A recent report indicates that a significant portion of the Indian workforce is currently employed in jobs that don't fully utilize their skills and qualifications. The "Skills for the Future: Transforming India's Workforce Landscape" report by the Institute for Competitiveness reveals that a staggering 88% of the workforce is engaged in low-competency occupations. This suggests a deep-seated issue of underemployment and a mismatch between the skills possessed by workers and the requirements of their jobs.
The report, utilizing data from the Periodic Labour Force Survey from 2017-18 to 2023-24, highlights that over half of India's graduates are employed in roles typically held by individuals with lower skill levels. Specifically, only a small fraction, 8.25%, of graduates are in jobs that align with their educational qualifications (Educational Skill Level 3), while over 50% are in lower-skill jobs. This underutilization of skilled professionals is further emphasized by the fact that 28.12% of postgraduates are working in mid-skill occupations.
Several factors contribute to this skills gap and underemployment. The report points to low educational attainment and a lack of quality job openings as primary reasons for the mismatch. Only 9.76% of the population has completed education beyond the secondary level, while over 52% remain at or below the primary level. This limited access to higher education and advanced training restricts the pool of qualified candidates for high-skill jobs.
The consequences of this skills mismatch are far-reaching. Individuals in low-competency jobs often earn minimum wages, while those in mid-skill jobs experience modest annual wage growth of 5-6%. In contrast, professionals in high-skill roles can expect 8-12% annual growth, highlighting the economic benefits of moving more workers into high-competency positions. Moreover, the underutilization of skills can lead to decreased job satisfaction, reduced productivity, and hindered economic growth.
Regional disparities further compound the problem. States like Bihar and Uttar Pradesh lag in high-skill job shares, while Union Territories and states like Chandigarh, Puducherry, Goa, and Kerala demonstrate better utilization of skilled professionals. These regional differences suggest that targeted policy interventions are needed to address the specific challenges in each region and promote more equitable access to quality education and employment opportunities.
To address this critical issue, the report recommends a multi-pronged approach. Increased investment in education and skill-building is essential to equip workers with the skills needed for high-demand jobs. Policy changes are needed to incentivize the creation of high-skill roles, particularly in states with limited opportunities. The report also emphasizes the need for a dedicated, standardized data collection system to generate reliable estimates about skill requirements and inform evidence-based reforms and policies. Furthermore, industries should be incentivized to recruit from skill-certified talent pools and take accountability for creating market-aligned training programs, offering higher wages to attract and retain skilled workers.
The mismatch between skills and job requirements not only affects individual workers but also has broader implications for the Indian economy. By addressing the skills gap and promoting the creation of high-competency jobs, India can unlock its full economic potential and ensure a more prosperous future for its workforce. Investing in education, promoting skills development, and fostering collaboration between industry and academia are crucial steps in transforming India's workforce landscape and creating a resilient, future-ready economy.
