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Saturday, February 10, 2018

National Employability Report 02-10


The key findings of the present study are as follows:

No significant improvement in employability in the last four years We did the previous large scale study of employability of engineers in 2014. We had found that only 18.43% of engineers were employable for the software services sector, 3.21% for software products and 39.84% for a non-functional role such as Business Process Outsourcing.

Unfortunately, we see no massive progress in these numbers. These numbers as of today stand at: 17.91%, 3.67% and 40.57% respectively for IT Services, IT Products and Business Process Outsourcing. This is despite the fact that the number of engineering seats have not increased in the past year. We are not inferring that all initiatives for employability improvement have failed and there may be pockets of excellence present. However, the need of the hour is to find these pockets and scale them up to make an exponential impact on employability. This is crucial for India to continue its growth story and achieve the PM's vision of India becoming the human resource provider for the whole world.

Only 3.84% folks employable for startup software engineering jobs Investments and growth of technology startups is the new business story in India. Ratan Tata recently said that India is becoming the Silicon Valley of the 1990s. To sustain this growth, we need candidates with higher technology caliber, understanding of new products and requirements and the attitude to work in a startup. With this in mind, we specifically captured employability for startup technology roles this time. Unfortunately, we find that only 3.84% of engineers qualify for a startup technology role. This is a big concern and would surely hamper the growth of startups in India. It may also cause the market to be diluted with a lot of low quality products floating around.

More aspiration to work for startups Last year, we had found 6% students were interested to work for a startup. This year it is up by 33% to 8%. Students from tier 1 colleges are most motivated to work in startups as compared to others. It is also observed that inclination of males is strikingly high to work with startups than that of females. Among all of these, more students as compared to last year are interested to work for startups. While this is good news, there is a still a long way to go as only a handful of candidates (8%) are interested to work for startups.

Higher salary aspiration and higher salary for same skill This year on, we find that students have higher salary aspirations. Last year the median salary aspiration was INR 310 thousand, which is now INR 340 thousand implying that the market is also paying higher salaries. The median salary for the same skill was INR 282 thousand last year, which is INR 313 thousand this year. This means that talent is getting expensive and we believe this is due to the huge demand of manpower in technology sector and lack of supply. However, it is important to note that this supply is artificially low: more than 25% of employable candidates are beyond the top 750 engineering colleges. This pool of candidates is missed out by companies and to make sure that the war for talent doesn't lead to salaries going out of control, we need to find ways of better meritocratic matching of students with jobs.

View the entire report here

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