Labour skilling can be a paying service

Skills lead you to livelihood. This simple truth started, and fuels, the journey of LabourNet, a social enterprise that provides vocational training services.

“I wanted to create an ecosystem that addressed every aspect of workers in the unorganised sector,” says Gayathri Vasudevan, founder and CEO, LabourNet.

“We have made good strides in primary education,” says Vasudevan, “but this is not the case with employable skills.” The youth need sustainable livelihood and social recognition and training has to be given when one is 18-25 years; else the window is lost and there is disillusionment, she says.

LabourNet, which has trained over one lakh people across 11 States and ensured accident insurance cover for over 30,000 workers, started as an NGO in 2006. The Movement for Alternatives for Youth Awareness initiative in Bangalore started as a pilot project to offer employment connection between workers and potential customers. “We noticed that there is a sizable gap between the skill and the capability; lack of skills results in low productivity and low wages,” says Vasudevan, who worked for eight years with the International Labour Organisation before founding LabourNet. This is a staggering problem, given that 92 per cent of the country’s workforce is in the unorganised sector. Of the 40 crore people in this category, nearly 10 per cent are unemployed and most others are under-employed. LabourNet ventured to impart skills such as carpentry, masonry, plumbing and painting. Vasudevan says that skill development efforts tend to fail due to a few reasons. First, any young person who takes up a craft is seen as a ‘failure’ as he is not in the ‘formal’ education segment. Next, the teaching methods used are not suitable to impart practical knowledge. Last, lengthy training sessions fail to hold the interest of the students who cannot afford the luxury of being without a job.

LabourNet has found ways to turn these problems into solutions. Take the case of Raja Naik, who works at a construction site near Bangalore. He was trained in masonry and plastering at his construction site, after taking permission from the construction company. After a month of hands-on learning, Naik is now proud to be in charge of a ₹4-lakh project. As the training is short and happens in modules, he can choose to enrol for the next level after he sees tangible monetary and expertise benefits from the first training.

The close corporate ties enable LabourNet to run on-site training programmes with the dual benefit that workers do not forego their wages and the company does not lose a resource. The company works with 110 clients, including Godrej, HUL, DLF, Bosch and Schneider Electric. Knowing the employers’ needs has also helped to create relevant training material for over 40 trades across services, construction and manufacturing verticals.

The company has developed robust assessment and certification techniques to ensure that each candidate actually has a marked improvement in skills. Around 70 per cent of those trained get placed and the company offers assistance in getting job work contracts.

A village entrepreneurship model is also used to help trainees start their own operations. While LabourNet has put in place an ecosystem to link these micro enterprises to the market, Vasudevan is cautious. “We cannot say that we create entrepreneurs if the only reason they started something was because they could not get a job,” she says. The aim is to ensure that one’s livelihood and social status are upgraded.

In addition to the sizeable social impact, LabourNet’s financial growth has been significant. Its revenue grew from ₹4 crore in 2012-13 to ₹18 crore in 2013-14. In the next year, it expects to top ₹80 crore. The company’s 40 livelihood centres generate income from training fees, which is around ₹3,000 for a course. Also, work contract and local marketing partnerships offer additional income. Its on-site training business model is low on capital investment and funded by corporate houses or government agencies, aiding sustainability.

LabourNet has received funding in the past from Grassroots Business Fund, National Skill Development Corporation (NSDC), and Sankhya Partners. Late last year, it received funds from social impact funds - Acumen and Micheal Susan Dell Foundation.

It is now offering a beautician course for women and this is receiving good response. LabourNet is actively exploring the agriculture sector, which employs over half of the informal sector workforce. “We hope to reach two lakh workers next year and a million in the next six years,” says Vasudevan.