Aspiring Minds.pdf

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National Employability ReportEngineering Graduates

Annual Report 2011


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Table of Contents

Introduction 5

Executive Summary 7

Methodology 9

I. Employability by Sectors 10

II. Employability by Gender 13

(a) Gender Ratio in Higher Education 13

(b) Employability by Gender 15

III. Employability by Region 17

(a) Employability by Tier of Cities 17

(b) Employability across States 19

(c) Employability in Metros vs. Non-Metros 22

(d) Employability in Key Cities 23

IV. Employability Variance in Campuses 25

(a) Employability in top-tier Campuses vs. the rest 25

(b) Employability in Govt. and Private Colleges 26

(c) Employability Variance across Colleges 27

Appendix 30


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Aspiring Minds National Employability Report Engineering Graduates, 2011 l 5

The importance of higher education in relation to the progress of the

individual and the nation cannot be overstated. In today's world, the

intellectual capital of a nation is its biggest strength in driving socio-

economic growth. For an individual, higher education is not only a meansof intellectual pursuit, but also a catalyst to become self-dependent

financially to lead a respectable life. We as a Nation have been the

beneficiaries of the new knowledge based world economy and so has

been the consistently growing Indian middle class. To continue on this

growth path and allow its advantages to trickle down to the masses, we

need to continue to audit the quality of our higher education system,

identify gaps and implement constructive interventions for a better

tomorrow.

In 2009, Aspiring Minds released the first National Employability Report

for technical graduates. The report, for the first time, defined employability

for different corporate sectors and profiles, and analyzed the percentage

of technical graduates employable in each sector. The reported low

employability served as an eye-opener, suggesting a pressing need for

education and policy reforms. It also detailed how a major proportion (70-

80%) of employable engineering graduates is outside the top 100

engineering colleges. Given that most corporations hire only from the top-

tier campuses, this creates an artificial fall in the supply of employable

engineering graduates and deprives many talented individuals from even

getting an opportunity to a hiring process. Covered widely by national and

international media, the report successfully identified key problems affectingthe education-employment ecosystem in India, and led to a constructive

debate.

The present edition is an expanded and more detailed report based on

most recent data more than 55,000 engineers who graduated in 2011.

It goes deeper to identify patterns in employability across different regions

and kinds of colleges, analyzing in detail the distribution of employability.

Herein, it studies how employability varies across different groups:

l How many employable females vs. males graduate every year?

l Which regions exhibit high employability, and why?

l How different is employability in private and government colleges?

l Are most colleges producing the same percentage of employable

candidates, or is there a wide variation?In

trod

uct

ion


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6 l Aspiring Minds National Employability Report Engineering Graduates, 2011

Such results are indispensible to enable targeted intervention in differentgroups and kinds of colleges. At the same time, it is a first step towardhypothesizing the causes for low employability.

Such an analysis allows one to measure some key drivers of economicand intellectual growth. This measurement provides a tracking mechanismto see how India is progressing year on year toward building a powerful,enlightened and equitable nation. Aspiring Minds is committed to activelyprovide feedback about employability and higher education to allstakeholders through a yearly report card.

With commitment to the development and progress of higher educationin India!

Varun Aggarwal

Co-founder and DirectorAspiring Minds


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The key findings of the present study are as follows:

The percentage of ready-to-deploy engineers for IT jobs is dismally low

at 2.68%.

Even though India produces more than five lakh engineers annually, only

17.45% of them are employable for the IT services sector, while a dismal

3.51% are appropriately trained to be directly deployed on projects.

Further, only 2.68% are employable in IT product companies, which

require greater understanding of computer science and algorithms. An

economy with a large percent of unemployable qualified candidates is

not only inefficient, but socially dangerous. The right training, at one

end, and employability assessments acting as feedback at the other, will

help both in goal-setting and tracking progress to make a larger proportion

of engineers in India employable.

There are considerably more males than females in engineering, but

with equal employability.

The ratio of male-to-female engineers is 1.96, which is higher than the

population ratio (1.06), but much lower than that of other countries, such

as United States of America (4.61). The percentage of employable male

and female engineers is similar across sectors, yet the current ratio of

females to males employed in IT industry is lower than that of the

engineering population. Efforts are required to encourage more femalesin engineering education and jobs across the nation.

Concentrating on increasing quantity of engineers has impacted quality

drastically.

With regard to employability percentage in different states, it was found

that employability decreases logarithmically with the number of colleges

in the state (in sync with Arrow's hypothesis). This clearly shows that

opening more colleges is directly impacting the percentage of employable

engineers graduating every year. The need of the hour is to focus on not

opening more colleges, but improving the quality of education in existinginstitutions.

ExecutiveSum

mar

y


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The long tail of employable engineers is getting missed out by

corporations.

The report found that the top 100 colleges have higher employability ascompared to the rest of the colleges (as much as two to four times).

