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Out of 24,230 IIT and NIT grads, about 8,000 students didn't find any takers during campus placement drives this year.
The annual remuneration offered to final year students in the pre-placement offer -- something the IITs love to boast about -- has drastically reduced from average Rs 25 lakh pa to Rs 16 lakh pa.
rediffGURU Pradeep Pramanik, director, Fast Track Career Consultants, explains why.
If you ask any young student about their career goals, most of them will probably say they'd like to be a doctor, engineer, CA or maybe join the IAS/IPS.
Every year, lakhs of students prepare for the IIT-Joint Entrance Examination, hoping to study at the prestigious Indian Institutes of Technology.
The lure of the IITs is real because it is believed that IIT graduates do not have to worry about their future.
Every year, some of the nation's top companies, mostly consulting /IT firms, visit these campuses months before the students graduate, hiring them for attractive roles at astronomically high packages.
That used to be the pattern.
In the past few years, however, a lot has changed.
If you look at the placement report from some of the top colleges, including the IITs, some of which are also available in public domain, the statistics are worrisome.
Out of 24,230 IIT and NIT students, approximately 8,000 students (about 38 per cent) didn't find any takers (external link) during campus placement drives this year.
Since 2022 and 2023, around 321 and 172 students respectively who graduated from the IITs are yet to find a job.
The annual remuneration offered to final year students in the pre-placement offer -- something the IITs love to boast about -- has drastically reduced from average Rs 25 lakh pa to Rs 16 lakh pa.
The lowest package offered to an IITian this year was Rs 4.20 lakh pa.
Shocking?
It's time to ponder what might have influenced this trend.
Geo-political and economic conditions
A healthy world means a healthy economy leading to a healthy hiring of manpower.
Unfortunately, in the last few years, we have seen conflicts involving Russia, the European countries, Israel and Palestine, the Middle East nations and the USA.
When countries like Russia, the Ukraine, Iran, Israel and Lebanon are engaged in war directly or indirectly, you can't expect the top companies to come forward and hire freshers for attractive salaries.
In fact, war affects almost every country in the world.
When a country is at war, export and import get adversely impacted so manufacturing companies try to manage their operating costs.
Major industries that are impacted by war are IT companies, travel and tourism, hospitality, airlines, etc, causing a decline in foreign exchange earnings.
Automation and AI
The fear of Frankenstein is coming true.
As per Bill Gates' latest announcement, in the coming years, IT companies will not hire as many engineers as they once did to develop software or test them.
These jobs are expected to be managed by artificial intelligence-enabled software, thus saving the cost of hiring engineers.
He highlighted how around 33 per cent of software is currently developed by AI-enabled technologies and that this will only increase in the coming years.
Elon Musk, owner of SpaceX, Twitter and Tesla, has already moved into manufacturing using robots and thus has minimal dependency on human resources for his manufacturing units.
This is another challenge for graduating engineers who used to be hired at high salaries by these companies.
The highest-paying companies that visited the IIT campuses were all consulting firms. The companies that hired fresh engineering graduates from IITs were McKinsey & Company, Standard and Poor, Bain & Company, Boston Consulting Group, E&Y, PwC, Capgemini, Cognizant, Goldman Sachs, Google, Oracle and Deloitte, to name a few.
With the advent of AI and automation, some of the top IT firms like TCS, Infosys, Wipro, Reliance, Adani and many other companies involved in R&D in areas like automobile, renewal energy, hybrid power resources, aerospace, semiconductor companies and processing companies like Coca-Cola, Pepsi that used to hire engineers from the IITs realised that the hiring costs of engineers do not translate to profits.
These factors resulted in the following scenarios:
Outdated curriculum, lack of proper skill training
When discussing rising unemployment among young graduates, it is equally important for academicians to keep in mind that the curriculum in most of these colleges is still not updated to accommodate the changing technologies and demands of the future.
Institutes need to have a plan in place to upskill graduates and prepare them to be flexible and adaptable.
While global calamities that challenge the economy cannot be averted overnight, we must remember that AI and automation will continue to disrupt the norms of workplaces in the years to come.
So what can students do to be hired by their dream companies at desired salaries?
While major steel, power, cement, and capital goods manufacturing companies in India are continuing with existing technologies and machinery, countries like China, South Korea, Japan, Israel, Vietnam, UAE and Saudi Arabia have adopted pragmatic engineering courses to make them future-ready, mostly using advanced technologies in manufacturing, infrastructure and the service sectors. India too needs to gear up and offer newer courses to our students.
Since IT industries which used to hire the highest number of engineers are increasingly using AI and ML-based technologies, colleges have to modify their courses and students need to grab such courses to remain competitive.
The dependency on engineers to secure a job must be reduced. Instead, graduates must be trained to become self-reliant entrepreneurs like the Japanese, the Chinese and the Koreans.
The government must facilitate the transformation of these engineers into budding entrepreneurs and support them through angel funding, start-up training and workshops so that they can compete with international players.
Youngsters must explore newer fields through self-driven R&D (research and development) and become stakeholders in industries as knowledge partners.
One cannot ignore the fact that certain things are not in the control of students. But a conducive working environment, a supportive ecosystem and restrictions on imports are some factors that can help Indian students compete better with global players.
Pradeep Pramanik is a career coach, placement consultant and director at Fast Track Career Consultants, which provides career counselling, soft skills training and placement consultancy services.