National Employability Report Engineers 2011

National Employability Report
Engineering Graduates

Annual Report
2011

Aspiring Minds National Employability Report Engineering Graduates, 2011 Page 1

Table of Contents

Introduction .................................................................................................................................................... 2
Executive Summary ......................................................................................................................................... 4
Methodology ................................................................................................................................................... 6
I. Employability by Sectors ......................................................................................................................... 7
II. Employability by Gender ....................................................................................................................... 10
a. Gender Ratio in Higher Education .................................................................................................... 10
b. Employability by Gender ................................................................................................................... 13
III. Employability by Region .................................................................................................................... 15
a. Employability by Tier of Cities ........................................................................................................... 15
b. Employability across States ............................................................................................................... 18
c. Employability in Metros vs. Non-Metros .......................................................................................... 21
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 PrivateColleges ...................................................................................... 26
c. Employability Variance across Colleges ............................................................................................ 28
Appendix ....................................................................................................................................................... 31


Introduction

The importance of higher education in relation to the progress of the individual and the nation
cannot be overstated. In todays 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 means of
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
affecting the 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:
How many employable females vs. males graduate every year?
Which regions exhibit high employability, and why?
How different is employability in private and government colleges?


Are most colleges producing the same percentage of employable candidates, or is there a
wide variation?
Such results are indispensible to enable targeted intervention in different groups and kinds of
colleges. At the same time, it is a first step toward hypothesizing the causes for low
employability.
Such an analysis allows one to measure some key drivers of economic and intellectual growth.
This measurement provides a tracking mechanism to see how India is progressing year on year
toward building a powerful, enlightened and equitable nation. Aspiring Minds is committed to
actively provide feedback about employability and higher education to all stakeholders through a
yearly report card.
With commitment to the development and progress of higher education in India!
Varun Aggarwal
Co-founder and Director
Aspiring Minds Assessment Pvt. Ltd.


Executive Summary

The key findings of the present study are as follows:
The percentage of ready-to-deploy engineers for I T 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 females in 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 existing institutions.


The long tail of employable engineers is getting missed out by corporations.

The report found that the top 100 colleges have higher employability as compared 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 found that the quality of
education falls steeply among the top-ranked colleges, implying that even colleges ranked
very closely have very different quality of education. A large number of colleges are at
exceptionally low employability: bottom 45 percentile campuses have less than 1 in 100
candidates employable in an IT product company, while the bottom 20 percentile campuses
have none. This means there is an urgent need to reduce the quality-gap between colleges and
get them above a minimum threshold.


Methodology

The report is based on a sample of more than 55,000 engineering students 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: Aspiring Minds
Computer Adaptive Test, which is Indias largest and only standardized employability test.
AMCAT covers all objective parameters for determining employability in the IT/ITeS sector such
as English communication, Quantitative aptitude, problem-solving skills and Computer Science
and Programming skills. The test was conducted under a proctored and credible environment
ensured by Aspiring Minds.
Employability has been quantified based on the benchmarking studies done 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 and recruitment
solutions. The benchmark for employability in a profile and sector is defined by a theoretical
understanding and empirical validation of the knowledge, cognitive skills and domain expertise
required. The benchmarks established for different profiles ensure both elimination of
unsuccessful candidates for a job (type I error) and inclusion of all candidates who will be
successful in the given job (elimination of type II error). The same has been validated among
multiple companies in various sectors.
Together with the AMCAT scores, the various demographic details of the candidates are also
captured by Aspiring Minds testing platform, which has enabled a comprehensive and
meaningful analysis provided in the report.

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


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 the
percentage of employable engineers across the nation. The criteria for employability are based on
the studies conducted with various corporations in these sectors, benchmarking their current
employees in various profiles through objective assessment based on AMCAT and establishing
feedback through on-job performance data. These benchmarks serve as a standard for several
large-sized companies across the nation.
Sector Employability Graph
IT Services 17.45%

IT Product 2.68%
Knowledge Process
Outsourcing
9.22%
Hardware
Networking
36.57%
Business Process
Outsourcing
40.69%
Figure 1: Employability of Engineering Graduates in Different Sectors
The employability of engineering graduates in different sectors is shown in Figure 1. The
following observations can be made:
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 understanding
of computer programming and algorithms. But the study found that the candidates strongly
lacked the required skills: around 92% of graduating engineers do not have the required
programming and algorithm skills required for IT product companies, whereas 56% show lack
of soft-skills and cognitive skills. One may note that the skills required by the IT product

