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Apr, 17 2011

Money in career-making

The vocational education industry is worth US$ 1.4 billion and expected to grow to US$ 5.8 billion. In India, it is reckoned to be the most franchised sector, hugely dominated by IT training, IT-enabled services (ITES) and subsequently by finishing school

AS the demand of skilled labour is intensifying, vocational education and training segment is growing exponentially to cater to the industry needs. The vocational education is further diversified into animation training, IT training, BPO training, spoken English, aviation training, staff recruitment solutions, CA training and hospitality and retail institutes.

Business potential

India is far behind developed countries and even country like China in formal vocational training. Only 2 per cent of our country's workforce has professional skills.  However, it is reckoned to be a very active sector when it comes to deciding on the external funding options such as private equity. Says N.K. Shyamsukha, Chairman, Insitute of Chartered Accountants (ICA), “The conventional education system is theoretical in nature wherein industry demands practical exposer and skillset. The introduction of vocational training, computer-based practical education and other technological advancement has helped to bridge the gap of demand and supply.” As per Manish Khanna, CEO, UEI Global Institute, “The vocational courses compliment the formal education, leading to better employment opportunities. This has been possible through private and government initiatives.”

According to Ninad Karpe, Managing Director, Aptech Limited, “Aptech caters to the vocational education needs of the market, the target audience being in the age bracket of 20 +years, who are ready to enter the job market and are continually growing.” Shampi Venkatesh, Head, Operations and Channels, ILS (IT), NIIT Limited, says, “Over the years, we helped India's youth in acquiring skills that would get them the dream jobs in the booming IT industry and prepare them for the digital world.”

Franchising

The industry attracts individual institutes to opt for conversion franchising. As per Shyamsukha, “This option is available only for ATOM, where the franchisee should have minimum 10 computers and faculty members should be certified by us.” A vocational training institute can be started with minimum capital in residential markets and convenient commercial retail locations near the education hubs having easy accessibility through public and private transport.

Expansion

ICA plans to set up 300 more centres and 100 placement offices in big cities and 1,000 ATOM centres in Taluka by 2012. Avalon plans to grow to 55 operational centres during 2011, while Aptech intends to tap certain unrepresented areas. The company is looking at approx 100 new centres. By this year-end, Cadd Centre has plans to open 60 units. UEI Global is targetting tier II, III and IV cities pan India and plans to open 50 institutes by 2013.

Flip side

So, what makes this segment a challenging industry? The answer is: dearth of qualified manpower and specialised training institutes, inexperienced franchisees unable to attract desired volume of candidates and pricing challenge posed by local players in the proximity. Ravi Dighe, EVP & Head, Student Development, Avalon, says, “Having right manpower is the key to success.”

In the vocational industry, operating an outlet in the same educational hub has become a trend because of easy accessibility, location viability and potential footfall. Frameboxx CEO Naveen Gupta says, “It works for the end customer, as they don't have to go different places to explore options for them.”

As per N. Subramanian, Vice President, CADD Centre, “Being in the location where competitors exist helps in marketing because everybody will invest in local market and customers who walk-in to the location tend to inquire at all outlets offering similar products. When competition is quite intense, we are forced to sell by pointing the variation and differences.”

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