South Asia RURAL LIVELIHOODS - THE PEOPLE SECTOR SERIES 2 NOTE NO. 4 Creating Jobs for 77215 Rural Youth in Andhra Pradesh, India Meera Shenoy, Smriti Lakhey, and Parmesh Shah The EGMM program started One job per poor rural family. This is the goal of the Employment Generation & Marketing Mission (EGMM), which was established in 2005 by the Andhra Pradesh Rural Poverty small - and those trying to start Reduction Program (APRPRP)1. Andhra Pradesh’s unemployment rate (6.7 percent) is slightly higher than that of India (6.0 percent), but these numbers do not give the full similar employment generation picture of employment challenges. Rural areas are plagued with low incomes and under- programs should perhaps also employment with many people working in the informal sector, manual labor or seasonal small scale farming. EGMM’s mission is to respond to this problem by facilitating begin with smaller pilots which employment in the formal sector — which offers more stable and higher incomes—for economically underprivileged rural youth so that poor households can leave poverty within will allow them flexibility and one generation. customization to local needs EGMM recruits unemployed or under-employed youth from poor households by working -today, EGMM has emerged as through the institutional network of rural self-help groups (SHGs) and their federations developed by APRPRP. By offering an end to end employment solution (training — the single largest jobs mission placement — post-placement support — alumni network) to rural youth, EGGM enables the poor to �nd jobs in the organized sector on better terms, with better skills, and higher for the rural poor in India. Its wages. Altogether 185,784 youths have been trained and linked to programs, such as Rural Retail Box 1: The 5 key elements of a successful jobs. job promotion strategy Academies command a strong To achieve its goal of generating 1. Aggregating demand of the rural labor brand name. In four years of employment for rural youth, force EGMM works with the state operation, 226,909 youth have government, the private sector, 2. Scanning the Market to Identify and community institutions of Employment Opportunities been trained at 450 EGMM the rural poor. Accurate targeting is an important component of 3. Setting up Market-Linked Job Academies training centers that are located the program. EGMM targets 4. Matching job seekers with job placements in rural and tribal areas. Forty- rural youth from poor families of SHGs who are between 18 and 5. Providing Post Placement Support �ve percent of these are girls and 28 years of age. Their education 37 percent are from the most levels vary – from having limited 1 Jointly �nanced by the World Bank and the Government of Andhra Pradesh, the objective of APRPRP is to enable rural poor vulnerable groups of scheduled and their organizations to improve livelihoods and quality of life. The project invests in building self-managed grass root level institutions and federations of poor rural women. Ten million women have been organized into 850,000 Self-Help Groups castes and tribes. comprising of 10-15 women in each. ability of just being able to read and write to having graduate degrees. Targeting is highly enhanced by a database Table 1: The Scale of EGMM of unemployed youth from the poor communities which Year No of Youth No of Youth has been systematically gathered and updated from remote Trained Placed areas. Of those who received training, about 80 percent 2005-06 12,320 11,200 have been linked to jobs. While the EGMM program started small - and those trying to start similar employment 2006-07 38,194 33,800 generation programs should perhaps also begin with smaller 2007-08 74,750 65,000 pilots which will allow them flexibility and customization to 2008-09 101,645 73,891 local needs -today, EGMM has emerged as the single largest jobs mission for the rural poor in India. Its programs, such TOTAL 226,909 183,891 as Rural Retail Academies command a strong brand name. In four years of operation, 226,909 youth have been trained The Institutional Framework at 450 EGMM training centers that are located in rural SHG Networks as The Core Backbone and tribal areas. Forty-�ve percent of these are girls and 37 percent are from the most vulnerable groups of scheduled EGMM was piloted by Society for Elimination of Rural Poverty castes and tribes. (SERP), the implementing agency of APRPRP, to enable the poor households to diversify their sources of livelihoods. SERP Figure 1: Employment Generation Model of EGMM Employed Youth Job Placement in Private Companies Monitors the overall program and Controls funds EGMM Rural Academy Market Scan Oversees the Academy Job Indenti�es youth to be enrolled in the rural academy Resource Counsels identi�ed youth Person (JRP) Registers youth in jobs database Children of SHG members who are educated and looking for work, but are held back by their poverty 2 relies upon the extensive network of 800,000 SHGs — groups of 10 to 15 poor women who save and rotate funds together, and carry out various livelihoods activities — to target the poorest youth in the communities, disseminate program information and penetrate remote