Let students’ feet do the talking: The skill voucher model

This post is the third of a multi-part series about the skill development sector in India and how to solve the challenges of increasing both formal and informal sector employment.

In recent years, funds allocated to skill training programs by India’s central and state government agencies have grown exponentially. While the government’s prioritization of the skill development and training resources is encouraging, enthusiasm is tempered by our country’s persistent focus on the quantity of students trained, rather than the quality of their training.

In my last post, I outlined strategies to improve the supply of quality skill training as part of a three-pronged approach to realizing the goal of 500 million skilled workers by 2022. Market-driven demand will also impact vocational training opportunities for young people.

As noted in an earlier blog, the current, free training model in India leave youth with limited choices, low-quality options and few jobs.  State and central government agencies largely fund these programmes, spending an estimated Rs 20 billion or USD $650 million annually[i], but do not necessarily provide or advocate for quality.

Meanwhile, students know what they want and need but don’t ask for it. They accept what is offered. But what if students expressed their desires in a direct way? What if, instead of quietly sitting on their hands, they move their feet and walk away from lack-luster institutes and poor skills training?

Students who leveraged the voucher model had twice the chance of getting a job compared to their peers.

Skill vouchers: a student-led alternative

Understanding this challenge, the foundation joined the Centre for Civil Society (CCS), the National Skill Development Corporation (NSDC) and BARTI, the government agency in Maharashtra, to assist in the creation of a robust and independent voucher management system.  India’s first skill voucher programme, the Vikalp Voucher model, incentivises students to choose between multiple training providers and courses—paid for using a voucher—rather than receive free, low-quality training from a government-funded provider in a mandated vocational area.

Institutes selected for the pilot all shared positive records; strong performance in placements and certification and reliable infrastructure, including full-time, qualified trainers. Students were invited to learn about Vikalp vouchers at career melas, structured as counseling sessions, and receive invaluable information on career options, courses and training institutes.

Provided students met eligibility criteria, CCS facilitated enrollment at the student-selected institute, payment of the Vikalp Voucher, and payment of each student’s 10 percent contribution to the training. CCS then monitored students’ progress, graduation and employment placement. Institutes funded their vouchers in three outcomes-based installments: upon completion of 10 percent of the course, upon certification and upon job placement.

Even with its challenges, many lessons were learned during the pilot. First, an impact evaluation pinpointed the benefits and risks of scaling up the project. Students who leveraged the voucher model had twice the chance of getting a job compared to their peers. With access to more information and options, students make more thoughtful training decisions. For instance, the pilot proved the significance of career counselling in driving demand for quality skills training.

Throughout the pilot, CCS was mobilising and engaging students for a wide range of courses and vocational institutes, therefore saving up to 50 percent of the costs incurred by singular skill training institutes focused solely on recruiting their own students. This significant finding may lead to shared mobilisation platforms that could be critical to the financial success of skill training providers.

As the central government continues to sharpen its focus on skill development, states and CSRs continue to look for more efficient and effective ways to fund students directly. We believe the Vikalp voucher pilot demonstrates the validity of the model and offers valuable guidance for a successful skill voucher initiative. Our collaboration with CCS introduced a cutting-edge prototype that if scaled, can provide millions of young people the opportunity and choice to build meaningful careers through skill development. We are inspired by the results of the pilot. We are committed to collaborating with other stakeholders to advance this concept so students across our country can take steps toward better futures.

In my next post, I’ll discuss the need for increased funding for students and self-employment opportunities if we want to achieve a positive shift in the skill development sector.


Other blogs in this series:

Skill India: Sector Skills Councils as the bedrock of quality

Skill development for the future

[i] Michael & Susan Dell Foundation estimate (2015)