2
Calculated across only those branches that have computer programming as a subject.
17.45
2.68
9.22
36.57
40.69
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20.00
25.00
30.00
35.00
40.00
45.00
IT Services IT Product KPO Hardware
Networking
BPO
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Sectors


companies at the entry-level are very much a part of the curriculum of engineering colleges,
which is a worrying sign for higher education.
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 IT services
companies, where the candidate is not expected to already possess the required software 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 in technical and soft skills.
This requires both a basic command of language and technical 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 are trainable into software engineers
within a period of 3 to 6 months, is alarming to say the least.
The research further shows that approximately 54% engineers are rejected because they are
not soft-skill trainable in a short period of time, whereas around 46% lose on technical
trainability.
Apart from focus on core technical skills, technical trainability can be improved by adopting a
quantitative approach to engineering problems. Bridging courses to hone English skills of the
candidates is a definite step toward improving soft-skills trainability.
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 effectively as
soon as possible, typically in a months 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.


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.
Hardware and Networking Profiles: This sector comprises roles involving technical support
and network management. Candidates employed in this sector manage hardware and networks
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.
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.


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 womens position in the higher education and technical revolution in
India. It is also important to understand whether there is any evidence for the traditional belief
that men make for better engineers!
This section tries to answer two questions:
How many women are opting for higher education in the technical domains in India?
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 make it
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 ratio as compared
to the United States. A 2009 study suggested that the ratio of male to female engineers in USA
was as drastic as 4.61! Among different branches, it was found that computer science and
electrical engineering disciplines had the least number of females.
3

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


Figure 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.
The gender-ratio changes with respect to the state of the campus were studied. The MFR (Male to
Female Ratios) are shown in Figure 2.
It may be observed that the southern states have a more balanced gender ratio than their
northern 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 emerges as an
outlier, being the only state having more females than males in engineering colleges.
The regional comparison
4
is shown in Figure 3.

Figure 3: Male-Female Ratio across Regions

4
States included in each region are listed in Appendix, Section A.
7.58
4.61
3.95
3.81
3.12
2.85
2.48 2.45
1.86 1.85 1.76 1.70
1.56 1.53 1.51 1.44
0.85
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2.00
3.00
4.00
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Male:Female Ratio
2.71
1.88 1.88
1.49
0
0.5
1
1.5
2
2.5
3
North East West South
R
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Zone


An analysis was done to identify the states where the population MFR was not in line with that of
engineering campuses. Such a comparison is necessary to acquire some interesting insights: in
which states, inspite of a lower female to male ratio, more females go to engineering schools; and
for which states, even though the female to male ratio is more balanced, lesser females end up
becoming engineers. Given that the population MFR and engineer MFR are quite different in
magnitude, a direct correspondence cant be hypothesized. However, a high correlation between
population and engineer MFR should indicate that similar causes are responsible for both.
A scatter-plot of engineering population MFR vs. total population MFR (data from Census 2011)
is shown in Figure 4. Engineering MFR vs. Population MFR shows a correlation of a 0.34,
whereas after removing the three outliers, the correlation shifts to 0.58. This shows that the total
population MFR and engineer MFR do have some common variance and probably some common
causes. But given that the correlation is only moderately high, it shows 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. This
suggests that for some reason, fewer females become engineers in these states with respect to their
population statistics. On the other hand, Delhi and Haryana, even though they have a moderately
high MFR, have more females becoming engineers. The reasons for such a variance are beyond
the scope of this report, which could be lower education levels for girls, socio-economic
considerations, etc.


Figure 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 the maximum
difference being a single percentage point for IT Services and KPO. The employability of males
vs. females is depicted in Figure 5.

