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Business News/ Industry / Infotech/  Degree in hand, a generation of engineers looks for alternatives
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Degree in hand, a generation of engineers looks for alternatives

The IT industry cannot employ all the engineers that India’s colleges are churning out

India trains 1.5 million engineers every year, more than what the US and China jointly produce, according to an April 2013 report. Photo: Hemant Mishra/ Mint (Hemant Mishra/ Mint)Premium
India trains 1.5 million engineers every year, more than what the US
and China jointly produce, according to an April

2013 report. Photo: Hemant Mishra/ Mint

(Hemant Mishra/ Mint)

Bangalore: For Rajeev, a 23-year-old engineering student from Varanasi in Uttar Pradesh, planning for a career in India’s $108 billion (around 6.3 trillion) software industry began when he was a teenager.

“Where I come from, it’s popular to prepare for competitive exams and aspire to become an IAS (Indian Administrative Service) officer, or even attempt to become a probationary officer with a public sector bank," said Rajeev, who will graduate next year in computer science from a top engineering college in Bangalore. He didn’t want to use his second name.

The planning gathered pace after Rajeev watched a YouTube video of the TEDIndia event in November 2009 that showcased the training facilities at Infosys Ltd, India’s second biggest software firm.

“There was a bowling alley, movie theatres inside a geodesic dome and hundreds of fresh graduates walking around. I envied them and decided to pursue a career in IT (information technology)," Rajeev said. He persuaded his parents to enrol him in a course that prepares students for the combined entrance test to more than 3,000 engineering colleges in India. After a year of preparation, he passed the exam and gained admission to the four-year bachelor of engineering course that he will complete in 2014.

That’s about as far as the plan looks like it will work because the world of the IT engineering graduate has changed dramatically since 2009.

Rajeev will find himself among a million fresh engineering graduates next year, most of whom won’t have a job waiting for them, unlike a few years ago. Meanwhile, his seniors who graduated this year have come to the disappointing realization that an offer letter no longer guarantees a job.

Rajeev has been forced to switch his career aspiration.

“I plan to sit for the probationary officer exams conducted by the State Bank of India because it doesn’t look like we will go anywhere with this degree," Rajeev said in a phone interview on Monday.

The IT industry can’t employ all the engineers that India’s colleges are churning out as they themselves learn to cope with a leaner, meaner business climate. At least two generations of engineering students, including those graduating this year and the ones who passed last year, are realizing they don’t have anywhere to go. Only some of them, about 188,000, are expected to find jobs with India’s software firms. Until last year, the IT industry hired about 235,000.

But the challenge is not just demand, it’s also the quality of the graduates. According to an Aspiring Minds study in 2012, less than one-fifth of India’s engineers have the necessary skills needed at a top IT firm.

Already, India trains 1.5 million engineers every year, more than what the US (0.1 million) and China (1.1 million) jointly produce, according to an April 2013 report, How Many Engineers are Required to Change a Light Bulb?, by Akhilesh Tilotia and Kawaljeet Saluja of Kotak Institutional Equities, a brokerage firm. (Training refers to intake, rather than graduates.)

“We believe India is training more than double the requirement of its graduates every year; this is assuming that India is indeed even able to generate the 11-12 million overall employment opportunities every year," the Kotak analysts said.

The crisis

Over years, Tata Consultancy Services Ltd (TCS), Infosys and Wipro Ltd feverishly built their so-called pyramid model that involved hiring thousands of fresh engineering graduates annually and quickly deploying them on software projects to ensure overall costs remained low. The model depended on the traditional billing of services offered to customers such as General Electric Co. on a per-person, per-hour basis.

In order to make sure this pyramid was kept supplied, the number of engineering colleges in the country doubled to 3,393 by 2012 from 1,668 in 2008.

These colleges are now finding it hard to fill seats as demand slows, according to E. Balagurusamy, former vice-chancellor of Anna University in Chennai. Dozens of such colleges in Coimbatore and other south Indian cities are up for sale, but have no takers, he said.

“When the demand was there, anybody with a building and basic facilities could apply and get an approval to start an engineering college. They never bothered about the demand," Balagurusamy said.

Experts such as Rishi Das, co-founder and chief executive of staffing and recruitment firm CareerNet Consulting, said the government and approving authorities failed to keep track of demand.

“The pyramid model is no longer looking like a pyramid, it’s looking more like an inverted pyramid. Jobs need to be added more at the worker level...the government has actually let everyone down at this level. These guys have been giving out licences to engineering colleges without actually consulting the industry on how many engineers they actually need," he said.

Young people are now more open to looking at jobs in banks and, if they want to stick with engineering, at public sector units such as NTPC Ltd, Indian Oil Corp. Ltd and Bharat Heavy Electricals Ltd, Das said.

“After the sixth pay commission, if you look at the wages, they are also quite good. People are now realizing that since IT has come a full circle, stability is important—the payouts in public sector jobs are also not bad," he said.

Probationary officer jobs in banks are increasingly being filled up by engineering graduates, he said. “There are some 40,000-50,000 jobs available for probationary officers in banks across the country and the advantage they have is that for these positions, they look for people who are strong in math, high aptitude—so quite a few engineers end up landing good jobs in that area," Das said.

Trapped in transition

A generation of engineering students set to graduate next year has got trapped in Indian IT’s transition and will soon be burdened with unemployment and education loans as they face increased social pressure to find a job.

Amith R., 21, who hails from Shimoga district in Karnataka and a final year student in the electronics and communications department of Dayananda Sagar College of Engineering, is concerned about his debt. He’s taken a loan of about 5 lakh at 11% interest.

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Updated: 20 Jun 2013, 12:27 AM IST
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