The Stipends Commanded by Apprentices in Bangalore is 35% Higher than Minimum Wages:Teamlease Reports

The growing demand for skilled talent coupled with revisions in the apprenticeship act seems to be positively impacting the apprenticeship eco-system states TeamLease Skill University Stipend Primer Report. According to the report, the stipend paid to apprentices in Bangalore is 35% higher than the applicable minimum wages. Amongst sectors, Automobile and Allied industries (57%), Manufacturing and Allied Industries (54%), Electronics and Electricals (52%), Tourism and Hospitality (87%), Consumer Goods and Durables (39%), Construction and Real Estate (123%) and Financial Services (61%) are the top paying sector for apprentices in the city.

Further, as per the analysis post graduate and engineering graduates are paid significantly higher stipends than diploma holders in Bangalore. Trade and tech apprentices are paid significantly higher in sectors like Construction and real estate.

Commenting on the analysis, Mr. Sumit Kumar, Vice President, TeamLease Skills University, said “Bengaluru is one of the cities wherein both manufacturing and service industry have been receptive to the concept of apprenticeship, however, owing to the huge variations in the stipend paid by different sectors the median stipend provided in the state is below the national median stipend. We are confident in the coming years this will change. More and more companies now understand the relevance of apprenticeships; hence there will be an increase in demand and adoption. This will lead to a potential increase in the media stipend payouts in the state.”

At national level also as per the analysis the stipends offered to apprentices are higher than the minimum wages. In fact, the median stipend is around 35% higher than the applicable minimum wages in majority of the sectors and cities. Further, as per the study apprentices who are under the Other Employability Schemes (OEES, which comprises programs such as NETAP – National Employability through Apprenticeship Program) received a higher stipend (7.66% higher) than the stipend paid under the Apprenticeship Act.

KEY FINDINGS OF THE SURVEY

* Other Employability Schemes (OEES) pay 7.66% higher than the stipend paid under the Apprentices hip Act
* Market stipends (as per Apprentice Act) are 23% higher for Technical graduates than for non Technical apprentices; OEES stipends are higher for Technical graduates in 6 of the 9 cities covered by the study.
* The apprenticeship market has matured and pays out handsome stipends at a significant premium over minimum wages.
* Top sectors and states (premium paid over minimum wage)
* Top sectors: Construction & Real Estate (125%), IT & ITeS (122%), FMCG (110%), Automotive (82%)
* Top states: Maharashtra (159%), Andhra Pradesh (132%), Tamil Nadu (112%), Gujarat (84%)
* Manufacturing and Services sectors both pay fairly high stipends in the average range of Rs.9,000 – Rs.10,000 per month.
* The Services sector pays marginally higher stipends compared to the Manufacturing sector (median measure)
* The Services sector pays a median stipend 1% (OEES) | vis -a- vis Apprenticeship Act
* The Manufacturing sector pays a median stipend of 1.5% (OEES) | vis-a -v is Apprenticeship Act
* Top 3 Manufacturing sectors: Construction/Building , Automotive & Allied Industries, Electrical & Electronics
* Top 3 Services sectors: Tourism and Hospitality, Banking & Financial Services, Consumer Products / FMCG
* It would be more attractive for candidates to move from the main hub cities to satellite cities / towns (when stipends between the two regions are compared by normalizing with the cost of living index)
* Normalized stipends for most satellite cities / towns are 10% to 47% higher than for their respective main hub cities. Delhi is a lone exception, with lower stipends for satellite cities / towns
* Mumbai versus satellite cities / towns: 10%
* Bangalore versus satellite cities / towns: 47%
* Chennai versus satellite cities / towns: 18%
* Delhi versus satellite cities / towns: - 28%
* Hyderabad versus satellite cities / towns: 31%
* Mysore (35% - 48% higher normalized stipends) and Vijayawada (22% - 27% higher normalized stipends) are the best cities for apprentices to work in, and Noida (38% - 55% lower normalized stipends) and Gurgaon (27% - 33% lower normalized stipends) are the worst, based on the net cost versus benefit (ratio of the normalized stipend and the cost of living index)
* Generic and soft skills in apprentices are a hygiene factor, while domain specific skills are highly sought after. The stipend premium that specialized profiles fetch for domain specific skills is at least 21% to 39%

Candidate expectations are significantly higher than stipends paid by employers. The divergence in the top 5 metro cities (in terms of candidate expectations) are as follows:

* Delhi [Candidate Expectation: Rs. 15,500 | Market Stipend: Rs. 9,033]
* Mumbai [Candidate Expectation: Rs. 12,800 per month | Market Stipend: Rs. 9400]
* Chennai [Candidate Expectation: Rs. 12,000 per month | Market Stipend: Rs. 9300]
* Bangalore [Candidate Expectation: Rs. 14000 per month | Market Stipend: Rs. 9800]
* Hyderabad [Candidate Expectation: Rs. 11,000 | Market Stipend: Rs. 8400]
* Kolkata and Delhi have the highest percentage of candidates (around 80% or more) willing to relocate to any city – hub or otherwise
* Employers are Raising Expectations
* A majority of employers (46% to 77% of those who responded to the survey) expect applicants to be aware about essential soft skills and a good 63% expect applicants to possess domain awareness.
* Employers rank domain awareness and quantitative / analytical abilities at the top (#1 through #3) in specialized domains [IT, Finance and Accounting, Production and Manufacturing].
* Soft skills awareness is predominant as compared to functional skills awareness in generic / support function domains [Administration, HR, Sales and Marketing] and its attributes are ranked #1 through

The report also delved into comparative analysis between stipends paid by large businesses vs. stipend paid by Medium and small businesses across the country. While large businesses paid significantly higher stipends [12% to 34%] than others, and the difference in stipends between medium and small businesses is not very significant. Further, the report brought to the forefront employers expectations with regard to skills. Some of the skills employers looked for in applicants were domain awareness, quantitative abilities, analytical abilities in specialized domains like IT, finance and accounting, production and manufacturing. In addition to domain expertise, employers also looked for soft skills and functional skills in generic as well as support function domains like administration, HR, sales and marketing.

The Stipend Primer is a detailed analysis pertaining to payouts to apprentices by sector, region, educational qualification and roles. The study covers apprentices employed in nine sectors across nine cities.