Indian employability industry and opportunities for startups


India has more than 10,000 educational institutions, with nearly 4+ million students graduating from engineering and management colleges alone, every year. However, the employability quotient has always been a cause of concern. This has led to multiple streams of businesses coming out to help students and colleges raise the employability quotient.

First of all, it is important to understand the reasons behind the low employability quotient in India, especially in the engineering and management domains:

  1. College admission process - Most institutes imparting professional education today have more seats than the number of interested candidates. As a result, a majority of admissions are driven through third parties like consultants or through a commission-based approach. These admissions are typically done in two ways - fee waivers to the students (partial or full) to ensure the seat is filled and some revenue is generated, or through management quota, where a large donation amount is charged for a candidate that does not come through any merit-based counselling. The result is a pool of students who are either not interested in doing engineering/management but are forced to do so or are not ready for such an education.
  2. Student background/demographics - More than 75 percent of private engineering and management institutions attract students from Tier-II or Tier-III towns or from rural areas. They are typically poor in English communication. In addition, in absence of any selection process/test, most students selected do not have minimum qualifying grades in their Class X and XII performance. The result is that close to 90 percent of these students miss out either during the aptitude screening rounds or are not even eligible for majority of companies, which have a minimum criteria.
  3. College management background - Large number of educational institutions in India are run by people with business, real estate and political backgrounds. Running these institutes efficiently and making them a success is neither their first priority, nor is it their expertise. These institutes need to recruit people with rich experience in the academic and education industry and provide them complete control so that the best decisions are taken for the students as well as for the college. This is something which is lacking in most institutions in the country and hence the trickle-down effect is obvious.
  4. Awareness of campus selection process - Today, more than 70 percent of the companies in the engineering domain and more than 50 percent of the companies in the management domain conduct a written test (aptitude/technical/english) as the first round for screening the candidates. Students who are good technically are left out because they lack aptitude/verbal skills. Colleges and students must understand the fact that the years of hard work of imparting and learning technical skills would be useful only if the students are able to clear the first hurdle.

Secondly, there are multiple companies operating in this space trying to bridge the employability gap. These can be classifieds into various categories:

  1. Training companies - These are companies that provide classroom training to students on a regular basis. They are flexible and can customise the design of the training module as per the requirements of the college. Their pricing model is also very flexible, charging on a per-hour or per-student basis, whichever is mutually convenient. However, the quality of delivery is questionable. In fact, most colleges have burnt their fingers trying out different training companies. This is primarily driven by the fact that the output is dependent on the individual trainer. Most training companies keep shuffling their trainers or hire freelance trainers on an hourly basis for such assignments to increase their margins, which disrupts the quality of delivery.
  2. Placement consultants/agencies - These are companies that connect colleges to companies with commercials on a per-company or per-selection basis. This is the most unstructured segment in the market, with all sorts of players. A lot of cases have been seen where companies have created fraudulent HR contacts, conducted recruitment processes, charged huge amounts from colleges and run away without any selection or without any joining for the selected candidates.
  3. Assessment companies - This is a more technology-driven segment, primarily driven by startups, where companies assess the candidates at the colleges and share their scores/profiles with a set of associated companies, and thereby provide opportunities to those students selected by the respective companies. Companies like CoCubes, Aspiring Minds, e-Litmus and StudyBud are the top names in this category. However, the skill development piece is still a missing link, which only few of the above companies are taking care of.
  4. Web-based platforms - There are multiple websites like FreshersWorld, IndiaBix and others, offering training modules, practice questions and placement-related information for students. But the limitation of these platforms is that in India only a small proportion of students are self-motivated to visit any online learning platform and rely on the same for job preparation. Unless being driven by external forces like faculty/college, the output from such sources is minimum. Moreover, the content on these platforms is unstructured and the recruitment support is minimal.

Many institutes have tried to form their in-house skill development and recruitment teams to ensure accountability and regular monitoring. However, with limited resources available to them, they have been forced to look out for partners. There is a huge opportunity for upcoming startups and entrepreneurs to make a mark in the Indian employability space. Some areas still left unexplored are technical skill development and assessment, core-sector recruitment support and company-specific assessments. This industry requires a company that becomes a part of every educational institution it associates with, follows an inclusive policy and drives change from within. With a better product, there is scope for a market leader to emerge in the employability space in India in the years to come.

(Disclaimer: The views and opinions expressed in this article are those of the author and do not necessarily reflect the views of YourStory.)