India’s finance industry shows a high need for finance specialists

SkillingIndia on December 10, 2012 Comments
Ambarish Datta, the MD & CEO of BSE Institute Ltd. in a dialogue with… Excerpts of the interview:

“There is a high need for specialists finance professionals in the micro finance industry,”
avers Ambarish Datta, MD & CEO of BSE Institute.

SkillingIndia: What are the positives and negatives of India’s manpower?

Ambarish Datta: Firstly, we will become the youngest nation in the next 7-8 years, which is a positive point for India. It means that we will have a huge number of skilled people available to run the business operations in our country. Secondly, our societal structures are such which encourage school and college graduates to work in the industry as they come with the right amount of parental support, emotional support, and the likes. On the other hand, there’s a huge disconnect between what the industry wants and what the colleges/institutions produce. The difference is the skill gap. While we graduate millions of people every year, most of them are unemployable, as the industry wants skilled people. That’s the biggest disconnect.

SkillingIndia: Isn’t industry-academia partnerships on education programs, apprenticeships, pre-training provided to freshers by the corporates helping? What’s your view?

Ambarish Datta: Yes, it is certainly helping, but it’s the beginning. It’s starting to bridge the gap. You bring the industry closer to academia and vice versa. But, the need is so high, it won’t be good enough. Just by providing people to the industry won’t help. So, what probably is required is much more integration. For example, corporates should develop programs in addition to what colleges are doing, mentor those programs, do lot of train the trainers sessions with college authorities, and faculty development programs. Encourage managers to go back to academia for sabbaticals and apply. Academia must allow working professionals to do extensive research. For example, I was in BITS Pilani and saw that they have a workplace Ph.D. which allows people to continue in the job and also acquire a Ph.D. These products should be encouraged. I think there’s a phenomenal amount of knowledge available in the industry. But, there’s also a need for foundation knowledge of the university, which needs to be captured. The trick is how do you balance both? It needs a much deeper engagement than by doing little bit of things.

SkillingIndia: What do you suggest can be done?

Ambarish Datta: First and foremost the industry should to take steps to design courses for academia which are market driven and market aligned, which are based on the organizational needs and help colleges or academia to deliver them. That’s very important. Current programs that are running should embed industry practices. For example, BSE Institute runs Global Financial Market Professional Program, which is a skill program for college undergraduates. We are facing the same issue; college grads like B.Com, B.A, are not skilled enough to work in the financial markets. So, we thought can we design a course that is industry defined and concurrent to the college education and graduates too, will become skilled enough to get jobs. It is good as the organization gets a skilled person from Day 1 and the student gets a job and it bridges that skill. We have designed a two year part time course, where students come to the institute three times for two hours either before or after college. One semester is exclusively for industry practice, which is whatever they have learnt they have to necessarily practice in the industry. It’s a part of the internship. If they don’t do the internship they don’t get a certificate. Every student is introduced to a potential internship opportunity. We believe that classroom learning alone is not good enough, but practical experience is also important to be eligible to get a job. Once they do the internship they are ready for placements. So, we encourage a blend of theoretical and practical learning.

Few more things that the industry can do…for example, share data like real time challenges. For instance, a retail company can share ‘what are the real issues the store is facing?’ Ask students to face a real issue rather than an academic issue like if you have shoplifting in the store, create a case study, get students to come to the store, analyze the issue and encourage them to come up with the solutions. These kinds of things don’t happen so typically we don’t explore them. We don’t look at these kinds of workplace projects. If we do that and integrate this, for a student it’s a great way of learning. It should also encourage the colleges to give credits for it. For example, if a student is studying B.Com and he goes for these extracurricular activities, he might get marked absent in his college for not attending class. If they have completed such projects then colleges should give adequate credits for that. It will encourage people to take up these kinds of projects. These are small little things, but, very important.

SkillingIndia: You are saying that industry-academia need to partner more to build more skill aligned programs, but is the academia open to it?

Ambarish Datta: If you ask me a few years back they weren’t open to it but, academia is now realizing that there is a growing disconnect between what they are teaching and what the industry wants. Now they are relatively open. But, being open is not good enough. The trick is can as an industry they can add value? At BSE you learn in exchanges. You learn where the action is. As a part of our learning initiatives we set up simulation labs in colleges where we allow people to trade, get an experience of stock exchanges. So, do we see a sense of acceptance? Yes, we do. We find colleges very open to it. Also, I interact with lots of academia professors and they are more than open now. If you can add value, if you are having the right solution then they are more than happy. Of course, there will be some who may not be open to it, but it’s a small percentage.