Despite this, more than 70% of employable candidates for any sector are

in campuses other than the top 100. It was found that 50% of employable

candidates for IT services companies and 28% of employable candidates

for IT product companies are not even in the top 750 colleges, and thus

form invisible pool to most employers. This signals that a large proportion

of employable engineers are ending up without any opportunity, which

is a dangerous trend for higher education.

The quality of education varies drastically, with only a very few colleges

at the top of the quality ladder.

With regard to employability distribution among campuses, it was foundthat the quality of education falls steeply among the top-ranked colleges,implying that even colleges ranked very closely have very different qualityof education. A large number of colleges are at exceptionally lowemployability: bottom 45 percentile campuses have less than 1 in 100candidates employable in an IT product company, while the bottom 20percentile campuses have none. This means there is an urgent need toreduce the quality-gap between colleges and get them above a minimumthreshold.


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The report is based on a sample of more than 55,000 engineeringstudents from 250+ engineering colleges across multiple Indian states.All these candidates graduated in 2011.1 The analysis and findings of

this report are based on the results of these students on AMCAT: AspiringMinds Computer Adaptive Test, which is India's largest and onlystandardized employability test. AMCAT covers all objective parametersfor determining employability in the IT/ITeS sector such as Englishcommunication, Quantitative aptitude, problem-solving skills andComputer Science and Programming skills. The test was conductedunder a proctored and credible environment ensured by Aspiring Minds.

Employability has been quantified based on the benchmarking studiesdone at various companies in different sectors by Aspiring Minds.Currently, AMCAT is used by more than 120 companies, including five

of the top-ten IT services companies in India, for their assessment andrecruitment solutions. The benchmark for employability in a profile andsector is defined by a theoretical understanding and empirical validationof the knowledge, cognitive skills and domain expertise required. Thebenchmarks established for different profiles ensure both elimination ofunsuccessful candidates for a job (type I error) and inclusion of allcandidates who will be successful in the given job (elimination of typeII error). The same has been validated among multiple companies invarious sectors.

Together with the AMCAT scores, the various demographic details of the

candidates are also captured by Aspiring Minds' testing platform, whichhas enabled a comprehensive and meaningful analysis provided in thereport.

Metho

dol

ogy

1The sample was statistically balanced across various parameters to be representative of thetrue technical graduate population. A carefully chosen stratified sample was used for thestudy.


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I. Employability by Sectors

Engineers are absorbed in many different job profiles and sectors in the industry. The major

sectors employing engineers in large numbers were identified and studied to determine thepercentage of employable engineers across the nation. The criteria for employability are basedon the studies conducted with various corporations in these sectors, benchmarking their currentemployees in various profiles through objective assessment based on AMCAT and establishingfeedback through on-job performance data. These benchmarks serve as a standard for severallarge-sized companies across the nation.

Sector Employability GraphIT Services 17.45%

IT Product 2.68%

Knowledge Process

Outsourcing9.22%

Hardware Networking 36.57%

Business Process

Outsourcing 40.69%

Fig. 1. Employability of Engineering Graduates in Different Sectors

The employability of engineering graduates in different sectors is shown in Fig. 1. The following

observations can be made:l IT Product Sector: The employability in the IT product sector is exceptionally low, to the

order of 2.68%.2 This is because jobs in IT product companies require a strong understandingof computer programming and algorithms. But the study found that the candidates stronglylacked the required skills: around 92% of graduating engineers do not have the requiredprogramming and algorithm skills required for IT product companies, whereas 56% showlack of soft-skills and cognitive skills. One may note that the skills required by the ITproduct companies at the entry-level are very much a part of the curriculum of engineeringcolleges, which is a worrying sign for higher education.

l IT Services Companies: The employability in IT services companies is 17.45%. It should

be noted that this has been calculated according to the current hiring philosophy of ITservices companies, where the candidate is not expected to already possess the requiredsoftware skills or soft skills, but is imparted the training over a period of 3 to 6 months.The hiring criterion for this industry, thus, is that the candidate should be trainable intechnical and soft skills. This requires both a basic command of language and technical

2Calculated across only those branches that have computer programming as a subject.


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skills, together with requisite cognitive skills to respond to training in a short period of time.Considering these rather lax requirements, the fact that only 17.45% of the graduates aretrainable into software engineers within a period of 3 to 6 months, is alarming to say theleast.

The research further shows that approximately 54% engineers are rejected because they arenot soft-skill trainable in a short period of time, whereas around 46% lose on technicaltrainability.

Apart from focus on core technical skills, technical trainability can be improved by adoptinga quantitative approach to engineering problems. Bridging courses to hone English skills ofthe candidates is a definite step toward improving soft-skills trainability.

l Small and Medium Sized Enterprises: Whereas large companies invest considerably in

trainings, small and medium sized enterprises (SMEs) do not find it viable to build training

facilities or invest time in it. They want to hire ready-to-deploy manpower. For them, the

engineering graduates should be able to learn on the job and start contributing effectivelyas soon as possible, typically in a month's time. This requires substantial competence in

domain skills. Whereas these companies do not expect the person to bring in in-depth

knowledge of computer science, the minimum expectation is to be able to write a decent

piece of code for a given problem, and the ability to debug and submit a working program.