village areas. EGMM recruits children of SHG members in its program. Between 2000 and 2006, during the �rst phase of the APRPRP program, members of SHGs invested 204 percent more in educating their children than before. This program makes it possible for them to reap the bene�ts of their investments. The institutional platform of the poor and the governance mechanism used by SHGs to run and monitor other community programs is used in the jobs program as well. Village Organizations (VOs) — the initial federation of Five Key Elements of the Job SHGs within the village — are responsible for overseeing the Promotion Strategy identi�cation of youth for employment and for counseling 1. Aggregating Demand of the Rural Labor Force them. Working with them is a new cadre developed and trained by the EGMM called Job Resource Persons (JRP). APRPRP piloted the EGMM out of realization that there is At Mandal Samakya (MS) level — the �rst tier at which a high demand for formal sector jobs in rural areas among VOs federate — a three member “job committee� is formed young people who are educated but have limited resources that discusses and shares experiences of the EGMM jobs and information to pursue them. Assessing the nature and program across the villages with the vision of creating volume of job demands is critical in designing the training unemployment-free mandals. The highest level of federation programs and the job placements. of SHGs at the district level, the Zilla Samakya (ZS), is responsible for monitoring SHGs, VOs, and MSs and it Job resource persons (JRPs) play an important role in demand controls the funds flowing down to the communities. ZS assessment and demand creation among the rural youth. JRPs manages logistics such as providing bus passes to youth are also members of SHGs. They raise awareness about the when they travel to cities for jobs and arranging their job program in rural areas, facilitate the process of identifying accommodations. They also facilitate parent meetings and the poorest youth eligible for the program, counsel them, counsel parents to send their youth, especially girls, to and recruit them into the EGMM program. Trained by the enroll in training centers. This three tiered structure of rural EGMM, these JRPs visit every household in the villages and institutions results in a bottom-up approach and ensures compile a database of unemployed and vulnerable youth for ownership of the program from the community. monitoring and targeting purposes. This database is fed into the EGMM software, which assigns a unique registration Public-Private Institutional Structure number for every youth. Based on their quali�cations and the job demand in the market, registered youth are screened EGMM has an executive committee with senior government and enrolled in the local training centers. officers and an executive director with experience from the private sector. In the �eld, government officers such as The VOs play an active role in identifying the eligible youth District Collectors, Project Directors of the District Rural for the job program and counseling them. Development Agencies (DRDA) and Project Officers of the Integrated Tribal Development Agency (ITDA) support the 2. Scanning the Market to Identify Employment Opportunities program. A core private sector team in EGMM at the state level builds links with the private sector and incorporates Based on secondary source research and data from market scan their feedback into the programs of the academies. This reports, growth sectors—industries which are experiencing unique institutional structure that incorporates governance relatively higher growth for next three years— are identi�ed mechanisms and knowledge from both the private and public and targeted for employment opportunities. EGMM officials sectors is critical for a market-led program like EGMM. visit potential companies for employment with a view to 3 construction and textiles. Meanwhile those with eighth grade Box 2: Recruitment at the HDFC Banks’ to graduate level literacy are linked to new economy sectors Rural BPO such as sales, retail, tourism, hotel industry, business process HDFC Bank needed to quickly set up deliverables outsourcing (BPO), and other skilled sectors. for new customers for services such as opening bank 3. Setting up Market-linked Job Academies accounts, issuing credit cards, etc. The Bank set up back room operations in nine larger cities but faced Rural academies for retail, security guards, English classes, the twin problems of attrition and the high cost of work readiness, and computer operations, have been set up infrastructure. When the Bank decided to set up a in partnership with industry. A training course typically lasts rural BPO, it approached EGMM for manpower. from 15 days to three months. Industry associations help with Says A. Gopinath, Vice President, “This is the best curriculum development and teach at the EGMM academies model the Bank has seen in 13 years of its existence. as guest lecturers. In addition to the sector speci�c technical Productivity is 200% higher than other BPOs- they trainings in classrooms, techniques such as role plays, mock �ll 400 forms versus 75 in operations based in cities. job interviews, and grooming of the trainees are necessary and Absenteeism is minimal. Work ethics taught by are used to help students �t in their new job roles. Emphasis EGMM is amazing.