Is the Indian education system out of touch with the IT industry? Well, the data says so!
As India’s IT industry continues to flourish, a growing concern has emerged about the gap between the education system and the industry’s evolving demands for skilled graduates. The traditional approach of the Indian education system seems to lag behind, particularly as the IT sector increasingly seeks talent equipped with real-world, hands-on experience. One clear indicator of this disconnect is the rise in mandatory internship durations, stretching significantly beyond the usual six months.
Placement officers from several tier-1 and tier-2 engineering colleges have reported that internships, which were previously limited to six months, are now being extended by an additional four to six months.
Samuel Rajkumar, Director of the Career Development Centre at Vellore Institute of Technology, elaborates on this emerging trend, highlighting that many technology services firms and Global Capability Centres (GCCs) are increasingly mandating internships lasting six to twelve months.
“Either it is internship-cum-placements or placements and internship of six months.” Samuel Rajkumar said.
The shift in internship duration in Indian IT companies reflects a significant change in how these companies perceive the value of real-world experience versus academic knowledge.
Now, the question arises: Why are Indian IT companies suddenly insisting on such prolonged internships? What has changed in the last few months or, let’s say, in a year in the Indian job market?
The Skills Gap: A Key Driver Behind Extended Internships
The answer has always been clear and right in front of us. Industry leaders have highlighted it many times in the past, but job seekers seem to overlook this essential advice: gaining skills in new-age technologies such as artificial intelligence (AI), machine learning (ML), and data analytics.
The acute shortage of skilled entry-level talent in these areas has compelled IT companies to extend internships to bridge the skills gap and improve their chances of hiring promising candidates through management trainee programs later on.
This trend is relatively new in India, where even hiring freshers now requires companies to invest significant effort before extending an offer. In the past, engineering students typically received their offer letters immediately after completing their internships in the final semester.
However, this year, many IT companies in India have extended the internship periods by several additional months beyond the usual six months to ensure that candidates are truly industry-ready.
Companies across the globe are increasingly adopting AI and generative AI technologies to streamline their operations. These advancements enhance efficiency by automating repetitive tasks, reducing manual errors, and accelerating processes, allowing employees to focus on more strategic activities. Additionally, AI-driven insights support better decision-making and foster innovation across various sectors. As a result, they are generating more revenue and profits.
Internships as a Double-Edged Sword: Burden or Benefit?
The new trend of extended internships in IT companies, while seemingly harmless at first, presents several significant drawbacks. One notable issue is that trainees now no longer receive a formal offer letter until they successfully complete their internships with good grades. This delay in confirmation of full-time employment can result in uncertainty lasting six to twelve months.
From the company’s perspective, the extended internship means a considerable investment of time and resources, which raises the question: Shouldn’t colleges be more proactive in preparing students to meet these industry demands?
It appears that IT companies are now stepping into roles traditionally filled by educational institutions – introducing students to the latest technologies and fundamental skills. This shift underscores a gap in the current educational framework, where colleges are falling short in providing industry-relevant knowledge.
Moreover, a placement officer from the National Institute of Engineering in Mysuru points out that despite the longer internship periods, pay packages for new hires are being trimmed. While the basic salary remains the same, the Cost to Company (CTC) has been reduced from Rs 10 lakh to Rs 8.5 lakh. This is primarily due to the removal of relocation bonuses and other perks. This adjustment reflects a cautious approach to hiring, as companies carefully manage their budgets in a recovering job market.
Although the extended internships may be a burden in some ways, they are not entirely viewed negatively. These internships provide invaluable hands-on experience, allowing final-year students and recent graduates to develop both technical and soft skills. They gain proficiency in tools, expand their networking opportunities, and acquire crucial industry insights. This practical experience is crucial for bridging the gap between theoretical knowledge and real-world application.
Surprisingly, despite coming from top engineering colleges in cities like Bengaluru, Delhi, Jaipur, and Mumbai, many fresh graduates still lack familiarity with the latest technologies, including AI, ML, and essential coding languages like C++, Python, and Java.
The situation at IIT-Bombay for the 2024 placements further illustrates the ongoing issue. IITians, known for their extraordinary skill sets in coding and other technical fields, are now struggling to secure high-paying packages.
Although the average annual package for IIT-Bombay graduates increased to Rs 23.5 lakh in 2024 from last year’s Rs 21.8 lakh, some packages offered were as low as Rs 4 lakh per annum. Shockingly, ten students accepted job offers in the range of Rs 4 lakh to Rs 6 lakh per annum.
Dipti Lodha, Director of Corporate Relations at the Poornima Group, which operates multiple engineering colleges and a university, highlights that even with high academic scores, students often fall short in industry readiness.
Therefore, IT companies are turning to extended internships as a way to evaluate candidates more thoroughly before offering permanent positions. Interns typically work for 6-9 months in their final year, with a remarkable 95% of them being absorbed into full-time roles thereafter.
Interestingly, the salary offered by Global Capability Centers (GCCs) and IT companies plays a significant role in shaping intern satisfaction.
GCCs provide premium salaries due to their adherence to global standards and high demand for specialized skills. In contrast, non-tech sectors often offer lower salaries, reflecting the perception that fresh tech talent lacks industry-specific experience.
The IT sector’s compensation falls in between, offering a balanced approach to pay for new entrants.
Future of Indian Engineering Graduates
It’s worth noting that India produces 1.5 million (15 lakh) engineers each year, and this number has remained fairly stable over the past five years. Surprisingly, only 10-15% – or about 2.5 lakh – actually secure jobs, according to a NASSCOM survey from 2019.
A 2023 report by the Times of India revealed that just 10% of these 1.5 million engineers were expected to secure jobs last year. This data highlights a troubling situation for fresh engineering graduates in India.
Considering that the above hiring data is from 2019 and 2023, before the widespread adoption of AI, ML, and other advanced technologies, the unemployment rate among engineers – currently affecting over 10 lakh – could worsen in the coming years.
The path to securing a good and sustainable job is becoming increasingly challenging for students and fresh graduates in India, regardless of their college status. This is mainly due to the fact that many Indian colleges have yet to adopt the latest technologies and hands-on experience into their curricula. Instead of focusing solely on theoretical knowledge and encouraging students to achieve high grades to enhance the college’s reputation, there needs to be a greater emphasis on practical skills, soft skills, problem-solving, and teamwork.
By prioritizing these areas, colleges can better prepare students to join the workforce with the necessary training and experience. This shift would not only benefit students but also help companies reduce training costs and increase their profitability.
The critical question now is whether the Indian education system will adapt swiftly enough to meet the evolving demands of the IT sector, or if this disconnect will continue to widen. The answer to this question will significantly impact the future prospects of millions of aspiring engineers across the country.