Such candidates, who are software-industry ready, are just 3.25%. This explains why SMEs

find it so hard and time-consuming to hire.

If not corrected, this trend is poised to become a major impediment to the growth of

entrepreneurship and IT companies in India. One may recognize that the best economies

in the world are sustained by a strong SMEs sector, which in India is likely to suffer because

of the lack of right skills.l Knowledge Process Outsourcing Industry: As revealed by the research, the Knowledge

Process Outsourcing industry is likely to find 9 out of every 100 engineers employable.

Highly developed written communication and analytical skills are a must for this sector.

Though most engineers do not exhibit the required competence in English communication

(78% do not), a considerable number (56%) miss out on analytical and quantitative skills.

This calls for a fundamental shift in college instruction and assessment methodology, which

should be more inclined to developing analytical thinking and critical reasoning than

learning by rote.

l Hardware and Networking Profiles: This sector comprises roles involving technical support

and network management. Candidates employed in this sector manage hardware andnetworks within corporations, or carry out servicing roles providing support to consumers.

A good 36.75% candidates are employable in the hardware and networking sector, according

to the study. A person trainable in this role should exhibit basic understanding and usage

of computersboth hardware and softwareas well as be comfortable in English and

exhibit a problem-solving approach.


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l Business Process Outsourcing Companies: A large proportion of candidates(40.69%) are

eligible for the BPO industry, both in tele-calling and backend processes. However, graduate

engineers do not form the preferred employable group for these companies due to the

belief that these roles cannot match their expectations, both in terms of remuneration and

job satisfaction.

In summary, there is a long way to go before engineering graduates in India become employable

for various industries and job profiles. Such an economy, with candidates possessing appropriate

qualification but unable to exhibit the right competence, is not only inefficient but socially

dangerous. More focused trainings and feedback through employability assessments at various

times will help improve the scenario.


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II. Employability by Gender

It has been said that the progress of a society can be measured by the condition of its women.

This makes it imperative to study women's position in the higher education and technicalrevolution in India. It is also important to understand whether there is any evidence for thetraditional belief that men make for better engineers!

This section tries to answer two questions:

l How many women are opting for higher education in the technical domains in India?

l Are men and women equally employable?

(a) Gender Ratio in Higher Education

In India, There are 106 males for every 100 females, making the sex ratio 1.06. In contrast, the

sex ration in engineering colleges is 1.96. This shows that a lower proportion of females makeit to engineering courses as compared to males. There could be multiple reasons for this,which are beyond the scope of the report. Interestingly, India fares much better in gender ratioas compared to the United States. A 2009 study suggested that the ratio of male to femaleengineers in USA was as drastic as 4.61! Among different branches, it was found that computerscience and electrical engineering disciplines had the least number of females.3

The gender-ratio changes with respect to the state of the campus were studied. The MFR(Male to Female Ratios) are shown in Fig. 2.

Fig. 2. Male-Female Ratio across states & Union Territories

*The male-female ratios for Jammu and Kashmir, Himachal Pradesh and North Eastern States have not

been included due to small sample size. Their indicative ratios are 9.88, 5.42 and 4.58 respectively.

3http://it-jobs.fins.com/Articles/SB130221786789702297/Women-Engineering-Graduates-at-15-Year-Low http://www.engineeringschools.com/women-in-engineering.html


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l It may be observed that the southern states have a more balanced gender ratio than theirnorthern counterparts. This is in line with the population gender ratios across the nation,where northern India has higher male-female ratio than southern India. Kerala emergesas an outlier, being the only state having more females than males in engineeringcolleges.

l The regional comparison4 is shown in Fig. 3.

Fig. 3. Male-Female Ratio across Regions

An analysis was done to identify the states where the population MFR was not in line withthat of engineering campuses. Such a comparison is necessary to acquire some interestinginsights: in which states, inspite of a lower female to male ratio, more females go toengineering schools; and for which states, even though the female to male ratio is morebalanced, lesser females end up becoming engineers. Given that the population MFR andengineer MFR are quite different in magnitude, a direct correspondence can't be hypothesized.

However, a high correlation between population and engineer MFR should indicate thatsimilar causes are responsible for both.

A scatter-plot of engineering population MFR vs. total population MFR (data from Census2011) is shown in Fig. 4. Engineering MFR vs. Population MFR shows a correlation of a0.34, whereas after removing the three outliers, the correlation shifts to 0.58. This showsthat the total population MFR and engineer MFR do have some common variance andprobably some common causes. But given that the correlation is only moderately high, itshows there are independent factors influencing the two ratios.

