Skill Impact Bond Boosts Women’s Workforce Retention in India

India stands at a defining moment in its economic journey. With one of the youngest workforces in the world, the nation’s growth story will be shaped by how effectively it harnesses their potential, especially women. Encouragingly, education levels among women have been steadily rising, creating a strong foundation for greater workforce participation. 

However, according to the World Bank, only 28% of Indian women aged 15 and above were part of the labour force in 2023. This figure highlights both the scale of the challenge and the immense opportunity ahead. The task is not only about enabling women to enter the workforce, but also about ensuring they are able to stay and thrive in it. Addressing barriers such as social norms, family responsibilities, safety concerns, and limited employer support is the key to unlocking this transformative potential.

In response, the Ministry of Skill Development and Entrepreneurship (MSDE) launched the Skill Impact Bond (SIB) in October 2021. India’s first development impact bond for employment outcomes — and the largest of its kind — the SIB reflects a bold new shift towards results-based skilling. Unlike traditional models that focused on enrolment and training numbers, this programme ties funding directly to measurable outcomes such as certification, job placement, and retention. The initiative is designed to support 50,000 young people, with strong emphasis on long-term retention, and with women expected to comprise at least 62% of the overall workforce benefitting from the programme.

What makes this initiative remarkable is its strong focus on women. From the very first four cohorts, women have accounted for over 70% of the trainees, exceeding the original target. This was not incidental, but the result of deliberate, gender-responsive strategies at every stage. 

Mobilisation efforts included counselling families to secure their consent and support for women’s careers. Employers were carefully vetted for gender-friendly policies and safe working environments. Placement opportunities were sourced closer to home to reduce the risk of dropouts caused by relocation. Post-placement support ensured that women had the encouragement and resources needed to remain in the workforce.

The results have been both impressive and inspiring. Women’s retention rates have risen from 48% in Cohort I to 66% in Cohort IV, reaching parity with men for the very first time. Placement rates for women have climbed from 66% to 81% over the same period. Self-employment among women has more than doubled, from 6% to 14%, reflecting a growing entrepreneurial spirit, particularly in trades like sewing machine operation. Perhaps most strikingly, the gender gap in retention — which stood at 23 percentage points in the first cohort — has now closed completely, with women even slightly outperforming men in Cohort IV. 

The initiative recorded great success. Women’s certification rates have reached 92%, their placement rates are nearly equal to those of men, and their retention is now fully on par. These achievements show that outcome-driven training combined with employer engagement and post-placement support is the most effective way to improve women’s long-term workforce participation.

A beneficiary of the programme, Shraddha Mishra, from Delhi, says, “Losing my mother at a young age and watching my father work tirelessly taught me resilience and responsibility. But it was the Skill Impact Bond program that gave me the right direction—it helped me build confidence, improve my communication, and believe in my own abilities. Thanks to this program, I secured my first job, which is more than a paycheck—it is proof of my independence and a step toward my dream of becoming a teacher. With honesty and hard work, I am determined to support my family and one day guide young minds as an educator.”

For MSDE, the Skill Impact Bond represents more than just a programme. It is a proof of concept for the future of India’s skilling ecosystem. By linking funding to tangible outcomes, embedding accountability, and ensuring that gender-sensitive delivery remains at the core, the ministry has redefined what true success in skilling should mean. 

“As the eldest of six siblings, I always felt responsible for my family, but financial struggles forced me to give up my studies after Class 8. The Skill Impact Bond program gave me a second chance—it not only trained me in apparel manufacturing but also helped me regain confidence, strengthen my basics, and believe in my future. Today, with a stable job, I am able to support my family and fund my siblings’ education. Even though I missed the chance to continue school, I am determined to ensure they achieve what I could not,” says Salomi Malto, another beneficiary from Jharkhand.

As the initiative advances into new cohorts, there is tremendous potential to expand into emerging sectors such as green jobs, digital services, and advanced manufacturing, and to partner more deeply with state governments to scale these best practices nationwide.

India can realise its full economic potential by placing women at the heart of its workforce. The Skill Impact Bond has shown that when skilling is aligned with the job market, when employers act as real partners, and when women’s needs are addressed at every stage, it is possible not just to increase female participation but to ensure that women stay, grow, and lead in the workplace. This is more than training — it is about building careers, shaping futures, and paving the way for a more inclusive and resilient economy.