Growing mismatch between graduate skills, market needs

Shock reports have revealed a vast skills gap in India, with several surveys suggesting that half of all graduates are not employable in any sector based on industry standards. This has sparked growing concern about the mismatch between universities and the needs of the job market.

Among some disciplines the skills gap appears to be staggering – 75% of IT graduates are deemed ‘unemployable’, 55% in manufacturing, 55% in healthcare and 50% in banking and insurance, according to Higher Education in India: Vision 2030, a report produced by international consultants Ernst and Young for the Federation of Indian Chambers of Commerce and Industry, or FICCI.

The National Association of Software and Services Companies maintains that of around three million graduates each year, less than a third of graduates of engineering colleges and only 10% to 15% of regular graduates are employable.

And despite an increase in education levels, one in three graduates up to the age of 29 was unemployed according to the Labour Ministry’s Youth Employment-Unemployment Scenario 2012-13 released last November.

In urban areas one in four young graduates was unemployed, while in rural areas it was 36.6% of graduates – a substantial rise compared to the previous year. The ministry’s survey released in 2012 found graduate unemployment in urban India to be 8.2%.


As the labour market tightens for graduates in all sectors – manufacturing, technology, hospitality or corporate – employability is becoming an issue, although how to measure it is still unclear.

Several of the studies citing very low employability levels appeared to base them on the need for high levels of English proficiency and soft skills, not just technical skills.

The largest pool of graduates in India is generalists with broad socio-economic knowledge but no specific technical skills, according to a British Council report Higher Education in South Asia 2013, released last December.

There is a “definite disconnect between the skills and aptitude of the majority of graduates and the needs of industry”, according to Ashok Reddy, managing director and co-founder of the recruitment agency Teamlease Services India.

“At entry level you expect a graduate to come with certain skills such as communication, inter-personal, ability to speak English and work as a team, and basic computer knowledge. For a technical graduate functional skills in the area of specialisation are a must. But these are absent today,” Reddy told University World News.

The company refers to “a geographic mismatch, a sector mismatch and a skills mismatch” in the country, which may be “unnecessarily confining as many as 300 million people to low-productivity jobs”, among them many graduates.

Universities and employability

Notably, only two Indian institutions featured in the top 100 Global Employability University Ranking 2013 compiled by French human resources consulting group Emerging Associates along with Trendence, a German polling and research institute.

The Indian Institute of Science, Bangalore, ranked 23 and the Indian School of Business, or ISB, was at 52.

A majority of ‘employable’ graduates in India come from the country’s top 30 institutions. These institutions are also most likely to be collaborating with industry.

The ISB holds annual industry events and runs experiential learning programmes involving collaboration between student teams and industry on real-world business issues. ISB Hyderabad has a student-run professional club sponsored by a corporation that also mentors its members.

Top institutions are concerned about employability.

In 2013 the University of Delhi moved from a three-year to a four-year undergraduate programme modelled on the American system, which Vice-chancellor Professor Dinesh Singh described as skills-oriented, supported by work placements and with different exit options to make graduates more employable.

The previous system was “not turning out employable graduates”, according to Singh. “We have not touched the knowledge component but added other values such as communication, applied language, information technology, basic mathematics and other skills that each graduate must have to be employable,” he told University World News.

The university’s four-year programme is just a year old and it will be a while before it is evident whether the extra year and foundation courses improve the attractiveness of students to employers and the ability to do the job.

The role of universities

While the top 30 Indian institutions, both private and government-funded, have begun to focus on improving the soft and technical skills of graduates, a large majority of institutions are far behind industry expectations.

“The challenge is to impart skills to the large majority of Indian students,” and to maintain quality in more institutions below the top 30, Reddy said.

In a bid to bridge the gap between industry and higher education, FICCI has set up three regional ‘knowledge hubs’ in the north, south and western regions of India to identify institutions and collaborate in improving the curriculum, teacher training and student exchanges as well as facilitating international tie-ups.

“Students will get an opportunity to work on industry projects, thus giving them practical training and improving employability,” said Dr Rajan Saxena, vice-chancellor of Narsee Monjee Institute of Management Studies in Mumbai and co-chair of the FICCI higher education committee.

But for the most part, apart from initiatives such as that introduced by FICCI, universities in India are not willing to have significant collaborations with industry, noted Reddy. Universities often cite the need to adhere to a tight curriculum rather than keep up with industry changes.

Universities have faced flak in recent years over inflexible curricula, rote teaching and learning and lack of experiential learning outside the classroom. But academics say industry expectations are often unrealistic and misguided.

“While the mismatch issue is valid and important and real, it’s more about expectations on both sides,” said Shanti Jagannathan, senior education specialist at the Asian Development Bank in Manila. Employers “want everyone to come prepared and ready. Employers need to invest in their own employees.”

Professor NV Varghese, director of the Centre for Policy Research in Higher Education in New Delhi, said: “Industry is expecting a finished product who can be employed and universities cannot provide that. You cannot degenerate universities to training institutions.

“Technology and skill sets are changing quickly and you cannot readjust the university curriculum every time that happens.”

India needed to focus on expanding the non-university sector, added Varghese. “Expecting one system to provide everything is unrealistic.”

FICCI’s Higher Education in India: Vision 2030 also suggests a multi-pronged approach: research-focused institutions for high quality research and innovation; career-focused institutions offering technical and professional courses that produce industry-ready graduates; and foundation institutions that offer a wide range of courses providing well-rounded education and skills relevant to local industry and communities.

Geographic, sectoral imbalances

But India is a large and diverse country, both in terms of university quality and the location of industries and jobs.

“In information technology there are hubs around the country such as Bangalore, Hyderabad, Pune. Manufacturing is also concentrated around certain states,” noted Kashmir University Vice-chancellor Professor Talat Ahmad, adding that many young graduates migrate from other states to Delhi, Mumbai and the southern regions.

“Unless you have companies visiting campus to select students, both employers and students have to know where to reach out to each other,” Ahmad said.

The employment challenge is not only related to the geographic location of jobs but also the sector.

Skills Development in South Asia, a recent Economist Intelligence Unit report commissioned by the British Council, cited surveys by India’s National Skill Development Corporation, or NSDC, which showed that the largest job growth in India would be in construction, automotive, retail and healthcare.

In the construction and automotive industries alone, close to 100 million new jobs are expected to be created by 2022. However, students want jobs in different industries altogether.

Almost 50% of respondents said they would like to work outside the NSDC’s eight high growth sectors, according to a survey. Even among those keen to work in high growth sectors, students were most interested in jobs in banking, healthcare, retail and hospitality where job growth is not expected to be as rapid as in some other areas.

The NSDC has conducted skill gap studies across the country to determine skills in demand in a particular region. The information is shared with suppliers or training providers.

Mapping supply and demand

The government is also building a labour market information system to map supply and demand.

Once this is in place – parts of the system will be rolled out this year – all players such as training providers, assessment or certification agencies or content providers, job seekers and job providers will be able to come together on one job-matching platform.

NSDC’s Udaan initiative, for instance, focuses on providing employment opportunities for 40,000 college graduates in Jammu and Kashmir states over the next five years.

With most jobs concentrated around India’s biggest cities, a long way from Kashmir, “the NSDC and its skills councils have to play the role of facilitators”, said Kashmir University’s Ahmad.