0
1
2
3
4
5
6
7
8
9
0.9 0.95 1 1.05 1.1 1.15 1.2 1.25 1.3
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M
F
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Population MFR

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%
Figure 5: Employability Males vs. Females
17.81
2.88
9.63
36.51
40.57
16.75
2.29
8.41
36.69
40.91
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50.00
Networking
BPO
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Sectors
Males
Females
Bihar +
Jharkhand
Rajasthan
Maharashtra
Delhi
Gujarat
Haryana


This slight difference in the employability of males vs. females is majorly due to the difference in
Quantitative Ability scores (see Figure 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 interpreted from a nuanced
perspective, given the debate on the bias of standardized testing scores with regard to gender.
Note that no significant difference in scores is observed in any other modules.
Gender Males Females Difference Graph
English 474 474 0

Quantitative
Ability
505 470 35
Logical Ability 461 459 2
Computer
Programming
413 406 7
Figure 6: Average AMCAT Scores Males vs. Females
Inspite of the equal employability of males vs. females, the ratio of males-females in software
industry is not same as that in campuses. Industry Statistics in 2009 showed an MFR of 2.33 for
IT services. This is higher in comparison to the ratio found in engineering campuses. This shows
that fewer proportion of female engineers are employed in the IT industry as compared to males.
The reasons for thisan analysis of which is beyond the scope of the reportcould be many,
such as lower proportion of females opting for a professional career; females not being
comfortable with relocation; preference of males by corporations; biases in hiring processes; etc..
In summary, we find that the ratio of male-to-female engineers is 1.96, which is almost twice the
population ratio (1.06), but much lower than that of other countries such as United States of
America (4.61). It was found that states with higher male-to-female engineer ratio also show high
population gender ratio, indicating that both these factors may have common 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 the engineering population.
474
505
461
413
474
470
459
406
375
415
455
495
535
English Quantitative
Ability
Logical Ability Computer
Programming
M
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S
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Modules
Male
Female


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 employability patterns
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):
Tier Population
1 Greater than 25 lakh
2 5-25 lakh
3 0-5 lakh
Table 1: Tier of Cities
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.
The results of the analysis are presented in Figure 7.


Figure 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 of city of
the campus location. Whereas the difference in employability from Tier 1 to Tier 2 is generally
low, the decrease from Tier 2 to Tier 3 city colleges is drastic. Among different sectors, the drop
in employability from Tier 1 to Tier 2 cities is maximum in the IT products and KPO sector. This
shows that when higher-level skills are required (English, in case of KPOs, and technical ability
in case of IT Products), there is a larger variation between talent quality in Tier 1 and Tier 2 cities.
On the other hand, requirement of a lower skill-level tempers this difference.

Sector Tier 1 Cities
Tier 2
Cities
% decrease
(T1 to T2)
Tier 3
Cities
% decrease
(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%

17.23
2.48
41.23
9.02
36.93
16.53
2.02
40.38
7.99
36.26
12.29
1.54
35.64
6.13
30.77
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IT Services IT Product BPO KPO Hardware
Networking
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Sectors
Tier 1 Cities
Tier 2 Cities
Tier 3 Cities


The employability in different sectors apart from IT Services is quite similar in absolute terms
across cities. This clearly shows that Tier 2 and Tier 3 cities cannot be neglected from a
recruitment perspective. The data shows that at least one out of every six engineering colleges is
in a Tier 3 city. This means that at least 12% of engineers employable in IT Services 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.

Figure 8: Average Scores across Tier1, Tier2 and Tier 3 Cities

The study investigated the skills deficient among students in Tier 3 cities (see Figure 8). Contrary
to popular opinion, English language skills do not create the major difference in employability. It
is rather the quantitative ability and analytical skills, which make these students ineligible for
employment. This points towards better teaching practices through problem solving and analysis.
It is also surprising to see that the difference in ability in Computer Programming and Algorithms
is not too much. Teaching in colleges across tiers of cities though similar, but is inadequate as far
as Computer Programming and Algorithms is concerned.

Average
Scores
Tier 1
Cities
Tier 2
Cities
Tier 3
Cities
Diff. Btw.
Tier 1 &
Tier 2
Diff. Btw.
Tier 2 &
Tier 3
Graph
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
476
486
456
405
467
485
456
402
455 459
430
391
350
400
450
500
550
Ability
Programming
M
e
a
n

S
c
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r
e
Modules
Tier 1 Cities
Tier 2 Cities
Tier 3 Cities


b. Employability across States

The research looked at the employability percentages according to states where the different
engineering campuses are located. The employability percentage for different states for IT
Services is shown in Figure 9:

Figure 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:
Looking at the employability across states and UTs, it is observed that employability in IT
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.
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 seem
paradoxical, one may understand this trend by the high self-selection effect. Bihar and
Jharkhand, put together, have around 35 engineering colleges as compared to 70-80
engineering colleges in any similarly sized state. This leads to a fierce competition for
engineering 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),
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Andhra Pradesh (700+ engineering colleges) or Tamil Nadu (~600engineering colleges),
where engineering colleges are unable to completely fill their seats.
5