It can be observed that even though Bihar, Jharkhand and Gujarat have a moderate population

MFR as compared to other states, these states possess a very high engineering MFR. Thissuggests that for some reason, fewer females become engineers in these states with respectto their population statistics. On the other hand, Delhi and Haryana, even though they havea moderately high MFR, have more females becoming engineers. The reasons for such avariance are beyond the scope of this report, which could be lower education levels forgirls, socio-economic considerations, etc.

4States included in each region are listed in Appendix, Section A.


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Fig. 4. Scatter-Plot of Engineering Population MFR vs. Total Population MFR

(b) Employability by Gender

The analysis shows that employability for males and females is almost equal, with themaximum difference being a single percentage point for IT Services and KPO. Theemployability of males vs. females is depicted in Fig. 5.

Sector Males Females Graph

IT Services 17.81% 16.75%

IT Product 2.88% 2.29%

KPO 9.63% 8.41%

Hardware Networking 36.51% 36.69%

BPO 40.57% 40.91%

Fig. 5. Employability - Males vs. Females

This slight difference in the employability of males vs. females is majorly due to thedifference in Quantitative Ability scores (see Fig. 6 for average AMCAT scores of males vs.females). The 35-point difference in scores corresponds to 12 points of percentile difference.Though these results show the same trends as observed globally, they need to be interpretedfrom a nuanced perspective, given the debate on the bias of standardized testing scoreswith regard to gender. Note that no significant difference in scores is observed in any othermodules.


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Gender Males Females Difference Graph

English 474 474 0

Quantitative Ability 505 470 35

Logical Ability 461 459 2

Computer

Programming 413 406 7

Fig. 6. Average AMCAT Scores - Males vs. Females

Inspite of the equal employability of males vs. females, the ratio of males-females insoftware industry is not same as that in campuses. Industry Statistics in 2009 showed anMFR of 2.33 for IT services. This is higher in comparison to the ratio found in engineeringcampuses. This shows that fewer proportion of female engineers are employed in the ITindustry as compared to males. The reasons for thisan analysis of which is beyond thescope of the reportcould be many, such as lower proportion of females opting for aprofessional career; females not being comfortable with relocation; preference of males bycorporations; biases in hiring processes; etc.

In summary, we find that the ratio of male-to-female engineers is 1.96, which is almosttwice the population ratio (1.06), but much lower than that of other countries such asUnited States of America (4.61). It was found that states with higher male-to-female engineerratio also show high population gender ratio, indicating that both these factors may havecommon influence/cause. Finally, the employability of male and female engineers is similar,yet the current ratio of employed males to females in IT industry is higher than that of theengineering population.


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III. Employability by Region

It is important to understand how employability varies by region. Do the demographic factors

of a region influence its employability? Do certain cities exhibit very different employabilitypatterns than their state? This section looks at employability percentages by grouping campuses

(and students' permanent address) by their region, the regions being defined according to different

demographic parameters. In cases where significant differences emerge, an attempt is made to

understand the causes. Very likely, the observation of these differences will prompt other studies

to find the causes for these differences, leading to proposals of intervention.

Herein is studied the employability by tier of city, across states, and the employability variation

between metros and non-metros and some key large cities.

(a) Employability by Tier of Cities

It may be argued that colleges located in Tier 1 cities provide better exposure to students.

They may also be the preferred destination for students who have the luxury of choice (and

are hence academically superior) and probably the first choice for candidates permanently

residing in Tier 1 cities. Tiers were allocated to cities according to population, with the

following benchmark (Table 1):

Table 1. Tier of Cities

Tier Population

1. Greater than 25 lakh

2. 5-25 lakh

3. 0-5 lakh

For the analysis, the top 100 campuses were removed from the data set, since these have

their own brand presence attracting students from across the country, and are therefore

outliers in their respective cities. Most of these colleges are the IITs and the NITs, which

source candidates through a nationwide exam.


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The results of the analysis are presented in Fig. 7.

Sector Tier 1 Cities Tier 2 Cities% decrease

Tier 3 Cities% decrease

(T1 to T2) (T2 to T3)

IT Services 17.23% 16.53% 4.06% 12.29% 25.65%

IT Product 2.48% 2.02% 18.55% 1.54% 23.76%

BPO 41.23% 40.38% 2.06% 35.64% 11.74%

KPO 9.02% 7.99% 11.42% 6.13% 23.28%

Hardware Networking 36.93% 36.26% 1.81% 30.77% 15.14%

Fig. 7. Employability across Tier 1, Tier 2 and Tier 3 Cities

One may observe a consistent drop in employability in all sectors according to the tier ofcity of the campus location. Whereas the difference in employability from Tier 1 to Tier 2is generally low, the decrease from Tier 2 to Tier 3 city colleges is drastic. Among differentsectors, the drop in employability from Tier 1 to Tier 2 cities is maximum in the IT productsand KPO sector. This shows that when higher-level skills are required (English, in case ofKPOs, and technical ability in case of IT Products), there is a larger variation between talentquality in Tier 1 and Tier 2 cities. On the other hand, requirement of a lower skill-leveltempers this difference.