� is also given to soft skills development such as grooming, personality development, time and money management, and goals setting. Local teachers are great resources who have been understand their entry level employment needs and their trained to become trainers at these academies. Meanwhile, speci�cations of trained manpower. Training centers tailor involving the private sector in creating training modules their courses accordingly. Market scans for assessing the job ensures buy-in from them and matches the supply of labor market are important elements of the strategy for creating produced by the academy to the market demands. Hence, jobs for rural youth. Trainings for retail, sales, security most youth are placed with jobs immediately after completion guards, restaurants business, data entry, electrical operations, of their programs. In just three years’ time EGMM academies plumbing, sanitation, carpentry, painting and decoration, have become a quality brand name among employers. heavy equipment driving, apparel, etc, have been set up in rural and remote tribal areas. Students are matched for To broaden the range of training offered, use the best trainings according to their education level and interests. For resources available, and make strategic placements through instance, those who have limited literacy skills are trained in well-established networks, partnerships have been developed The partnership between EGMM and Hindustan Unilever's Pureit is a pioneering effort that seeks to bring together the capabilities of EGMM and Hindustan Unilever to help secure the future of unemployed rural youth by providing them a sustainable and ful�lling livelihood. EGMM's comprehensive training processes equip these youth with the key skills that are required to make them employable. Further, the facilitative role played by EGMM in terms of accommodation and an initial period stipend have played an important role in helping to settle these individuals in their new roles. Yuri Jain, Director Hindustan Unilever 4 with other organizations that offer employment training. EGMM has forged partnerships with organizations such as Tally and National Academy of Construction, among many others. EGMM works continuously with partners to improve program quality and the curriculum. For example, EGMM trained all trainers of their 14 partners in all 22 districts in “counseling� and “coping with migration�. 4. Matching Job Seekers with Job Placements Networking with reputable private companies that need entry Companies recruit from EGMM both for the quality of level manpower is an important element of the placement trainees and support offered to the youth post-placement, strategy. The market scan, solicitation with companies which reduces attrition that is a high cost to companies. In with employment opportunities and trainings designed retail companies, hiring EGMM trainees has reduced the to meet the job market needs form a strong platform for attrition rate from 55 percent to just 5-10 percent. the placement part of the job creation strategy. Job fairs or “job melas� are organized in rural training centers creating EGMM periodically rates companies according to the salary a platform for many companies to showcase themselves offered; bene�ts extended such as boarding and lodging, and meet their labor needs. EGMM organizes recruitment insurance, etc; and the sensitivity of supervisors toward fairs at EGMM campus locations only. The purpose behind their employees. It blacklists companies with polluting work this practice is to sensitize the companies to EGMM, its environment—such as scraping of jeans in textile factories, or vision and mission, and inspire them to be mentors of the in companies where salaries are below the minimum wages program. prescribed by the state, and does not place the youths in such companies. By employing rural youth, private companies take advantage of recruiting in a more cost-effective manner compared to A month after placement, arrangements are made for the high urban salaries — a rural workforce can be employed at mothers of the rural youth to visit their children in their a more competitive price. This model also allows companies workplace in the cities. The sense of pride they feel is to ful�ll the government mandate of providing employment unmatched. This also raises awareness of the program and to scheduled caste people and ful�ll their corporate social helps in the scaling up process. Additionally, government responsibility. Additionally, the comparative advantage of a officials are taken on exposure visits to understand the well-trained and motivated workforce makes hiring EGMM changing needs and expectations of companies so that they graduates an attractive option for the private companies. can provide support accordingly. Today EGMM supplies 80 percent of entry level manpower in Andhra Pradesh to large retail chains like Aditya Birlas, fast Experience has shown that when these