Businesses must stay flexible and competitive in a world where things change quickly. One smart way to do this is to put money into training programs that help people learn new skills.

India is experiencing rapid economic growth and technology progress. As a result, it is more important than ever to develop skilled workers. Business leaders who are thinking about starting an internship program need to know the pros and cons in order to make an informed choice. This blog talks about the possible effects, main benefits, and things to think about when starting a program like this in 2024, with a focus on India.

Why Apprenticeships Matter in 2024

Apprenticeships serve as a conduit between academia and industry, allowing young professionals to acquire practical experience and valuable skills. Establishing structured career pathways has never been more pressing than in India, which has the world's largest adolescent population. The government has acknowledged this requirement and has implemented numerous measures to encourage apprenticeship programs using policies and incentives.

India's unemployment rate is approximately 6.3%, with youth unemployment being a substantial obstacle, as the most recent 2024 data indicates. Nevertheless, the Skill India Mission aims to train more than 40 crore individuals by 2025, focusing on apprenticeship-based learning. This initiative presents an ideal opportunity for organizations to capitalize on apprenticeship programs to foster talent and contribute to national development objectives.

Understanding the Costs of Apprenticeship Programs

Before going into the pros, it's essential to consider the cons of starting a training program. Prices may differ depending on the type of business, its size, and the way the program is designed, but they usually include:

Expenditures for Recruitment and Training

• Employing apprentices incurs expenses associated with recruitment, onboarding, and preliminary training. Training expenses may include specialized equipment, materials, trainers, and duration of mentorship.
• The National Apprenticeship Promotion Scheme (NAPS) provides financial assistance to employers by reimbursing 25% of the stipend given to apprentices, capped at ₹1,500 per trainee each month.

Compensation and Stipend Expenses

• Although stipends are less than regular employee salaries, they are nevertheless expensive to apprentices. Sector, region, and apprentice skill level all affect the government-mandated stipend. In India, for instance, apprentices often receive between ₹8,000 and ₹18,000 per month.
• Higher stipends help organizations attract better applicants, improving the caliber of talent available.

Administrative and Compliance Costs

• Monitoring the apprentices' progress, meeting legal and regulatory obligations, and keeping records are all part of running an apprenticeship program. To manage these responsibilities, businesses must budget for administrative personnel or systems.
• Although India has simplified procedures to lessen the regulatory load, specialized resources are still needed for compliance.

The Benefits of Starting an Apprenticeship Program

While there are costs associated with apprenticeship programs, the long-term benefits often outweigh the initial investments. Here are some critical advantages for businesses:

Cost-effective employee training

• Apprentices are a cheaper way to fill entry-level employment than fully trained professionals. NAPS government incentives can also reduce early expenses.
• According to studies, apprenticeship programs save recruitment expenses by 18-20% over five years due to lower turnover.

Ability to adapt to industry and technology changes

• Manufacturing, IT, and healthcare are changing rapidly. Therefore, a flexible workforce is essential. Companies adapt and value apprentices who know the latest tools and technology.
• The Indian IT sector has increased AI, data analytics, and cloud computing apprenticeships to meet demand for tech-savvy workers.

Increased Employee Loyalty and Retention

• Apprentices feel valued and perceive a professional path; therefore, they remain for longer. This improves retention and lowers hiring costs.
• Compared to 64% of non-apprentice hires, 85% of apprentices stay with their training organization after graduation.

Access to skilled labor pipeline

• Apprenticeships provide a consistent stream of talent targeted to your firm. Apprentices learn by doing and can be shaped to fit the company culture and operations, saving time and money.
• Nearly 1.5 lakh apprentices join India's workforce each month, giving employers access to a varied labor pool.

Boost to Employer Brand and Corporate Social Responsibility (CSR)

• An employer supporting apprenticeships can build a reputation for community and skill development. Employer branding can improve, making it easier to attract top people.
• Apprenticeship programs can help businesses meet Indian CSR spending criteria while supporting social objectives.

Challenges to Consider

While obvious advantages exist, establishing an apprenticeship program is challenging. It is vital to be aware of possible obstacles:

• High Initial Setup Costs for Specialised Training
  High Initial Setup Costs for Specialised Training Industries that necessitate highly specialized skills may incur substantial training costs, particularly when new facilities or equipment are required. Nevertheless, the initial investment may be justified by the long-term advantages.
• Time Needed to Develop Skilled Talent
  Apprenticeships necessitate a learning curve, which may require some time before apprentices are productive. This may initially result in decreased productivity when contrasted with the appointment of experienced workers.
• Adherence to Regulatory Requirements
  Although India's apprenticeship regulations are becoming more business-friendly, the legal requirements can still be challenging. To guarantee compliance, organizations must remain informed about the most recent policies.

Latest Indian Statistics for 2024

• Apprenticeship Engagement: In India, more than 5 lakh businesses actively employ apprentices, with over 50% of these businesses operating in the IT and manufacturing sectors.
• Government Support: To increase participation across industries, ₹3,000 crore has been set aside for apprenticeship development in 2024 under the updated NAPS.
• Diversity of Apprentices: Women comprise 32% of India's apprentice workforce, and efforts are underway to increase female representation in STEM sectors.
• Sectoral Growth: With anticipated yearly growth rates of 20–25% over the next five years, the automotive, IT, and retail sectors have had the most significant increases in apprenticeship enrolment.

Final Thoughts: Would You Invest in an Apprenticeship Program?

The findings of the cost-benefit analysis show that starting an apprenticeship program might be a prudent financial move that ultimately pays off. The initial outlay and possible risks may be justified by a skilled and dedicated workforce, reduced hiring costs, and an enhanced employer brand. The government's incentives and evolving regulations make 2024 the ideal year for Indian companies to start apprenticeship programs.

Business executives' decision-making process essentially comprises making sure the apprenticeship program aligns with the organization's long-term growth objective. When businesses invest in apprenticeships with 2COMS, both the economy and businesses benefit. Better worker quality, a competitive edge in talent acquisition, and the fulfillment of CSR commitments are all possible outcomes of apprenticeships with 2COMS.

To learn more about implementing apprenticeship for workforce development, get in touch with us.