In 2023, an online talent assessment company, Mercer | Mettl, conducted a study titled “India’s Graduate Skill Index 2023,” which suggested that only 45% of Indian graduates applying for jobs possess the skills needed to meet the rapidly changing demands of the industry. The study evaluated data from 2,500 campuses and 440,000 learners.
The report indicates that it is easier to find candidates with high employability in non-technical skills than those who are job-ready for technical roles. Data from the report suggest that about 53% of Indian graduates are employable for top non-technical jobs, compared to only 44% for top technical positions. Moreover, the demand for technical skills is diverse, with a generally low demand for individual skills.
The report further reveals that employability rates across different college tiers are relatively similar, showing minimal variations. Tier 1 colleges have an employability rate of 46%, Tier 2 colleges have 44%, and Tier 3 colleges have 43%. However, graduates’ employability for technical skills is consistently lower than for non-technical skills across all tiers. For instance, Tier 1 colleges recorded a 45% employability rate for technical skills, while the rate for non-technical skills reached 53%.
Technical vs. Non-technical positions: Employability quotient
The employability landscape across various domains reveals distinct disparities between technical and non-technical skills, finds the report, highlighting areas of strength and concern:
Technical Skills
- Applied Mathematics leads the way with the highest employability rate at 72%, showcasing strong job readiness among graduates in this field.
- In the rapidly growing sector of Artificial Intelligence and Machine Learning (AI/ML), 48% of Indian graduates applying for roles are considered job-ready, reflecting a moderate but improving skill match.
- Data-centric roles, such as Data Science and Data Analysis, have an employability rate of 39%, suggesting a need for more robust training and hands-on experience.
Non-Technical Skills
- Project Management has the lowest employability rate among top in-demand non-technical skills, with only 23% of graduates deemed employable, indicating a gap in practical management training and soft skills development.
- On-the-job skills demonstrate higher employability, with MS Office at 61%, Accounting at 60%, and Numerical Ability at 57%.
These figures call for targeted skill development, particularly in areas where employability rates lag behind industry demands, ensuring that graduates are better equipped to meet the evolving requirements of the job market.
Low employability of Indian graduates: A look at key factors contributing to the trend
Here are several factors explaining why only 45% of Indian graduates applying for jobs possess the skills needed to meet the rapidly changing demands of the industry:
Mismatch Between Curriculum and Industry Needs: Indian universities often focus on theoretical knowledge rather than practical skills that align with industry requirements. This disconnect leads to graduates who may excel academically but lack the hands-on experience or technical competencies demanded by employers, resulting in lower employability rates, particularly for technical roles.
Limited Emphasis on Soft Skills Development: While technical skills are critical, the growing importance of soft skills—such as communication, teamwork, and critical thinking—remains undervalued in many university programs. This oversight contributes to graduates who are not only technically unprepared but also lack the interpersonal skills necessary for success in the workplace, particularly in non-technical roles.
Inequality in Skill Development Across College Tiers: Employability rates show minimal variation across college tiers, indicating that all institutions may struggle to equip students with the skills needed in today’s job market. The similar employability rates across Tier 1, Tier 2, and Tier 3 colleges suggest a systemic issue within the higher education framework that fails to adapt to evolving industry standards.
Inadequate Preparation for Technical Roles: Despite the high employability rates in non-technical jobs, the report reveals a concerning trend: Graduates are significantly less prepared for technical roles, even in high-demand fields like AI and data science. This raises questions about whether Indian universities are adequately training students for careers in critical and rapidly evolving sectors, leading to a surplus of degrees without corresponding job-ready skills.
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