The placement seasons have started in the Indian b-schools and the buzzword on campuses is about who is coming on campus, how much they are giving and what is the kind of profile that one is being offered. In this blog, I am going to look at what I think is going to be one of the biggest problems faced by Indian companies today, in fact anyone who is hiring or planning to hire out of India. I will trace this over a two part blog.
In this first part, I am going to try and trace the reasons for what I believe is the failure of the Indian higher educational system.
India is facing a talent crunch. You may wonder, that how can a nation of 1.1 Billion people with roughly 54% (594 Million) of them being in the active work force face a talent crunch. Well, it is surprising yet it is true that the reason for the spike in salaries offered across the board is due to the ‘artificial’ talent crunch in India. Now, why do I call it an artificial phenomenon, it is simply because this talent crunch is due to the ineptness that is prevalent in our educational system today.
I would like to point out that I am going to talk primarily about employability and not the number of people who can be employed. So, here is what I think…..
The education system today produces engineers and management graduates by lakhs. According to the All India Council for Technical Education, India produced 401,791 engineers in 2003-04, 35 per cent being computer engineers. In 2004-05, the number of engineering graduates increased to 464,743, of which 31 per cent were computer engineers. AICTE has approved 950 b schools across India. Let me do some math here as I was unable to find the figure of the students who pass out of Indian b schools each year. If I assume that on an average the size of Indian b schools batches are roughly 240 each year, I know it is not an accurate figure but it would be a decent estimate. That would mean that there are 240 x 950 = 228,000 management graduates passing out of the accredited Indian b-schools each year.
Based on the demand, the entire IT industry alone can account for 50% of those numbers being hired. But, you find that the placement figures are extremely skewed in favor of the top 10 b schools in India, companies practice a policy of basing the compensation on the b-school from which you have passed out. This is of critical importance especially in India. But, not everyone gets the high flying corporate lifestyle and sky high salaries, even IITs & IIMs have students who do get placed below the class average. Unfortunately, a majority of the students who get these below the class average salaries are the so called ‘beneficiaries’ of the Government of India’s ‘inclusion/equal participation/quota’ policy. This is not because they are not smart or any such thing, what many people fail to acknowledge is that the grading system in IITs and IIMs follow the American style of CGPA (Cumulative Grade Point Average) or GPA (Grade Point Average). These are scores calculated in relation to the performance of other students. It follows the percentile basis of ranking students, that is let’s say there is a exam on a subject Measurement Techniques or Managerial Economics is a 100 mark exam paper. Let us say student A scores 67 and is the highest in class, then A is at the 100th percentile and the other students are rated in relation to him.
So, let us take an unfair view and you would find that a guy who enters in via the quotas and I am talking about those who are in lower end of the spectrum of people who get in through quotas, i.e. those in the 20th percentile of those who benefit from quota, these are the students who struggle the most. They are the ones who struggle enormously as they are the ones who are unable to take the pressure due to no fault of theirs but that of the Government for having the worst public education infrastructure in the world for one of the world’s ‘next economic superpower’. These unlucky folks are subjected to horrendous infrastructure, poor teachers and are also products of the highly political and the most impractical thing in Indian education of teaching people in the mother or regional language. It is absurd that when you are being touted to be the next big thing in the world due to your English language skills and yet you are averse to it. This is why a majority of India is left out of the ‘India Shining’ phenomenon. And these people have very poor English speaking and reading skills, which you need by bucket loads if you need to do well in English as the material and language of instruction, is English.
It is like telling Mike Tyson, “You have to beat the crap out of this guy” and then you proceed to go on to tie his hands, legs, eyes and mouth (he has pretty strong teeth too ;-) ).
How do you expect these kids to survive in the most cut throat academic environments without a strong foundation in basic education? And now with the quotas being increased to 49%, the chances are that this would happen more often.
This brings us to the most disturbing fact for India Inc., a majority of the educational institutions in India are not producing the talent that India Inc. requires, this is again due to the extensive separation of the academic and the corporate world. Indian engineers still learn only C, C++, Java in their Software Engineering courses and are not taught the latest in the programming world’s development. The problem with Indian b schools is that there is a distinct American Management Philosophies that are so often espoused as the end all and be all of the subject, I have noticed that the classes in Indian b schools are not as interactive and probing like that in the other universities abroad. Also, the approach in Indian b schools is again largely theoretical and has very few elements of actual real life application.
What can India Inc. do but be forced to pay for the artificial shortage in India of employable talent. This is the biggest failure of the Indian education system, we may have the most robust and the most competitive primary and secondary education. But our higher education just falls flat on its face.
I come to the end of my first part of the two part series on the talent crunch. In the next part I am going to talk about the means adopted by Indian companies to attract talent into their organization.
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