A large number of fresh engineering graduates will find it difficult to get jobs as established IT firms are going slow on hiring. Automation is making many jobs redundant for those who are working in IT firms.
Nasscom on Thursday said of the 16-odd lakh engineering graduates that pass out yearly, only 2 lakh will be hired by established IT firms this year. So where does that leave the large chunk of freshers?
According to a Centrum Broking survey, in 2015 the big five software companies in India, including Infosys, Wipro, TCS and HCL Technologies, have had fewer hires. The statistics are alarming: Nasscom report states that over 260 million are likely to lose jobs to automation by 2020, if not skilled in emerging tech skills, 50 percent of current IT workforce who lack new age skills is likely to become irrelevant in the next four years.
The last decade of hiring has largely been of core engineering graduates from top 50 colleges in the country. There are many who provide basic IT knowledge to the sector and come from tier 3 engineering colleges with a BSC Tech degree or diplomas and MCA, etc. These are all esoteric on paper but low on employability, points out Milan Sheth, partner – advisory services and technology sector leader, Ernst and Young.
Automation has taken its toll with jobs getting redundant. But Sheth points out it is not an overnight change. Automation started happening in 2013-14 and change will be seen in campus hiring by 2018, he says. By then most companies would be adopting technologies and automation. The only hope in India is that you can really use this opportunity to create more IPs and products for that will be become a new industry itself.
Automation can give rise to need of people to increased automation gives rise to humungous amounts of data, leading to challenges around managing all of this data. Big data professionals and data analysts come in handy to make sense of all the data flowing from automation tools. As professionals, up-skilling in big data technologies is a sure-shot way of retaining your job, and even opening up new avenues of career growth.”
One way out would be for startups to actively engage with engineers who graduate from tier-2 and -3 cities. Swati Dayal, co-founder and director of online social commerce platform, Sagoon, says that she has made it a company policy to hire only from tier-2 or -3 cities.
What Dayal finds lacking in most of these students is that they do not have good communication skills but more than make up for it with job skills. “They have to be trained to what is required by us. We have found that most of them are enthusiastic and are willing to adapt.”
Sagoon, which has an 18-member team as of now, will be soon expanding to a 60-member team of which all the hires will be fresh engineering graduates from small towns and cities.
Another reason for hiring from tier-2 and -3 cities is their stickiness to the job, which is longer than those from tier-1 cities, say some. This is especially so in the case of data analysts, says CoCubes Technologies – a hiring and skill assessment firm, that analysed results of 43,000 assessments conducted for top analytics companies in the country over last 12 months and collated a report titled ‘Guidebook for Hiring Entry Level Analytics Talent’.
The report mentions that data analysts at ‘fresher’ level are earning an average annual salary of Rs 7 lakh as against Rs 3.2 lakh for software engineers. The compensation can go up to Rs 10 lakh per annum depending on the job profile and fringe benefits being offered.
The report states there are jobs in data analysis that don’t require high cognitive abilities and client interaction and have more to do with data management and data warehousing. “This is resulting in a relook at hiring strategy as such roles see high attrition if candidates are from tier-1 colleges. Multiple companies have, therefore, started looking at tier-2 and -3 colleges to map the right talent for jobs which don’t require a high cognitive ability,” it added.
Companies are also adopting up-skilling strategy for the existing talent to meet their work necessities instead of hiring people from outside. “Over the last one year, a re-skilling approach has emerged in which firms are looking at internal resources and upskilling them for client and skill requirement rather than finding new resources with existing knowledge,” the report states.
Commenting on the findings, Co-Founder and CEO Harpreet Singh Grover said the “analytics industry in India is expected to double its turnover to $2.3 billion by 2017-18 from the current level. One of the key challenges in harnessing this opportunity is creation, development and retention of analytics talent. In the report, we have strung together the ways companies are overcoming this challenge. The report works as a guide to anyone looking at hiring data analysts.”
The startup industry is facing a fund crunch and their ability to absorb freshers in large numbers is not feasible. Recent surveys and studies indicate that the funding for start-ups is likely to become a trickle with fund managers tightening the purse strings, say people in the start-up ecosystem. A joint report by KPMG and CB Insights recently revealed that the fund flow has nosedived by as much as 24 percent from the December quarter to $1.15 billion in the first quarter of this year.
One way out would be for freshers to look at becoming entrepreneurs themselves. Sashi Chimala, executive vice president, National Entreprneurship Network, says in the long run entrepreneurship is one of the solutions for job creation. “Entrepreneurship does not mean Flipkart or a Food Panda. It is also about small and medium enterprises. It is not about becoming unicorns.”
He says that when someone starts-up, he/she takes herself off the job queue and creates more jobs. Choosing entrepreneurship as a career would be a good option, he points out.
Chimala, a serial entrepreneur himself, feels what is lacking in India is mentorship in each city so that new entrepreneurs can be guided by the ones who have made it big. “India is abysmally low in mentors. There is no thriving entrepreneurial ecosystem with mentors. We don’t find a successful entrepreneur mentoring new start-up founders.”
Known knowledge is getting outdated rapidly in an increasingly technology driven space where new technologies are replacing old ones. “Industry sectors demand regular updation of knowledge and skills historically, whether this is because of new technology advancements or fundamental changes in business models. This is simply a business necessity,” says Kaustubh Nande, Country Marketing Head, ANSYS India, a company that focuses on product-related startups and supports them by providing sotware, skills and technology-based training.
The curriculum must be in tandem with the needs of the industry, say some. Subrata Ghosh, CEO and Founder, Redstone Learning, a global professional learning company, says, “to help people prepare better, the education system needs to imbibe students with better problem solving skills and good reading habits – rather than rote learning. And working professionals of today need to stay abreast of new developments in their industry, and technological changes that are impacting it. This will help them prepare in advance and even use change to their advantage.