Case Study : Vikalp Vouchers – a Skill Voucher Pilot by CCS

Case Study : Vikalp Vouchers – a Skill Voucher Pilot by CCS

Prajakta’s story is quite similar to many other young Indians who struggle in the job market because they lack the skills. After completing her graduation in 2008, Prajakta enrolled for a post graduation program in Travel and Tourism Management at Garware Institute. Her family’s financial crisis forced her to drop out of the course. With little training, and poor command over English, decent jobs were out of reach. For more than a year, Prajakta struggled. Staying at home and receiving job rejections weighed badly on her morale. However, things took a turn for the better when she saw an advertisement in a local newspaper about the BARTI seminar, which she attended and was subsequently selected for the Vikalp program. 

The Vikalp Voucher scheme has helped Prajakta in two ways. With the help of voucher co-payment, Prajakta could undertake training without worrying about fees. Secondly, the program offered her an opportunity to undertake training in a sector she had earlier missed out on. She explains, “I really liked Voucher system of step by step payments. It is encouraging to know that someone is supporting us to undertake the training”. Prajakta now looks to the future with optimism.  She hopes that one day she would be able to run her own travel agency!

This is what an innovative skill training programme can achieve. There are more such stories of success and achievement like – Suvarna Gajare, a 35 year old housewife who desperately wanted to improve her family’s living conditions & help her taxi driver husband with drinking habits with a meagre earning of Rs. 3000 a month. A timely opportunity has made Suvarna confidently take on a career in the field of nursing

A Short description on comparison between the traditional government based funding model for skill development and the model of Vikalp Vouchers initiated by CCS.

A skill voucher is an instrument given to an individual which enables her/him to obtain training from any training institute accredited with the provider of the voucher.  The most prevalent model for skill vouchers involves individuals obtaining vouchers from the state, attending training courses of their choice, and paying for the courses via vouchers with a small contribution from their own pocket.Once the training has been completed, the training institutions in the program redeem the vouchers for cash. This is a ‘demand-side intervention’ which empowers the participant through ‘choice’ and ‘drives’ accountability of the institutes by linking voucher payouts to performances at the participant level rather than at batch level; as subsequent batches will  ‘choose’ institutes that perform better on placement/certification, there’s a greater incentive for  performance for an institute thereby holding the potential to catalyse change at the ‘systemic’ level and not just for the sponsored batches. In addition, the proposed solution has an integrated ‘counselling model’ in the form of Career Guidane Melas (fairs) that truly empowers choice by making it an informed one for the participants. In these melas, the participant  goes through an awareness session on the courses being offered and the expected career progressions. Choice of the participant is taken in the form of top three preferences at the end of the mela. Furthermore, ‘commitment’ from the particpant is ensured in the form of co-payment by the participant. These ‘demand-side’ aspects of choice, performance-linked pay, counselling  and co-payment are being done for the first time in the skill development space in India.

Benefits of vouchers are manifold, but the most significant are:

a) Counselling being an integral component in the program ensures that the students get a holistiic approach in terms of the career paths and career progresssions; the aptitude test provides a link between their aptitudes and the roles best suited for them and  helps them adapt better to the job market  as compared to other  programs

b) The overall quality control in the program starting from empanelling institutes on stringent evaluation criterias to ensuring quality checks by monitoring during the  trainings through a performance linked payment incentive to institutes helps in developing a competitive and effective ecosystem and   raises the bar on overall performances

c) Third party accreditation and assessment of the courses shall cater to the compliance needs and ensure transparency in the delivery system

d)The joint mobilisation offers training institutes to mobilise youth for the program rather than mobilising only for their respective courses. In the traditional model where government awards a contract to the training providers and numbers are pre-decided,  in this model, central mobilisation  and career mela format provides a level playing field to different training providers who have to earn the numbers by making  best pitch for their courses . This  ensures that any committment or contract is purely awarded basis the choice of the candidate and competency of the training provider.

The existing practices that are trying to address the challenge can be categorised as :

1.The National Skill Certification and Monetary Reward  (STAR scheme) by National Skill Development Corporation,

2. Government funded/subsidised  programs  &

3. Private training institutes

The objective of the STAR scheme is to encourage skill development for youth by providing monetary rewards for successful completion of approved training programs. This is first such government program which links rewards to delivery at the individual participant level, where a payment is made only when a participant is certified. However, the program only focuses on getting the participant certified rather than the placement outcomes. Further,  the STAR scheme does not provide career guidance  inputs.

The government subsidised programs fail to create a traction with the participant as most of the times the component of choice is missing.  Also, the accountability is missing resulting in poor performance and credibility. Further, these programs pay institutes based on batch level performance leading to weak reward structures.

The third solution comprises of private training partners, who charge market rates which may not be affordable.

Thus, there is a pressing need to look at alternative means of skill development and improving the efficiency in this sector. Under the Voucher Program  the beneficiary gets ‘empowered with choice’ and gets enough information to make an informed choice – unlike in other programs where they have to settle for what’s free.  Sponsors only pay for performance and so have a more robust performance-linked-payout-structure, therefore, increasing returns on their investments. Further, it is expected that the voucher model provides a better impact per dollar spent by the funding agency. This can be illustrated as : Say for the aforementioned existing competitive landscapes the cost of training a student is USD 100. The per dollar impact under competitive landscapes can be represented as :

Thus, for the same amount of money spent, the outcomes are better for the voucher model. In addition, since the voucher program has an integral component of counselling and co-payment, it is expected that the participation by the beneficiary in the program is better compared to other existing common practices and leads to a lesser dropout rate. Due to a lesser dropout the donor money spent is not being wasted for the youth that did not get trained but joined the program. This further prevents financial leakages in the system.

The pilot is  already operational at two locations i.e. Mumbai and Pune with an enrolment of 675+ youth. CCS is targeting to train more than 10,000 candidates over the next 3 years on the basis of which it would like to make policy recommendations on skill financing to the government.

Read the story on The CSR Journal website.