The employability in different sectors apart from IT Services is quite similar in absoluteterms across cities. This clearly shows that Tier 2 and Tier 3 cities cannot be neglected froma recruitment perspective. The data shows that at least one out of every six engineeringcolleges is in a Tier 3 city. This means that at least 12% of engineers employable in ITServices are in Tier 3 cities - an absolute number of approximately 13,000. These candidates

could possibly fill up entry-level hiring needs of several IT Services companies.The study investigated the skills deficient among students in Tier 3 cities (see Fig. 8).Contrary to popular opinion, English language skills do not create the major difference inemployability. It is rather the quantitative ability and analytical skills, which make thesestudents ineligible for employment. This points towards better teaching practices throughproblem solving and analysis. It is also surprising to see that the difference in ability inComputer Programming and Algorithms is not too much. Teaching in colleges across tiersof cities though similar, but is inadequate as far as Computer Programming and Algorithmsis concerned.


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AverageTier 1 Tier 2 Tier 3 Diff. Btw. Diff. Btw.

GraphScores

Cities Cities Cities Tier 1 & Tier 1 &

Tier 2 Tier 2

English 476 467 455 9 12

Quantitative

Ability 486 485 459 1 34

Logical

Ability 456 456 430 0 26

Computer

Programming 405 402 391 3 11

Fig. 8. Average Scores across Tier1, Tier2 and Tier 3 Cities

(b) Employability across States

The research looked at the employability percentages according to states where the differentengineering campuses are located. The employability percentage for different states for ITServices is shown in Fig. 9:

Fig. 9. Employability in IT Services across States and Union Territories.

(Some states omitted due to low sample size)

The following may be observed through this data:

l Looking at the employability across states and UTs, it is observed that employability inIT services companies is highest in North, followed by East, then West, and then South.Delhi and Bihar-Jharkhand emerge as states with the highest employability.

l Delhi has emerged as an education hub with high standards of education at all levels,attracting the best minds from across the country. Whereas Bihar-Jharkhand may seemparadoxical, one may understand this trend by the high self-selection effect. Bihar andJharkhand, put together, have around 35 engineering colleges as compared to 70-80


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engineering colleges in any similarly sized state. This leads to a fierce competition forengineering education and only the best end up getting into engineering campuses,majority of which are run by the government. Contrast this with Uttar Pradesh(300+engineeringcolleges), Andhra Pradesh (700+ engineering colleges) or Tamil Nadu(~600engineering colleges), where engineering colleges are unable to completely filltheir seats.5

Explanation: Apart from other factors, it can be hypothesized that just the sheer number ofengineering colleges in a state negatively influences the percent employability. This hypothesisis inspired by Kenneth Arrow's idea of higher education being a filter. To check thishypothesis, the relationship between the percent employability and the number of engineeringcolleges in each state was analyzed. A scatter plot between employability percent andlogarithm of number of colleges is shown in Fig. 10:

Fig. 10. Scatter Plot between Employability Percent and Logarithm of Number of Colleges

Interestingly, a very high correlation of 0.834 was found between IT services employabilityand the number of colleges in the state. If the two outliers are removed, the correlationbecomes 0.91! This means that employability falls logarithmically with the increase innumber of colleges in a state. Further, the result is not improved by normalizing the countby population or size of the state. The simplicity of the result is indeed intriguing, and

shows how adding more engineering colleges leads to a fall in the percentage of employableengineers.

Even though the number of colleges is a major factor in guiding employability in a particularstate, it does not explain it completely. For instance, even though Tamil Nadu has lower

5http://www.thehindu.com/news/states/tamil-nadu/article2337603.ece.http://studyplaces.com/articles/411338-1-2-lakh-mba-b-tech-seats-remain-vacant-in-up-technical-instituteshttp://ibnlive.in.com/news/engineering-seats-remain-vacant/191073-60-114.html


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number of engineering colleges (~600) as compared to Andhra Pradesh (~750), it has alower employability percentage (8.33 as compared to 12.73). Similarly, Delhi has morecolleges than Bihar, but a higher employability. Employability for a state is a complex

interplay of several socio-economic and developmental factors. However, this does call fora greater thrust on improving the quality of engineering education than just the number.

Analysis of IT product sector employability: The IT products employability was analyzedto find out whether the same trends and hypotheses are valid for this sector too(see Fig. 11).

