Cost of training

An insight into the working efficiency of a training institute

By GS Sethi

No activity or process can sustain itself for long unless it is economically viable, operationally effective and efficient. In simple terms it is necessary to weigh the outcomes against the inputs provided. It is relatively easier to gauge it if all the inputs and outputs can be measured with reasonable accuracy and in similar units. Usually it is much more than that, because several factors involved may be intangible and matter of subjective judgment or the results may show up much later.

Education and training is an area where much more is aimed at on long-term basis, but at the same time the immediate outcome can’t be ignored altogether. It is especially more so in case of vocational training where the aim is to equip individuals with skills which can be applied almost immediately to achieve benefits in financial terms.

Take for example the case of a training institute (say Industrial Training Institute, i.e. ITI). There are costs incurred by the institute and the trainees on various counts like:

• Cost to the institute — personnel & non-personnel cost, cost of infrastructure etc.
• Cost to the trainees — training fee, books, transport and other costs.

There is another cost item, which is normally not taken note of. It is the opportunity cost (or the foregone earnings) of the trainee. It is the earning of the trainee, which would have accrued to him if he had chosen to enter the world of work (and had made an earning) instead of joining the training institute and spent the period of training there.

On the output side what is immediately noticed is that the institute has offered training courses through which a certain number of students have been imparted skills to enable them to find employment and make better earnings. This leads us to an assessment of the internal efficiency of the institute. In other words, a measure of internal efficiency deals with performance and outputs of training institutions with regard to: (a) the numbers of students enrolled, retained and successfully graduated, and (b) utilisation of training seats, capital assets and human resources in producing these outputs. Reduced students’ enrolment, large proportion of dropouts and low graduation rates are signals to diminished internal efficiency. A considerable capacity of training institutes such as planned training seats, space, training equipment and available staff are underutilised under these conditions.

A study carried out a few years back on the working of a private and a Govt ITI (both well-established and in existence for long) revealed what is briefly given here. The private ITI had on offer 7 trades (actually 6 operational) and the Govt ITI had 27 trades (10 operational, 8 partially operational and 9 non-operational). The reason for non-operationability of some trades in case of private ITI was said to be that the admission qualification is pitched too high and many qualified to that level would join institutes of high learning (like polytechnics) rather than join ITI. In case of Govt ITI, it was entirely due to lack of requisite number of instructors, although candidates in general prefer to join Govt. ITI for reason of much lower fee as compared to that in private ITI. This obviously put the otherwise available costly infrastructure to disuse. Some other factors which this study brought out are tabulated below.

The above data, though an isolated case, yet speaks volumes about internal functioning (and therefore efficiency) of the institutes. Low capacity utilisation, high dropout rate, low pass rate, low success rate are at the root cause of low internal efficiency of any training institute.

Low capacity utilisation is also probably due to the reason that no labour market assessment surveys are applied regularly to check the potential demand for skills. Graduates’ labour market success has also been rarely examined. As a result, ITI courses continue to have only far-fetched links with the local labour markets. High dropouts is a problem area at all levels of education. In this case, the dropouts, in the opinion of the ITI principals are due to: non-seriousness of candidates to pursue training, getting job mid-course and preference for immediate job, disinterest in the trade chosen, inability to bear training expenses etc.

An important feature which is probably never noticed in any reporting system is the time taken to graduate a given course of normal fixed duration. Taking more than double the normal time (as indicated above in case of a Govt ITI) to graduate is heavy drain on resources of the institute and equally heavy extra financial burden on the trainees and loss of valuable time.

Without pondering too long over, who is responsible for this state of affairs, let us agree that things must change and at the earliest. Govt. of India has recently launched a scheme to upgrade all Govt. ITIs through public-private partnership under which the management of institute will be the responsibility of a Committee headed by industry nominee. With the administrative flexibility and financial autonomy available to the committee, things should hopefully change for the better, especially in terms of market orientation, resource utilisation, readiness to experiment and improve. However, it is too early to predict the benefits, because breaking away from the past bureaucratic practices and lack of preparedness on the part of the Govt. employees of the ITIs to adjust to change, are coming in the way of achieving what the scheme aims at. Nonetheless, things well begun are half done. Institutes’ managing committees would do well to look into the problem areas enumerated above. It would be well worthwhile to design and undertake research projects on such problem areas so as to gain better and deeper insights and devise remedial measures.