Explanation: Apart from other factors, it can be hypothesized that just the sheer number of
engineering colleges in a state negatively influences the percent employability. This hypothesis is
inspired by Kenneth Arrows idea of higher education being a filter. To check this hypothesis, the
relationship between the percent employability and the number of engineering colleges in each
state was analyzed. A scatter plot between employability percent and logarithm of number of
colleges is shown in Figure 10:

Figure 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 employability and
the number of colleges in the state. If the two outliers are removed, the correlation becomes -0.91!
This means that employability falls logarithmically with the increase in number of colleges in a
state. Further, the result is not improved by normalizing the count by population or size of the

5
http://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-institutes
http://ibnlive.in.com/news/engineering-seats-remain-vacant/191073-60-114.html

5
10
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25
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35
40
45
1 1.5 2 2.5 3
%

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Logarithm (Number of Colleges)
Chattisgarh
Orissa


state. The simplicity of the result is indeed intriguing, and shows how adding more engineering
colleges leads to a fall in the percentage of employable engineers.
Even though the number of colleges is a major factor in guiding employability in a particular
state, it does not explain it completely. For instance, even though Tamil Nadu has lower number
of engineering colleges (~600) as compared to Andhra Pradesh (~750), it has a lower
employability percentage (8.33 as compared to 12.73). Similarly, Delhi has more colleges 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 for a greater thrust on
improving the quality of engineering education than just the number.
Analysis of IT product sector employability: The IT products employability was analyzed to
find out whether the same trends and hypotheses are valid for this sector too (see Figure 11).

Figure 11: Employability in IT Product Companies across States and Union Territories

The observations are as follows:
It can be observed that the major trends remain similar to those in IT services, though there
are some minor differences.
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Three states, i.e.,Uttarakhand, Kerala and Chhattisgarh, show largely different ranks with
respect to employability in IT services and IT product companies. Whereas Kerala and
Chhattisgarh better their position with regard to IT Product employability, Uttarakhand slips
down. This is strongly indicative of better education within colleges in Kerala& Chhattisgarh.
The correlation of logarithm of number of campuses to employability is -0.72,down from -
0.83 in the case of IT services companies. One hypothesis is that whereas the quality of intake
is a major factor in IT services employability, it is tempered by quality of education at
college-level in case of IT Product sector, which requires considerable knowledge of
computer science. The number of colleges being a proxy for intake quality has 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 are
documented in Appendix B.
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, which explains why
parents often prefer colleges in metros as opposed to others in making an admission decision. The
employability figures based on the analysis are reported in Figure 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%
Hardware
Networking
37.71% 36.00% 4.53%
BPO 41.88% 40.08% 4.30%
Figure 12: Metro vs. Non-Metro Colleges
18.87
2.91
10.41
37.71
41.88
16.74
2.56
8.62
36.00
40.08
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Networking
BPO
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Metros
Non-Metros


As it may be noted, even though colleges in non-metro cities have lower employability, the
difference 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 with the earlier
analysis which showed that there wasnt much difference in the employability of 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
Networking
35.97% 36.90% -0.19%
BPO 39.31% 40.89% -0.76%
Figure 13: Metros vs. Non-Metros: Employability by city of permanent residence
In contrast, when the employability of candidates with permanent residence in metros and non-
metros was compared (see Figure 13), the trends came out to be quite different. There is an
appreciable gap in employability for IT product companies, and the gap in employability for
KPOs increases further. There are two potential hypotheses to explain this. Firstly, candidates
who born and brought up in metros have better exposure to computers and in particular, computer
programming, and thus they are more employable than their non-metro counterparts. If the
colleges were imparting computer programming education adequately, this gap due to intake
impact should have narrowed. Secondly, English language skills are very important for
Knowledge Process Outsourcing companies, and candidates born and brought up in metros seem
to acquire better English skills due to day-to-day exposure to a larger English speaking
population. This clearly shows that students coming from non-metros are disadvantaged to a
certain extent. Thus, there is a requirement of better 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 such differences. On the other hand, as noted earlier, there is no
20.18
3.85
12.02
35.97
39.31
17.63
2.78
9.25
36.90
40.89
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BPO
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Metros
Non Metros


merit to the argument that colleges in the metros automatically produce more employable
candidates.
d. Employability in Key Cities

The study also compared employability within students graduating out of different metro cities in
the country. The results are reported in Figure 14.