Fig. 11. Employability in IT Product Companies across States and Union Territories

The observations are as follows:l It can be observed that the major trends remain similar to those in IT services, though

there are some minor differences.

l Three states, i.e., Uttarakhand, Kerala and Chhattisgarh, show largely different rankswith respect to employability in IT services and IT product companies. Whereas Keralaand Chhattisgarh better their position with regard to IT Product employability, Uttarakhandslips down. This is strongly indicative of better education within colleges in Kerala&Chhattisgarh.

l The correlation of logarithm of number of campuses to employability is 0.72,downfrom 0.83 in the case of IT services companies. One hypothesis is that whereas thequality of intake is a major factor in IT services employability, it is tempered by qualityof education at college-level in case of IT Product sector, which requires considerableknowledge of computer science. The number of colleges being a proxy for intake qualityhas a lesser impact on IT product employability, as compared to IT services employability.

Employability in other sectors across states shows similar trends. Their respective trends aredocumented in Appendix B.


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(c) Employability in Metros vs. Non-Metros

The research analyzed employability of candidates coming out of colleges in metro cities,in comparison to those in non-metro cities. The general view remains that colleges in

metros produce more employable candidates due to better exposure and education, whichexplains why parents often prefer colleges in metros as opposed to others in making anadmission decision. The employability figures based on the analysis are reported in Fig. 12:

Sectors Metros Non-Metros % Decrease Graph

IT Services 18.87% 16.74% 11.29%

IT Product 2.91% 2.56% 12.03%

KPO 10.41% 8.62% 17.20%

HardwareNetworking

37.71% 36.00% 4.53%

BPO 41.88% 40.08% 4.30%

Fig. 12. Metro vs. Non-Metro Colleges

As it may be noted, even though colleges in non-metro cities have lower employability, thedifference is not too much. Only the decrease in employability in KPOs is much higher,for which English comprehension and writing skills are very important. This is in line withthe earlier analysis which showed that there wasn't much difference in the employabilityof candidates from colleges in Tier 1 and Tier 2 cities.

Sectors Metros Non-Metros % Decrease Graph

IT Services 20.18% 17.63% 12.64%

IT Product 3.85% 2.78% 27.79%

KPO 12.02% 9.25% 23.04%

Hardware

Networking35.97% 36.90% 0.19%

BPO 39.31% 40.89% 0.76%

Fig. 13. Metros vs. Non-Metros: Employability by city of permanent residence

In contrast, when the employability of candidates with permanent residence in metros andnon-metros was compared (see Fig. 13), the trends came out to be quite different. Thereis an appreciable gap in employability for IT product companies, and the gap in employabilityfor KPOs increases further. There are two potential hypotheses to explain this. Firstly,


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candidates who born and brought up in metros have better exposure to computers and inparticular, computer programming, and thus they are more employable than their non-metro counterparts. If the colleges were imparting computer programming educationadequately, this gap due to intake impact should have narrowed. Secondly, English languageskills are very important for Knowledge Process Outsourcing companies, and candidatesborn and brought up in metros seem to acquire better English skills due to day-to-dayexposure to a larger English speaking population. This clearly shows that students comingfrom non-metros are disadvantaged to a certain extent. Thus, there is a requirement ofbetter school education and exposure to computers and English to students in non-metros.Secondly, colleges need to improve education methodology to be able to erase suchdifferences. On the other hand, as noted earlier, there is no merit to the argument thatcolleges in the metros automatically produce more employable candidates.

(d) Employability in Key Cities

The study also compared employability within students graduating out of different metrocities in the country. The results are reported in Fig. 14.

IT Services IT Product KPO Hardware BPO

Networking

Delhi 39.78 10.91 27.59 53.37 54.78

Kolkata 25.30 4.51 14.98 44.33 47.31

Bengaluru 16.79 2.93 8.62 36.59 40.92

Hyderabad 16.52 1.70 8.28 35.94 40.64

Mumbai+Pune 16.12 1.17 7.45 38.34 42.62

Chennai 8.35 0.53 3.40 26.60 32.19

Fig. 14. Employability in different metro cities

The following observations are made:

l The trends are similar to those with regard to employability in states. Delhi (North)shows the highest employability, followed by Kolkata (East) and cities in the West, whilethe lowest employability figures were observed among colleges in Southern cities. Theskew in employability is quite high; for instance, the IT product employability in Delhi


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in as high as 1 in every 9 candidates and as low as 1 in every 200 in Chennai. Eventhough Bengaluru has similar IT services employability as compared to other Southernand Western cities, the city shows much higher employability for IT product companies.This indicates that candidates in Bengaluru do much better at computer programmingand algorithms, even though they show similar English and cognitive skills. This couldbe due to better exposure to computer programming either at home, schools or colleges.

l The reason for this skew in employability is explained again by the trend in number ofcolleges in each of these cities (see Table 2). The proliferation of engineering collegesin Southern and Western India has brought down the employability figures. In comparison,there are far fewer engineering colleges both in Delhi and Kolkata. This is despite thefact that the population of Delhi is much more than Southern cities, being comparableto that of Mumbai (see Table 2).