newly employed youth food chains like McDonalds and Café Coffee Day, and Pureit return home, they become powerful agents of recruitment sales of Hindustan Unilever, among others. EGMM is also a themselves. They counsel and motivate their friends and dedicated manpower supplier to the manufacturing unit of families to enroll in EGMM. Each returning employed youth, Apache, of the global giant Adidas shoes. brings at least ten new trainees to EGMM. This enables the approach to become cost effective in the long run. 5 5. Providing Post Placement Support: Orientation, help line with counselors is established to provide support Micro�nance Products, Social Support, and and guidance. When necessary, the counselors also facilitate Alumni Network discussions with the management to address work issues. Orientation: Once the trainees are offered jobs in companies, This mechanism helps in supporting the new employees and EGMM offers them orientation to their new workplace boosting their con�dence in the city. and the new environment. The module includes money Alumni Network: The EGMM maintain a network of the management, coping with city life, and other counseling alumni and keep them engaged as role models for the trainees. services. Research shows that just placing the trained youth Senior alumni share their experience in the training classes with companies is not enough. Their transitions from as guest lecturers and build the con�dence of trainees before rural surroundings to the urban cities need to be carefully job interviews. Alumni also provide tips on how to deal with managed. customers, cope with city life, and plan their career or goals Micro�nance Products: In many cases in the past, newly for higher education. This is very effective for coaching the placed youth quit their jobs within early days of the placement trainees because most of the youth are �rst generation white due to the high expense of city living in the �rst month of collar workers whose parents are agricultural or other wage employment. They were unable to cope when they had not laborers, from whom they can get limited guidance when it yet received their salaries. To prevent monetary constraints comes to city jobs. from being the source of dropping out, EGMM facilitates provision of �nancial tools to smoothen the cost of transition Using Information Technology to to the city life. It offers micro-loans through federations of Monitor the program SHGs to cover living expenses of the �rst month in the city. Monitoring a program of this scale is a challenge. To The interest on the loan is decided by the federations and overcome this, EGMM uses transaction based software payments are made in small installments. (www.egmm.ap.gov.in) that gets training, placement and Social Network: Youth are usually placed in groups in private post placement data from each training centre. This software companies. Having people with similar backgrounds and allows EGMM to monitor and analyze its performance even similar goals prevent a sense of isolation that youth might at the village level. Placement and dropout analysis is done otherwise feel in a new city environment. Additionally, a seamlessly using this EGMM developed software. This IT backbone has helped bring quality and transparency into the program. Box 3: Impact on Stakeholders The Rural Community Impacts of EGMM  Fixed income, new skills, and self con�dence Increased Income: On average EGMM trained youth earn  Remittances for the rural families an income at or above Rs. 42,000 per year in urban areas  Lowering of caste stigma and about Rs. 30,000 per year in rural areas. This amount is three to four times higher than the average income earned  Eradication of poverty within a generation’s by a rural family in agriculture, which is about Rs 10,000 time in a sustained manner per year. Fifty-one percent of trainees received incremental The Government pay increases within six months of employment. The average  Employment creation for rural youth increment of the trainees was about Rs. 550 per month.  Poverty alleviation Remittances: Surveys show that almost all of the working youth  Prevention of social unrest from high send 20 percent of their earning back home. Remittances underemployment in rural areas have tremendous effect in improving the �nancial condition The Private Companies of the families. Those who receive remittances use 38 percent  Competent, loyal, cost-effective workforce of this additional money to clear previous high cost debts at high interest rates. Twenty-three percent is deposited as • An opportunity to ful�ll its social responsibilities savings and 19 percent is used to create assets such as adding 6 Figure 2: HOW Households are using the Table 2: Training cost per person and ROI Remittances (in %) (unit: Rs) Training Training Monthly Annual ROI (%) Program cost Starting Salary Others Salary 8 Average 8,992.63 3,487.35 41,848.20 365.36 Education 12 Construction 6,178.33 3,564.78 42,777.36 592.38 Clearing Debts 38 EWRC 9,525.00 3,677.71 44,132.52 363.33 Assets IKP Labs 8,450.00 3,149.81 37,797.72 347.31 19 Security 4,390.00 3,730.47 44,765.64 919.72 Savings Skylark 10,525.00 5,116.67 61,400.04 