The engineering job slowdown has begun, what went wrong and how to fix it

Autonomy, technology based education and industry orientation is the way out
The engineering job slowdown has begun, what went wrong and how to fix it
The engineering job slowdown has begun, what went wrong and how to fix it
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By K Ramachandran

With placements dropping by 40-50% this year compared to the last, the signs are clear that the days of bountiful recruitment are waning.

The academic year 2016-17 is sure to go down as an inflexion point for higher education, particularly for engineering institutions in India.

Many colleges and universities across India – which tout their “placement record” as a badge of honour and use it to fuel their marketing engine – now see their placements reduced by 40–50% compared to the previous academic year.

This perilous drop in placements across the country is threatening the very foundations of engineering education, from a medium term perspective. If the present trend continues – as indications suggest – for the next three years, at least 30% of colleges will be forced to close or cut down their intake capacity. The ripples from this shake up also threaten to affect the economy in different ways.

The three main reasons given for this downtrend are economic headwinds and after-effects of Brexit; digitisation and automation taking away more jobs than expected; and the growing gap between what industry wants and what college graduates possess as skill sets.

While colleges are feeling these macro and structural changes, the bigger peril lies within the system: Most universities in India are totally unprepared to manage the massive shift. They cannot even fathom the urgent need for reforms in curricula and governance systems that can help beat the odds. A very small number of private universities, because of their financial muscle and relatively more agile academic systems, are certainly better equipped.

More on this later.

Skewed priorities, bad outcomes

The growth wave began around 2005 when IT service majors started recruiting engineers in droves from every type of college to staff their massive offshore development centres. Each subsequent year, this number kept growing as offshoring increased and the relatively cheaper Indian labour was favoured by US and European companies – especially those in the banking, financial services, insurance, health care and manufacturing sectors.

As the demand for workforce swelled, colleges thrived. Parents and young students thronged those institutions which showed higher recruitment numbers. So campus recruitments became the biggest marketing point for most institutions, rather than good academic practices.

Except for a discerning few, and those interested in higher education, every student – regardless of engineering branch – was happy to be picked up by the IT service majors. Post-graduate courses either went empty or, to quote several college principals and administrators, only “those who did not get other jobs” came for teaching.  In other words, except for the top 20% of the 3800 engineering colleges, theteaching staff became the weakest link in engineering education.

Meanwhile, barring the global slowdown in 2009-10, the service companies grew rapidly – in competence, and delivery excellence. The happy story continued till 2014.

In the last two years, this scenario has started souring, as digitisation and automation technologies started to hold sway. Companies in the US and Europe, affected by economic slowdown, have started looking at reducing humans numbers and replacing jobs with bots and automated solutions. Also, smaller companies which started coming out with more powerful platforms, bots, and digital products, especially in areas like Big Data, Analytics, Internet of Things, Mobile and Cloud-based Solutions, and financial technology innovations such as Blockchain, simply made life easier for many large providers.

Companies that used to offshore back-end jobs for the past 15 years, are now rethinking their operations and services. Social, mobile and Cloud based platforms, powered by IoT and Big Data, backed by technologies like Block-chain are helping them reduce dependence on people for repetitive monotonous jobs,  They prefer using automated systems to perform them.

The full force of this change has started hitting India’s IT services sector. Now, they are in the same race, along with a range of start-ups in the “platforms and products” play.

This means that colleges are slowly realising that instead of recruiting dozens of their graduates for application maintenance, manual testing or trouble-shooting work, companies are looking at a much smaller number of students with better coding and advanced technological capabilities.

This year’s story

In July 2016, the National Association of Software and Services Companies (NASSCOM), the lobbying body for India’s $ 120 billion software services sector, predicted a 20–30% reduction in recruitments this year.

Normally between September and November, colleges advertise or at least publicise in some ways the campus recruitment numbers, setting the stage for next year’s admission campaigns. This time no such noise is being heard. However, placement heads across professional educational institutions note that compared to the previous (May 2016 graduation) batch, campus placements have gone down by 40–50% for the 2017 batch. In colleges where the IT service giants selected 500–700 candidates last year, this year they rolled out offers to less than 300 aspirants.

Triple threat for the higher education sector

The difficult situation poses a triple threat for India’s higher education institutions, especially, the massively popular engineering education sector.