Table 2: Number of colleges and population in major cities

CityApproximate number of

Populationengineering colleges

Bangalore 78 5,438,065

Chennai (including Thiruvallur) 84 4,616,639

Delhi 35 12,565,901

Hyderabad 86 4,068,611

Kolkata 54 5,138,208

Mumbai and Pune 145 17,277,214

In summary, the study found that employability trends show significant variation withrespect to the location of the campus. Whereas employability percentage was found to besimilar in Tier 1 and Tier 2 cities (classified by population), the employability in Tier 3 citiesfell significantly. The major gap in skills was observed in quantitative ability and logicalreasoning skills, rather than command of the English language. With regard to employabilitypercent in different states, it was found that employability decreases logarithmically withthe number of colleges in the state (in sync with Arrow's hypothesis). Also, whereas therewas no appreciable difference in employability of students coming out of colleges in metrosand non-metros, there was a significant difference in employability of candidates born or

living in metros, versus the rest. This clearly shows that candidates who have spent asignificant part of their life time in metros get better exposure to English and computereducation, helping them become more employable.

The key learning of this study is that as a Nation, we need to emphasize more on qualitythan number of colleges.


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IV. Employability Variance in Campuses

It is known that the quality of intake, education and outcome varies dramatically across the

3,000+ engineering campuses in India. It is pertinent to understand how much variation is there.Is it that most colleges have similar quality, with a few outliers, or whether there is a largevariance? What are the reasons for these variations? This section looks into such questions.

(a) Employability in top-tier Campuses vs. the Rest.

The study analyzed employability of campuses according to their ranking (as reported inpopular media). Campuses which fell among the top 100 on the list (according to variouscredible public surveys) were segregated and their employability was compared with therest of the campuses. The results are depicted in Fig. 15. The following trends wereobserved.

(i) The employability for IT product companies falls by four times from 8.44% to 2.17%,where as the employability in IT services and KPO falls by almost twice (30.95% to16.32%) and two-and-a-half times (21.69% to 8.22%), respectively. The fall is not sosteep when it comes to BPO and Hardware Networking.

SectorTop 100 Rest of the

GraphColleges Colleges

IT Services 30.95% 16.32%

IT Product 8.44% 2.16%

KPO 21.69% 8.22%

Hardware 45.05% 35.88%Networking

BPO 47.29% 40.18%

Fig. 15. Employability: Top 100 Colleges vs. Rest

(ii) Given that the ratio of the number of top 100 campuses to the rest is more than 10, onecan conservatively estimate that more than 70% of the employable engineers for ITproduct sector, and more than 80% for IT services and KPO, are in the so-called Tier

2 campuses. According to current trends, IT product and KPO companies do not sourcefrom Tier2 campuses, which creates a large artificial dip in the supply of eligiblecandidates. This is in line with what was reported in the2009 annual employabilityreport by Aspiring Minds.6

6National Employability Report (Aspiring Minds), 2009


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The study also investigated what skills are lacking in students of Tier 2 campuses (seeFigure 16). There is a gap of 22, 16 and 22 percentile points in English Communication,Logical Ability and Computer Programming, respectively, whereas the gap in Quantitative

ability is 27 percentile points (see Fig. 16). This clearly shows that the maximum effortis required to hone mathematical skills of the students, whereas consistent effort isneeded in other areas as well.

Fig. 16. Skill Gap: Top 100 vs. Other Campuses

(b) Employability in Govt. and Private Colleges

The research also analyzed the difference in employability between government and private

colleges (see Fig. 17). Interestingly, an appreciable difference in employability was observed,with students at government colleges doing much better than those in private colleges. Thedecrease in employability was around 35.1% for IT services and 58.06% for IT productcompanies.

Sector Govt. Pvt. % Decrease Graph

IT Services 25.67% 16.66% 35.09%

IT Product 5.64% 2.36% 58.06%

KPO 16.23% 8.59% 47.07%

Hardware 42.61% 36.02% 15.46%Networking

BPO 45.38% 40.30% 11.19%

Fig. 17. Employability: Govt. vs. Private Colleges


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Fig. 18 depicts the difference in skills of students from government and engineering colleges.It was observed that there is significant difference in skills in all areas, with the maximumgap being in quantitative ability. This clearly indicates that government colleges attractbetter students and probably impart better education as well. This is in contrast to thetrends worldwide, where some of the best institutions (such as MIT and Stanford) areprivate.

Average Govt. Pvt.Difference GraphScores Colleges Colleges

English 504 471 33

Quantitative

Ability541 487 54

Logical Ability 485 453 32

Computer

Programming443 403 40

Fig. 18. Average Scores: Govt. vs. Private Colleges

(c) Employability Variance across Colleges

In this section, we study the distributional properties of employability across colleges. Theemployability of each college for the IT services industry was determined and arranged in

order of its rank (see Fig. 19).