483.37 23 Textile 5,416.67 2,934.00 35,208.00 549.99 Other Services 10,236.11 3,750.67 45,008.04 339.70 Note: EWRC: English Work Readiness & Computer Academy a room to the house, buying land, colored televisions, etc. Twelve percent is used to educate younger siblings, and 8 percent for other purposes. Creating Intellectual Assets and an Inclusive Society Improved quality of life: An impact study of youth2 trained The intellectual assets generated through EGMM make as security guards placed in a multinational company—G4 additional bene�ts to the society. The skills and the knowledge Securitas—showed that the quality of life of their families generated from the training is a permanent asset, components has improved because of one family member working in the of which are transferable across jobs. The impact on girls is city. Ninety-four percent of the households say that they are marked with reduction in child marriages in rural and tribal able to afford more nutritious food and 30 percent of the areas as girls opt for a career in hitherto male dominated families have invested the money to improve their housing sectors like sales. Meanwhile, the rural-urban divide and the conditions. unorganized-organized labor divide reduces as rural youth get trained to work white collar jobs. Less dependency on money-lenders: Financial conditions have improved since household dependence on money lenders reduced from 74 to 14 percent among the family members. Way Forward Meanwhile, 92 percent of the households say that their Educational products for the youth: EGMM is exploring dependence on local moneylenders has reduced. educational products so that the young people can continue higher education, if they choose, while continuing their jobs. Return on Investments (ROI) With higher education, these youths will be able to ascend in their jobs and make higher incomes. EGMM invests Rs. 8,992.63 per trainee on average for the job training program. Each trainee after placement Microcredit products: To make the job training cost affordable, earns Rs.3487.35 per month on average. Therefore, ROI is microcredit products are being developed. The microcredit 365.36 percent3. will be offered through the federations of the SHGs at a lower interest rate with manageable repayment schedules. This will 2 Intellecap Study of Youth trained and placed by EGMM 3 Mariko Katsura, Goldman School of Public Policy, University of Berkeley EGMM data 7 Box 4: Future in the Service Sector Sudharani is from Old Chintalapudi Village in West Godavari District. She could not complete her college education as her father an agricultural laborer could not afford her college fees. Her mother, an SHG member told her about EGMM English and computer centers. After three months training she was placed at Big Bazaar, the largest retail chain in the country earning a salary of Rs. 3500 per month as a customer service associate. Recently, she returned to her home district to work as a cashier with Coromandel Fertilizers which brings in Rs. 5,000 per month. Sudharani says, “Now I will complete my graduation from the university.� She enrolled both her brothers in the EGMM Academy. Today the three working youths have enhanced their family income from Rs. 10,000 year to Rs. 144,000 a year. make the program accessible to more youth in future who are based to include other sectors services, manufacturing, in need of employment. and the like, the rural poor risk falling into the poverty trap of unorganized, non-farm employment. Hence, Support Alumni Company: For its entrepreneurial alumni, skills development programs are a critical element of EGMM is looking into supporting alumni run companies the livelihoods agenda in areas that are transitioning through �nancial investment products and business advisory from agriculture. Based on the experience of Andhra services. Pradesh, the EGMM approach has been replicated in Indian states such as Bihar, Orissa and Rajasthan; and Scaling Up similar approaches are adopted in other states such as As countries’ economies transition from agriculture- Tamil Nadu. Series 2. Note No. 4. January 2010. About the authors:  Meera Shenoy is an Executive Director at the Employment Generation and Marketing Mission (EGMM) in Hyderabad, Andhra Pradesh, India.  Smriti Lakhey is a Junior Professional Associate in South Asia Sustainable Development Department at the World Bank.  Parmesh Shah is a Lead Rural Development Special in South Asia Sustainable Development Department at the World Bank. The document was reviewed and edited by Natasha Hayward and Melissa Williams of the World Bank. The Livelihoods Learning Series is published by the Rural Livelihoods Cluster in the South Asia, Sustainable Development Department of the World Bank, 1818 H Street NW, Washington DC 20433, USA. For additional copies contact mwilliams4@worldbank.org The �ndings, interpretations, and conclusions expressed in this note are entirely those of the authors and should not be attributed in any manner to the World Bank, to its af�liated organizations or to members of its Board of Executive Directors or the countries they represent. The World Bank South Asia Agriculture & Rural Development 8