SkillingIndia: Are we getting the industry-academia partnership on every skill required in every sector? To what extent have we reached?

Ambarish Datta: We have just reached the tip of the iceberg, it’s not happening in all sectors. But, there are some positive things happening like ITIs have been up for privatization like Maruti has taken 50 ITIs. So, small things are happening and they are making a difference. But, it’s a long way to go and it’s not happening the way it should be. Probably the fault lies more with the industry rather than the academia. It’s the industry who needs skilled people, not the academics. So, the first step should be taken by the industry, by being proactive, by going out, by interfacing more, to create real time data, allowing internship options, and allowing reverse mentorship – allowing your workplace managers to go back to colleges to train the trainers. So, it’s a long way to go.

One of the challenges today in skill development is the lack of faculties. The question is how will you train 80 million people? If you ask Dilip Chenoy from NSDC, he says, “First give me faculties/trainers so that I can execute”. The answer is they will come from the industry. People who do the job are the ones who can teach. They need to reach out to the industry in all the sectors. For example, I work for a corporate and have a goal and objective sheet; organizations can give credit points during annual appraisals for the amount of time spent on teaching college kids. If you give employees points for CSR activities then why not add points for skilling people? That will motivate people to take up this activity as their life cycle and encourage them to go back to academia and execute it. There’s no point blaming the regulatory system. People know that AICTE etc have their own challenges and curriculum will take ages to develop and that’s how the rest of the world moves. Except the few top of the class universities and colleges, others struggle to keep up with the curriculum, which the industry needs. We have to work beyond it and we can’t keep blaming it time and again.

SkillingIndia: The curriculum also keeps changing, skills of today become redundant after sometime and then again you re-skill yourself…How do you process the curriculum as by the time you learn something, something new comes up?

Ambarish Datta: There are two-three ways of going about it. Firstly, in India curriculum changes do happen, but they happen at a very slow pace. For example, the engineering curriculum in India has not changed in the last 40 years. You will be surprised, a professor who taught electronics engineering 40 years back he is teaching the same slides right back in college even today. There’s no change in the curriculum. So, how do you keep pace with it? For example, in one of our programs, the last semester is a dynamic one where we actually bring in new technologies and new products which are taught in the last semester, so when they graduate they get skilled for the latest. They are not learning something which is stale. Learning is perishable like everything so you need to teach what is required tomorrow.

SkillingIndia: What are the current hiring trends in the financial sector?

Ambarish Datta: The financial sector at this point is going through a bit of a stress primarily because of the regulatory and market changes. What we see from the skill side, it currently employs about four and a half million people and needs about eight million people in the next 10 years.

There needs to be sufficient training programs built adequately that will ensure that skilled people are available for the market in the next few years. Sector skill councils in alliance with NSDC are focused exactly on developing those skills. We are building a sector skill council with CII and NSE and our objective is to do the accreditation part and make sure that the sector skill council owners develop the skills as we go ahead.

SkillingIndia: So, what is the priority of the sector skill council?

Ambarish Datta: Interestingly, in skill deficit the biggest challenge is to figure out where are the skill deficits. Everyone knows the figure 80 million, but which are the skills that are immediately required. There is no relevant primary data there, so what NSDC is doing is encouraging partners like us to do what is known as labour market intelligent research/survey. We have the grant from the government. The first thing is to do is labour market survey wherein you go back to the industry and that’s why sector skill council has members from all the industry constituents: banks, insurance companies, private banks, regulators, associations and others. We actually go back to them and ask them about: What skills do you require? This is a very long process and shall take 35 months to execute. It’s a three year project where we will figure out what are the skills, how many are required, which are the skills that will become redundant, and then create a skill matrix and start training. First, is to look at how many people and where we want them. This will throw up a lot of interesting things. For example, there could be a skill shortage demographically, for example, you may suddenly realize that you may need a lot of skilled people in Pune, but skilled people are available in Indore. Would that lead to migration? It may not…there can be imbalances due to this. You might find that available jobs are in one place and available skills are in another place. For example, the Mumbai Jewellery making units has all the jewellery ‘karigars’ from West Bengal. I would say let skilled people come from some other States too. Where there is a huge migration, it can lead to a lot of imbalances, which leads to rising costs. People won’t migrate at the same costs. They need costs to survive themselves and for other things. When you do skills assessment you need to analyze first whether I can develop local skills first.

SkillingIndia: Companies have start ups at different places….