Fig. 19. Employability Percentage of Students across Colleges for IT Services Companies


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The following observations can be made:

l The best of colleges have employability as high as 50%, whereas the bottom 30 percentilecolleges have employability of less than 10%. Around only 35% colleges have

employability more than the average figure of 17%, whereas the majority (65% colleges)has it close to or lower than 17%. This clearly shows that there are a small number ofcolleges with very high employability followed by a high number of colleges with verylow employability. Thus, even though the mean employability is ~17%, the medianemployability is much lower.

l Some simple calculations show that average employability in colleges in the top 30percentile (around 750 colleges) is 28%, whereas it is around 12% for the rest of thecolleges. This implies that almost an equal number of employable candidates are therein the top 750 campuses as compared to the rest (see Table 3. Values for IT productcompanies are also given). Consider that no IT company in India has a campus recruitmentprogram beyond the top 750 campuses, which shows that almost half of the employablepool, i.e., around 50,000 employable candidates in the country, is invisible to recruiters.

Table 3. Top 30 percentile campuses vs. the rest

Top 30 percentile campuses Rest of the campuses

(~1750) (~750)

IT Services Employability 28% 12%

Percent Employable Pool 50% 50%

IT Product Employability 5.81% 0.97%

Percent Employable Pool 72% 28%

The following conclusions are drawn:

l One may observe that the employability falls drastically toward the beginning, and moregracefully toward the middle. This clearly shows that there are certain colleges whichhave excellent employability; however, other colleges even close in ranking show adrastic drop in employability. This is in line with the perception that certain colleges,such as the IITs and state-run colleges, are much better than other colleges, which mayranked just as highly. This is not a healthy trend, implying that deserving students inthese other colleges find themselves cut off from better opportunities.

To further analyze this hypothesis, the study looked at the employability for the IT

product sector. One would expect to see a steeper trend, since IT product employabilityis more strongly influenced by college education quality (rather than just intake) ascompared to employability for IT services companies. The variation is shown in Fig. 20.


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Fig. 20. Employability Percentage of Students across Colleges for IT Product Companies

One can observe that IT product employability falls to about 8% at Rank 10, down from

27% at Rank 1, which is a fall of three times. On the other hand, for IT servicescompanies, this fall was only around 1.5 times. Similar trends continue throughout thegraph and confirm the hypothesis that the quality of education falls steeply as one goesdown the list of the so-called top colleges, with close neighbors having substantialdifferences in quality.

Some other observations for IT product employability are as follows:

l The best of colleges have employability as high as 27%, whereas the bottom 45 percentilecolleges languish at less than 1%.This figure degrades to zero employable candidates forthe bottom 20 percentile colleges. Around only 30% colleges have employability morethan the average figure of 2.7%, whereas the majority (70%) colleges have it close to

or lower than the average figure.In summary, the study found that the ratio of employability in top 100 colleges versusthe rest is between two to four times depending on the sector. Inspite of this, more than70% of employable candidates for any sector are in campuses other than the top 100.Government-run colleges show much higher employability than private colleges, withskill differences in all areas, including English, cognitive skills and domain skills. Withregard to employability distribution among campuses, the quality of education fallssteeply among the top-ranked colleges, which implies that colleges that are neighborsin rank have very different quality of education. There are a large number of collegeswith exceptionally low employability: bottom 45 percentile campuses have less than 1

in 100 candidates employable in an IT product company, and the bottom 20 percentilecampuses have no candidate employable in the IT product sector. Finally, we find that50% of employable candidates for IT services companies and 28% of employablecandidates for IT product companies are enrolled in campuses ranked beyond the top750, thus forming an invisible pool to most employers in India.


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A. States Included in each Region

The report provides various comparisons across regions. For these

comparisons, the country was divided into four major regions: North,East, West and South. The constitution of each of these regions is givenbelow:

Table 4. Categorization of states across different regions

North East West South

Delhi Assam Gujarat Andhra Pradesh

Haryana Chhattisgarh Maharashtra Karnataka

Himachal Meghalaya Rajasthan Kerala

Pradesh

Jammu & Orissa Goa Tamil Nadu

Kashmir

Jharkhand Tripura

Madhya West Bengal

Pradesh

Punjab

Uttar Pradesh

Uttarakhand

App

end

ix


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B. Employability by State

Employability variation of the state of campus residence has been explored in detail for IT

services and IT product companies in Chapter VI. Here, the trends for the Knowledge ProcessOutsourcing Sector, Business Process Outsourcing Sector and Hardware and Networking companiesare reported. They follow similar trends as discussed in the chapter, and are presented here forcompleteness.

Fig. 21. Employability in KPO Companies across States and Union Territories

Fig. 22. Employability in Hardware Networking Companies across States and Union Territories


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Fig. 23. Employability in BPO Companies across States and Union Territories


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