, in contrast, are not considered suitable avocations by college graduates. Given the peculiar social structure, school pass-outs as well as dropouts, who could not get the necessary educational background, occupy certain jobs which require technical finesse as well as business acumen while the graduates and post-graduates seek predominantly technical supervisory and white collar jobs. Although the Industrial Technical Institutes (ITIs) were set up in the 1950s as a vocational training via media between inadequate school education and higher technical education, there remain a large number of jobs which require a more practical and socially acceptable option. The AMDI model of skill development initiated by MSIL offers a great new option.

Skills at the bottom of the pyramid

Skills of the organization are at the core of business success. MSIL itself has been a striking proof of the proposition. In the 1980s, a major argument of status quo advocates against technological modernization in the Indian automobile industry was that it would be impossible to service a modern vehicle such as Suzuki car in the country which was accustomed only to urban and semi-urban use of cars of dated designs such as Ambassador. Rather than be baulked by such arguments, MSIL pioneered the concept of authorized service stations with factory trained service personnel, with well-stocked spare parts, to ensure that the modern cars are maintained with thorough product knowledge. This has enabled the service and longevity oriented Indian customers to welcome the new car technologies. The MSIL model has since been replicated by other automobile manufacturers, with similar success. Over a period of time, the ability to have such skill based service infrastructure has become an entry barrier too. Dissemination of skills to the bottom of the organizational pyramid is clearly a matter of core competence for organizations.

Skill development need not be limited to service. Ashok Leyland and MRF, the noted commercial vehicle and tyre manufacturers respectively have focused on driver training institutes as a methodology to reduce the shortage of trained drivers and enable better transportation services. Certain engineering giants such as L&T are reported to have set up training institutes to train construction workers in good construction practices. Certain corporate groups have been quick to realize the need for trained front-line customer facing manpower and have established specialized institutions for the purpose. NIS Sparta Education and Learning Technologies Pvt. Ltd., which has started in 1991 as an institute for salesman’s training, has rapidly grown to become Asia's leading training, education and learning solutions provider. It is now a part of the Reliance ADA Group. NIS Sparta today offers training solutions to organizations and employability linked, skill based programs to individuals. More recently, the concept of finishing schools has also come into play to enhance the employability of individuals at various levels, and not merely at workforce and salesman levels.

Unskilled as an archaic concept

While the above sounds good, it is ironic and paradoxical that even large corporations still suffer from the syndrome of unskilled and skilled differentiation as an institutionalized concept in the bottom rungs of the organization. In a new world which seeks equality and dignity of labor, besides perfection and productivity in products and services delivered, the institutionalized concept of unskilled and skilled differentiation is completely archaic and even counterproductive. One has to observe the poor artisans who mold clay into works of art or the indigent masons who provide impeccable finish to buildings to realize that skills are an integral part of any job. There could be arguments that all workmen who undertake predominantly manual labor can be classified as manual labor, and that no trained or educated workman would in fact accept to do such “unskilled” jobs. This again is a specious argument. Even in the so called unskilled categories a level of skill exists. For example, a so called unskilled workman who clears the sludge in a reactor of a bulk drugs company needs to know the right way of removing the sludge besides the material and process safety specifications and the correct sequence of carrying out various activities. As a paradox, whenever a so called unskilled or manual work gets substituted by robots, it is technology at the highest level that replaces such unskilled work!

Organizations have tried to reduce the proportion of the unskilled workforce within the permanent rolls by outsourcing such unskilled jobs to third party service providers. Services such as janitor services, civil construction services or maintenance services come to mind. As an apparent truism, the differences in skill levels of the in-house personnel and contracted personnel tend to be visible, with the former working on jobs that require higher levels of skills and education. Unfortunately, this may perpetuate a system by which such service providers due to their financial and other considerations could perpetuate an “unskilled” environment for their personnel. As a result, progressive organizations are forced to undertake special programs for the contract workforce to enhance the skill levels. Fortunately, most progressive organizations now realize that contracting jobs out has nothing to do with jobs being manual or otherwise but has everything to do with how specialization could enhance the skill level and delivery efficiency regardless of the type of the job outsourced.

