Edunology - Saumya Aggarwal

Are engineering grads readily employable?

How many times we have came across the quote - "vo engineering kar raha hai". It means he is studying engineering. Literally, everyone is pursuing engineering in India it seems thanks to exponential growth in engineering colleges and IT companies recruiting in masses.

I tried to analyse how once a novel and rare profession has lost its sheen now. Here are my findings:

- Growth of "advertised" engineering institutes:

Institutes spun fantastic tales about multinational corporations falling over each other to recruit its students.  They rarely focus on  quality education and building skill set, grooming students. It is all about fancy hoardings and large ads in newspapers.

PurpleLeap, a Pearson and Educomp company, released the findings of its survey of 34,000 students from 198 engineering colleges across the country: only one out of ten graduates from Tier 2, 3 and 4 colleges is readily employable, and one-third are unemployable even after training.  

- IT Companies recruiting like cats and dogs:

IT companies, according to analysis done by Nasscom and Evaluserve, spend $1.2 billion every year on training. Had the engineering schools churning quality grads, this money would go straight to their bottom-line. Infosys's Mysore campus has trained 100000 fresh graduates so far, at a cost of $6000-7000 per employee.   That's a whopping $600-700 million knocked out of the company's profits over ten years.

Since companies are recruiting, thanks to some pathetic recruiting HR executives, students are getting paid easily. Starting salaries are over INR 350000 which is more than pocket money at young age of 20-21.

- Simple Economics: Demand & Supply:

There are 1.5 million engineering seats in India today, up from 500000 five years ago. This is way beyond the demand for engineers. Himanshu Aggarwal, the CEO and co-founder of Aspiring Minds, says that the IT sector absorbs around 200,000 engineers in a year, and the demand from the other sectors can't add up to more than that.

Fortunately or unfortunately, many of unemployed students get onto B schools which are again in plenty in India. Few join non engineering jobs and others continue family businesses as engineering degrees are good for marriage purpose.

- Return on Investment:

College perspective - An engineering college can cost more than INR 150 million and if my cash flows are correct (have accounted for capitation fees as well) then payback happens within 5 years.

Parents perspective - Student can payback within 2 years if he/she gets a job otherwise higher education is deemed as prestigious and is matter of social symbol. If nothing, he can do MBA for sure and then ROI calculations get further extended.

Student perspective - None, they don't have a perspective on ROI. They are running in mad race. 

Being an engineer, I understand these parameters and have been on receiving end. Hopefully, society will grow up and change engineering trend to something better.