‘STIPENDS COMMANDED BY APPRENTICES IN PUNE IS 150% HIGHER THAN MINIMUM WAGES’
~The median stipend paid to apprentices in Pune is around 150% higher than the applicable minimum wages~
Pune, April 11th, 2019: 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 Pune is 150% higher than the applicable minimum wages in the state. In fact, not only companies in Pune, corporates across Maharashtra have been generous when it comes to stipends they pay to apprentices. With a stipend that is 159% higher than the minimum wages, Maharashtra topped the list as the highest paying state. Amongst sectors automobile and allied industries (144% higher than minimum wages), retail (169% higher than minimum wages), and IT/ITes (153% higher than minimum wages) were the top paying sector for apprentices in the city.
From an educational perspective, according to the report, engineering and diploma holders in Pune commanded premium stipends. In fact, Diploma-holder apprentices are paid 2.5 times higher than minimum wages. Further, from a profile point of view, while sales executive and promoter apprentices were rewarded handsomely in automobile and manufacturing sector, trade and tech apprentices are paid significantly higher in sectors like electrical and electronic, IT/ITes and Consumer goods. Apart from stipends the adoption rate of Job profiles like operators, customer service assistant and maintenance and quality technician has seen a high rate of adoption in Pune.
Commenting on the analysis, Mr. Sumit Kumar, Vice President, TeamLease Skills University, said, “The high stipends given to the apprentices in the city is a reflection of the growing acceptance of the concept. We are confident that this growing reception coupled with the right initiatives made by the government will encourage further participation from corporates, it will instil confidence in the talent community also to participate in the program.”
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 41% 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
Ø Other Employability Schemes (OEES) pay 7.66% higher than the stipend paid under the Apprentices hip Act
o 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.
Ø The apprenticeship market has matured and pays out handsome stipends at a significant premium over minimum wages.
o 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%)
Ø Manufacturing and Services sectors both pay fairly high stipends in the average range of Rs.9,000 – Rs.10,000 per month.
o 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
o Top 3 Manufacturing sectors: Construction/Building , Automotive & Allied Industries, Electrical & Electronics
o Top 3 Services sectors: Tourism and Hospitality, Banking & Financial Services, Consumer Products / FMCG
Ø 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)
Ø 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
o Mumbai versus satellite cities / towns: 10%
o Bangalore versus satellite cities / towns: 47%
o Chennai versus satellite cities / towns: 18%
o Delhi versus satellite cities / towns: – 28%
o Hyderabad versus satellite cities / towns: 31%
Ø 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)
Ø 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%
o 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]
Ø Kolkata and Delhi have the highest percentage of candidates (around 80% or more) willing to relocate to any city – hub or otherwise
Ø Employers are Raising Expectations
o 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.
o Employers rank domain awareness and quantitative / analytical abilities at the top (#1 through #3) in specialized domains [IT, Finance and Accounting, Production and Manufacturing].
o 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. 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 acrossnine cities.