Skills as sinews of strength

The visible part of any job hides the need for latent skills. In fact, latent skills serve as the sinews of strength. The job of an airhostess or a flight attendant may appear to be one of receiving the passengers and serving them food with a smile. However, when a crisis confronts, be it a suddenly sick passenger or a flight malfunction latent skills are expected to come forth to save the flight and the passengers. A janitor in the hospital may not be, in the ordinary course of work, expected to know anything more than wiping the floor and other accessories clean. Awareness of the nature of the infectious bugs and microorganisms that affect the human safety and how the job of cleaning has to be performed to protect safety represents the inner skill that is required. Every job, however naturally simple or manually heavy would have its own undertone of skill requirements. Skill development involves anticipating all the ordinary and extraordinary situations that a workman could encounter routinely or sporadically and equip him or her with such skills. It is the robustness of the underlying skills that enables the seemingly most ordinary personnel exceed expectations and avert crises, as the case may be.

Once the premise that every job has its own battery of skills is accepted, it is easy to see how a progression of skills could enable individuals to progress in their careers and achieve self-actualization. Organizations must move away from unskilled-skilled classification which creates increasing pools of disgruntled unskilled workers. On the other hand, organizations must define the jobs from the lowest level upwards in terms of a hierarchy of skills that are required in all natures of operations and business. The reserve skill levels of a job and the innate skill levels of an individual help employees progress from the lower levels of careers to the higher levels. There have been cases in India of individuals becoming entrepreneurs from what were seen to be ordinary avocations, be it product distribution, product selling, household plumbing or restaurant food-making. Only when individuals recognize the skill-sets as innate sinews of strength can such career progression be possible.

Developing skills

One’s skill-sets come from a combination of inputs; comprising formal and informal education at school and/or college levels, vocational and skill development institutions, and on-the job training. However, all these inputs can go only as far as the individuals are capable, eager and motivated to absorb skills. Particularly, skills come from keen observation, sustained practice and perfection for quality. Preparing the individual’s mind to the challenges of skill development through practice requires behavioral coaching. A willingness to work with hands and without inhibitions of blue collar work are the other two essential requirements. Unlike broader education, skill development in any vocation requires certain specific preferences and aptitudes on the part of the individuals. The challenge of skill development is one of customized practice and selection.

It is fascinating to watch and conceptualize how skill development takes place in a practical setting. Received skills, observed skills and practiced skills combine to form a progressively enhancing skill-set. Continuing practice remains the key however. It is in this context that specialized skill development institutes such as AMDI with openness to allow the products of the institute to join other companies is a welcome initiative. If leading companies in all other industries reinforce the initiative by setting up similar skill development institutes, the Indian economy would be the best in the world. Skill development cannot be an end in itself. At appropriate stages, it should be possible to supplement the skill epitomes with higher education, so that individuals can graduate from operational excellence to strategic exposure.

Skill development as a corporate social responsibility

Skill development on the lines envisaged by MSIL AMDI is an enlightened move to expand the talent base of the country while ensuring a somewhat captive skill base for the sponsoring firm. That said, the format offers enormous scope to provide education to indigent sections of the society in partnership with government and non-government organizations. NIS Sparta has partnered with the government in that direction, for example. Ministry of Rural Development’s (MoRD) Special Projects for Placement Linked Skill Development of Rural Below Poverty Line (BPL) Youth under Swarnjayanti Gram Swarozgar Yojana (SGSY), is designed to equip the unemployed rural youth from the BPL Households with marketable skills, with an objective to ensure a time-bound training and capacity building programme for bringing a specific number of Rural BPL families above the poverty line through placement ensuring regular wage employment.

Without specialized skill development institutions like NIS Sparta such social uplift through skill development would not be possible with optimal efficacy. When education-for-fee institutions such as NIS Sparta are able and willing to participate in such CSR programs, industry sponsored institutes can be even more effective. The new Companies Bill requires that public corporations spend at least 5 percent of their net profits on activities of corporate social responsibility. It also requires that the Board of a company is obligated to explain the reasons if the company is not able to invest in CSR. The skill development initiatives outlined herein provide a perfect vehicle with appropriate business and social rationale to fulfill the mandate voluntarily. It is hoped that all corporations would be able to follow Maruti-Suzuki example, and create a multiplier effect in the economy.

Posted by Dr CB Rao on February 2, 2012


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