Figure 14: Employability in different metro cities
The following observations are made:
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, while the lowest
employability figures were observed among colleges in Southern cities. The skew in
employability is quite high; for instance, the IT product employability in Delhi in as high as 1
in every 9 candidates and as low as 1 in every 200 in Chennai. Even though Bengaluru has
similar IT services employability as compared to other Southern and Western cities, the city
shows much higher employability for IT product companies. This indicates that candidates in
Bengaluru do much better at computer programming and algorithms, even though they show
similar English and cognitive skills. This could be due to better exposure to computer
programming either at home, schools or colleges.
IT Services IT Product KPO
Hardware
Networking
BPO
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
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The reason for this skew in employability is explained again by the trend in number of
colleges in each of these cities (see Table 2). The proliferation of engineering colleges in
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 the fact that the
population of Delhi is much more than Southern cities, being comparable to that of Mumbai
(see Table 2).
City
Approximate number of
engineering colleges
Population
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
Table 2: Number of colleges and population in major cities
In summary, the study found that employability trends show significant variation with respect to
the location of the campus. Whereas employability percentage was found to be similar in Tier 1
and Tier 2 cities (classified by population), the employability in Tier 3 cities fell significantly.
The major gap in skills was observed in quantitative ability and logical reasoning skills, rather
than command of the English language. With regard to employability percent in different states, it
was found that employability decreases logarithmically with the number of colleges in the state
(in sync with Arrow's hypothesis). Also, whereas there was no appreciable difference in
employability of students coming out of colleges in metros and 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 a significant part of their life time in metros get
better exposure to English and computer education, helping them become more employable.
The key learning of this study is that as a Nation, we need to emphasize more on quality than
number of colleges.


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 large variance?
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 in popular
media). Campuses which fell among the top 100 on the list (according to various credible public
surveys) were segregated and their employability was compared with the rest of the campuses.
The results are depicted in Figure 15. The following trends were observed.
(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% to
16.32%) and two-and-a-half times (21.69% to 8.22%), respectively. The fall is not so steep
when it comes to BPO and Hardware Networking.

Sector
Top 100
Colleges
Rest of
the
Colleges
Graph
IT Services 30.95% 16.32%

IT Product 8.44% 2.16%
KPO 21.69% 8.22%
Hardware
Networking
45.05% 35.88%
BPO 47.29% 40.18%
Figure 15: Employability: Top 100 Colleges vs. Rest

30.95
8.44
21.69
45.05
47.29
16.32
2.17
8.22
35.88
40.18
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BPO
Top 100 Colleges
Rest Of the Colleges


(ii). Given that the ratio of the number of top 100 campuses to the rest is more than 10, one
can conservatively estimate that more than 70% of the employable engineers for IT product
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 source from Tier2
campuses, which creates a large artificial dip in the supply of eligible candidates. This is in
line with what was reported in the2009 annual employability report by Aspiring Minds.
6

Figure 16: Skill Gap: Top 100 vs. Other Campuses
The study also investigated what skills are lacking in students of Tier 2 campuses (see Figure 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 Figure 16). This clearly shows that the maximum effort is required to hone
mathematical skills of the students, whereas consistent effort is needed in other areas as well.
b. Employability in Govt. and Private Colleges

The research also analyzed the difference in employability between government and private
colleges (see Figure 17). Interestingly, an appreciable difference in employability was observed,
with students at government colleges doing much better than those in private colleges. The

6
National Employability Report (Aspiring Minds), 2009
10 20 30
English
Quantitative Ability
Logical Ability
Computer Programming
Percentile Points
M
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s
Skill Gap Analysis: Top 100 vs. Other Campuses
Percentile Difference


decrease in employability was around 35.1% for IT services and 58.06% for IT product
companies.
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
Networking
42.61% 36.02% 15.46%
BPO 45.38% 40.30% 11.19%
Figure 17: Employability: Govt. vs. Private Colleges
Figure 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 maximum gap being
in quantitative ability. This clearly indicates that government colleges attract better students and
probably impart better education as well. This is in contrast to the trends worldwide, where some
of the best institutions (such as MIT and Stanford) are private.
Average
Scores
Govt.
Colleges
Pvt.
Colleges
Difference

Graph
English 504 471 33

Quantitative
Ability
541 487 54
Logical Ability 485 453 32
Computer
Programming
443 403 40
Figure 18: Average Scores: Govt. vs. Private Colleges
25.67
5.64
16.23
42.61
45.38
16.66
2.36
8.59
36.02
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Govt. Colleges
Pvt. Colleges


c. Employability Variance across Colleges

In this section, we study the distributional properties of employability across colleges. The
employability of each college for the IT services industry was determined and arranged in order
of its rank (see Figure 19).