1) Colleges, crippled by the anachronistic affiliating system, are unable to find a way out. More than 75% of India’s colleges are fully dependent on the administratively ill-equipped and poorly funded parent universities. Generally, universities control the curriculum, syllabus, and the teaching and learning norms. In Tamil Nadu, the Anna University that oversees engineering education, dictates even the “time table” and how internal marks should be calculated for students. So, colleges don’t have any leeway to do anything innovative. On their side, University staff and academics spend all their time on the unproductive work of monitoring the affiliated institutions, conducting examinations, releasing results and giving out certificates.

2) In the words of Jayaprakash Gandhi, a career analyst who travels across the country speaking to students and institutions: most of the university decision makers don’t seem to have a clue of the near future. The teaching staff in most of the colleges have little idea about the vast changes that computers, artificial intelligence and digital are making on business and industry processes.

With job opportunities dwindling, colleges know nothing can help them even if they spend more branding money. Their hope lies in improving infrastructure or rolling back fees to attract more students. Either way they get hit.

3) Predictably the trend of reducing campus recruitments will continue as the next wave of digital technologies and automation hold sway.  But the number of recruiters – especially small enterprises whose play is in the evolving technology space, will go up. They will come looking for highly capable young minds that can do high quality coding and possess better critical and problem solving capabilities, and greater imagination and appreciation of technology. And they will get higher pay packages than IT service providers can pay as reward for their better competencies.

In fact, in some of the highly-ranked institutions in Tamil Nadu, Karnataka, Maharashtra, Delhi, West Bengal and Punjab or in the network of NIT, IITs, such companies have, in the last few years, taken away the top 20–25% of students, leaving only the rest for the “bulk recruiters” among IT service companies.

The job scarcity has another dimension. The NPA of most banks in the education loan section is growing and the default rate is only going to go up as graduate unemployment grows. This means students in coming years will find it increasingly difficult to get education loans from banks under NPA pressure. 

What can be done now?

Four Steps across the quadrant:

While long term solutions lie in more funding for higher education and a complete rejuvenation of the school education system to prepare students for a future more oriented to science, technology and mathematics, a nuanced tactical response is needed now.

1. The Union and State Government need to review the affiliating system: Give autonomy to the top 20% high performing colleges and declare them universities. Let them include newer subjects such as 3D printing, artificial intelligence, Cloud, Mobile and social computing, Big Data, Analytics, IoT, and Agile in the curriculum and add value-adding courses in more emerging areas.

2. A massive effort is needed to re-equip professional college teachers – by sensitising them about the latest developments in technology, science, and economy and then encouraging them to take up domain specific faculty development programmes and research.

 3. Students and college students have to realize the need to invest more time, effort, money and intellect into their college life.

Says B Rajesh Kumar, founder of Focus Academy for Career Enhancement, a very popular training and skill augmentation company: “Students are spoon-fed in school, pushed by parents and peers into getting high marks in Board exams or entrance tests. Once into college, parents think it is then up to their sons/daughters to survive and somehow get a job.”

He points out that today college life and industry exposure have to occur in parallel and not in series. “Right from the first year, students need to understand their responsibility. They can’t just come in at 8am to college and move out at 3pm and think the six hours spent in class will help them get a job or career. They need to create a cycle of 6 hours in college, and spend another six hours learning new subjects, reading up stuff, getting to know what’s happening in industry and technology. Parents’ role is critical here.”

Colleges too must make more infrastructure accessible to students, he adds. “As for colleges, they need to come out of the old-world thinking of “monitoring and supervising students” and trust the youngsters. Give them access to more library and Internet facilities. Today we have the technologies to create enough firewalls and filters to prevent misuse of technology. Unless, the student invests 12 hours or more in academics, training, reading, industry interaction, technology learning and skill development, they will just become engineering graduates without a fit for any job.”

4. Use technology to force-multiply existing assets and capabilities. Shortage of quality teachers is one of the biggest problems in engineering education. Use industry experts, adjunct professors and high quality teachers from existing colleges to create an ecosystem of online/ blended learning so that in addition to the academics, students and teachers can learn first-hand from experts the latest developments in industry practices, technologies and business.

Colleges can either lead the change or at least adapt to change. Remaining there and hoping for things to improve is no longer an option.

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