Ambarish Datta: Yes, many software development centers of companies are set up in Pune, Chandigarh, etc. in India. Also, if you look at Silicon Valley lot of software start ups are there because it has a huge supply of people. I have met the Mayor of Ontario, Canada. She is from a town called Victoria which is ranked No.2 for entrepreneurship in the world. It’s a small city having 1.4 million people. But, Victoria houses companies like Blackberry, Lexis car maker, and it has world’s 2nd largest rank for encouraging entrepreneurship and innovation. How does it happen? It happens because every year 60,000 people graduate from college. They have an eco system that encourages huge amount of entrepreneurship and innovation to develop. The city mayor is so proud to enable so many skilled people to run those companies. In fact, if you look at research in motion experience in the county they have done tremendous amount of social work to develop skills to encourage innovation, and to bring them to the mainstream. This is another initiative to help them grow up.

SkillingIndia: How attractive and rewarding is the capital market career?

Ambarish Datta: Capital market is extremely focused. The financial market is extremely rewarding. Many top companies in terms of size and value are in the financial market. It also attracts high potential candidates. In fact, you will find top performers from other streams usually graduating in finance. I think it’s an exciting space to be in. But, again like any other industry it has its own swings, but it’s a good place to be in. It needs good freshers who are skilled in decision making, possess the ability to analyze data, etc, but it’s an industry which allows people to have a fast career growth. The financial market also encourages a lot of entrepreneurship. You can become a financial consultant with almost no capital. Very few industries can allow that kind of scope and size. For example, if you open a retail business you need capital, but to become a financial consultant you don’t need any. You can be a small-medium entrepreneur. But, as an industry, it’s very unique and very challenging to work in.

SkillingIndia: When financial pros reach stagnation….

Ambarish Datta: It could be more related to re-skilling oneself, or aligning oneself to the company’s goals. For example, we are working very closely with the institute of chartered accountants to redo their curriculum. They now realize that CAs who eventually become CFOs aren’t handling just finance, but they need to handle capital market activities as well. But, their curriculum doesn’t include those skills. Similar case is with the company secretaries’ institute. Most company secretaries are struggling to handle securities law, listing and exchanges, handling investors, regulators, which are more capital driven than secretaryship itself. We have modules which are embedded in the CS curriculum that allows them to get skilled on these skills as they graduate.

SkillingIndia: Currently, which qualifications and additional skills training enable a person to be competent at a global level in this sector?

Ambarish Datta: There’s no one single certification. It depends on the role, profile which one wants to select. Certification is not just one outcome, it’s a journey – it needs basic qualifications, and core competencies. Certifications enhance the profile of a candidate for a particular job. So, it’s a combination of a lot of things.

The financial sector is one area where regulations and certifications have been in place for a very long time followed by health and quality, safety, fire – these are areas where there have always been certifications. Financial markets have always been regulated by the government whether it’s insurance, or capital market or banking. It’s seen in any country.

SkillingIndia: Are there any specialized skills that will be in demand in the capital market industry in the coming years?

Ambarish Datta: Of course, not just in the technical domain, but even at behavioural level. Things like risk management, which is a big issue now. Lots of financial market experts now need risk managers. Secondly, there are regulatory challenges. Do you have regulatory specialists, compliance executers? There are hundreds of laws a financial company needs to comply with so do you have someone who keeps checking them, raises compliance – these are areas which are extremely critical for running a financial organization. These are areas which need skilled people.

There will be different skills required because of growth, new products being introduced, etc. Those skills will eventually come. For example, we are figuring out that there is a high need for specialists finance professionals in the micro finance industry. Micro finance companies are no less than NBFCs, their asset capital size is so large, but unfortunately they don’t have finance professionals. We are working towards creating something which will address the situation of specialist finance people for the micro finance companies. These are the outcomes of new products and other things we introduced.

SkillingIndia: Anything you would like to add?

Ambarish Datta: The skills space is going to be extremely exciting. It’s not a one man or one organization effort. It will take the entire industry to come together with the government along with others to develop capacities. The fact of life is we must accept that there is a skill deficit. We have to address it now, before it’s too late. One of the biggest strength in the skills space is the fact that we will have a huge number of employable people very soon so much that other countries are going to look here. For example, when I was with the Minister of Finance from Mexico (the 3rd largest country), which is the 3rd largest producer of Shell Gas, told me that they don’t have skilled people. They had 1 million employable people in the market every year and they still need more people. They are growing at 5% (5.5% last year), this year they will be at 4.5%. There will be lot of skilled people moving away from here to those countries – for better quality of life, better salaries, etc., and we will keep losing them. We have to figure out quickly how to fix it. The same is true for Canada.

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