Figure 19: Employability Percentage of Students across Colleges for IT Services Companies

The following observations can be made:
The best of colleges have employability as high as 50%, whereas the bottom 30 percentile
colleges 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 of colleges with very high
employability followed by a high number of colleges with very low employability. Thus, even
though the mean employability is ~17%, the median employability is much lower.
Some simple calculations show that average employability in colleges in the top 30 percentile
(around 750 colleges) is 28%, whereas it is around 12% for the rest of the colleges. This
implies that almost an equal number of employable candidates are there in the top 750
campuses as compared to the rest (see Table 3.Values for IT product companies are also
given). Consider that no IT company in India has a campus recruitment program beyond the
top 750 campuses, which shows that almost half of the employable pool,i.e., around 50,000
employable candidates in the country, is invisible to recruiters.
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Top 30 percentile campuses
(~750)
Rest of the campuses
(~1750)
IT Services Employability 28% 12%
Percent Employable Pool 50% 50%
IT Product Employability 5.81% 0.97%
Percent Employable Pool 72% 28%
Table 3: Top 30 percentile campuses vs. the rest
The following conclusions are drawn:
One may observe that the employability falls drastically toward the beginning, and more
gracefully toward the middle. This clearly shows that there are certain colleges which have
excellent employability; however, other colleges even close in ranking show a drastic 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 may ranked just as highly. This
is not a healthy trend, implying that deserving students in these 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 employability is more
strongly influenced by college education quality (rather than just intake) as compared to
employability for IT services companies. The variation is shown in Figure 20.
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 services companies, this fall
was only around 1.5 times. Similar trends continue throughout the graph and confirm the
hypothesis that the quality of education falls steeply as one goes down the list of the so-called
top colleges, with close neighbors having substantial differences in quality.


Figure 20: Employability Percentage of Students across Colleges for IT Product Companies

Some other observations for IT product employability are as follows:
The best of colleges have employability as high as 27%, whereas the bottom 45 percentile
colleges languish at less than 1%.This figure degrades to zero employable candidates for the
bottom 20 percentile colleges. Around only 30% colleges have employability more than 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 versus the rest is
between two to four times depending on the sector. Inspite of this, more than 70% of employable
candidates for any sector are in campuses other than the top 100. Government-run colleges show
much higher employability than private colleges, with skill differences in all areas, including
English, cognitive skills and domain skills. With regard to employability distribution among
campuses, the quality of education falls steeply among the top-ranked colleges, which implies that
colleges that are neighbors in rank have very different quality of education. There are a large
number of colleges with exceptionally low employability: bottom 45 percentile campuses have
less than 1 in 100 candidates employable in an IT product company, and the bottom 20 percentile
campuses have no candidate employable in the IT product sector. Finally, we find that 50% of
employable candidates for IT services companies and 28% of employable candidates for IT
product companies are enrolled in campuses ranked beyond the top 750, thus forming an invisible
pool to most employers in India.
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Appendix

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 given below:
North East West South
Delhi Assam Gujarat Andhra Pradesh
Haryana Chhattisgarh Maharashtra Karnataka
Himachal Pradesh Meghalaya Rajasthan Kerala
Jammu & Kashmir Orissa Goa Tamil Nadu
Jharkhand Tripura
Madhya Pradesh West Bengal
Punjab
Uttar Pradesh
Uttarakhand
Table 4: Categorization of states across different regions


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 Process
Outsourcing Sector, Business Process Outsourcing Sector and Hardware and Networking
companies are reported. They follow similar trends as discussed in the chapter, and are presented
here for completeness.

Figure 15: Employability in KPO Companies across States and Union Territories

Figure 22: Employability in Hardware Networking Companies across States and Union Territories
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Figure 23: Employability in BPO Companies across States and Union Territories

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