India Inc.’s Inclination Towards Paying Higher Stipends To Apprentices Continues To Surge

TeamLease Degree Apprenticeship, has launched its flagship ‘Stipend Primer Report’ for FY-2022. A unique and detailed deep dive into apprentice stipend trends, the report indicates the growing positive synergy amongst India Inc. companies to pay higher stipends than the mandated minimum notified stipends. In fact, according to the report, the average stipend pay outs witnessed a 2 per cent increase in FY-2022, compared to the previous fiscal. While the overall percentage increase has been a marginal spike, the report highlights a significant variation in stipend pay-outs across industries, cities and educational qualifications. In fact, stipend payouts in certain sectors have gained better traction than salary trends over the past year.

Majority of industries surveyed have indicated promising stipends for apprentices. In the manufacturing sector, six out of ten industries provided a higher stipend in 2022 as compared to 2021. Agriculture & Agrochemicals, with current stipend of INR 14,000, witnessed a 12 per cent growth. Similarly, Apparel & Textiles (22 per cent), FMCG (8%), Handicrafts & Jewellery (6%), and Infrastructure & Capital Goods (5%) also witnessed an increase in payouts. On the other hand, industries like Power & Energy (-10 per cent) and Healthcare (-7 per cent) saw a decline.

In the services sector, 11 out of 13 industries provided a higher stipend in the fiscal. The top industries included Media & Entertainment (18 per cent), Services including Repair and Maintenance (11 per cent), Education (9 per cent), Life Science (8 per cent) and E-commerce & Tech Products (8 per cent). However, despite the technology boom and the advent of 5G, Telecommunication (-4 per cent) and IT/ITeS (-2 per cent) saw a dip in the fiscal.

Sharing his views, Mr Sumit Kumar, Chief Business Officer, TeamLease Degree Apprenticeship, said, "We are thrilled to unveil the Stipend Primer Report for FY-2022, which sheds light on the remarkable evolution of stipend trends in recent years. Our findings indicate a significant 2 per cent increase in average stipends during the fiscal year 2022 as compared to the preceding year. This upward trend signifies a growing recognition among companies of the immense value and return on investment that come with engaging apprentices in their organizations. In fact, incidentally, stipend growth in India has outperformed salary growth in many industries, with many industries paying higher than the minimum notified stipends. Employers are willing to pay higher stipends than industry mandates as they see the value of investing in apprentices to bridge the skill crisis and create a sustainable talent supply chain. Companies are witnessing first-hand the transformative impact apprentices can have on their operations. In the last couple of years, even the government has taken various initiatives to promote apprenticeship adoption. Introduction of optional trade for broader coverage of job roles, availability of TPA support to industry to improve adoption and execution, financial incentives under the National Apprenticeship Promotion Scheme (NAPS) and National Apprenticeship Training Scheme (NATS), and the recent Direct Benefit Transfer (DBT), which streamlines the payment system, ensuring greater efficiency, transparency, and financial inclusion for apprentices, are all progressive steps. These are motivating even small and medium enterprises to scale apprenticeships. We are hopeful that lucrative stipends being paid out will attract more youth to take up apprenticeships that will help them enhance their employability and livelihood opportunities."

“As the demand for skilled professionals continues to rise, businesses are embracing apprenticeships as a powerful tool for talent development and acquisition. By providing valuable on-the-job training, mentorship, and real-world experience, organizations are equipping apprentices with the necessary skills to thrive in today's competitive job market. The evolution of stipend trends is a testament to the changing dynamics of the workforce and the strategic vision of forward-thinking organizations. Especially in the services sector, stipend pay-outs are increasing significantly, specifically in industries like Media & Entertainment, Services including Repair and Maintenance, Education), Life Science and E-commerce & Tech Products. We are delighted to witness the positive transformation for apprentices, which signifies a promising future for both companies and apprentices alike”, added Mr Dhriti Prasanna Mahanta, Business Head, TeamLease Degree Apprenticeship.

Furthermore, according to the report findings, the majority of cities (9 out of 14) experienced an increase in stipends in FY-2022 compared to FY-2021. The top-paying cities in FY-2022 were Chennai (INR 13,100 per month) and Kochi (INR 13,000 per month), followed by Bengaluru and Coimbatore, both offering INR 12,900 per month. Additionally, Nagpur and Lucknow saw a 9 per cent increase in stipends, while Chandigarh had a 6 per cent increase, and Delhi and Hyderabad each had a 5 per cent increase in stipend.

Even from the apprenticeship category perspective and an education qualification viewpoint, many cohorts of apprentices earned better stipends than the nominal base. Diploma and Trade (Regular) apprenticeships earned about more than 50% above minimum stipends and Trade (Degree) apprenticeships earned about 40% above minimum stipends. Premium stipends paid to Diploma holders are 30% to 50% higher than the average stipends in nearly 6 out of 14 cities. Similarly, Graduates enjoyed premium stipends that were 55-75 per cent higher in 5 out of 14 cities. Post-Graduates, specifically in Chennai, Hyderabad, Indore, Bengaluru, Chandigarh, and Delhi, received premium stipends that were 50-80 per cent higher than the average stipends. In terms of job roles, Agriculture Field Officer was topping the chart with INR. 15,200 per month, followed by Retail Sales (INR. 13,800 per month) and HR (INR. 13,600 per month).

The Stipend Primer Report FY-2022 is a comprehensive analysis of the current trends in apprenticeship stipend pay outs across India. The report covers 14 hub cities across 24 industries and the total number of unique employers covered in the report are 553.