IT slowdown: Engg grads unemployment risk

It isn't intended to crush young dreams. But for over a million engineering students who are stepping into placement season this month, Nasscom President Som Mittal's confirmation that IT hiring will indeed decline 22% to 1.8 lakh this year does just that.

"Ten years ago, we could hire half the graduating engineering students, but now, there is global uncertainty, automation, non-linear growth," Mittal told ET even as a new engineering placement season gets underway in a rather bleak economic backdrop. "We cannot provide jobs to all."

As it is, a fifth to a third of engineering graduates run the risk of being unemployed. Many others will take jobs well below their technical qualifications, an ET special feature had reported recently.

That's the environment in which hundreds of non-IIT and second-tier colleges are now getting into a placement overdrive. They are roping in newer industries, inviting more companies, settling for salaries that are much lower than the minimum benchmarks, and encouraging more students to entrepreneurship.

"Last year, we had a placement record of 85%, but this time, we would be happy even if we meet 70% of the target," says Guru Venkatesh, V-P (placement and corporate relations) for Dayananda Sagar Institutions. "Up until 2012, there were companies we would not touch...but this year, we are looking at all."

But top-rung institutes, including the Indian Institutes of Technology, remain relatively insulated. "We have no worries. Only 15% of our students join the IT sector and for our 1,200-odd students (all streams included), salaries are expected to go up as well," said an official from the placement office of IIT-Madras. The average salary has gone up from 8.9 lakh for the batch of 2012 to 11.4 lakh for the class of 2013.

Karnataka-based DayanandaSagar Institutions has around a 1,000 students to place. This year, it has decided that companies will have to share slots from day one. Three companies will be allowed to pick students on the same day; only one was allowed earlier.

"IT companies, which used to be the large recruiters, will hire fewer people, so we are trying to get more firms to make up for the numbers," says Venkatesh.

"In 2012, around 100 companies came. This time, we will try for 200, which includes startups," he adds.

Call them all

Colleges are compromising on salaries too. "Last year, we had few companies offering 3-lakh plus salaries. This year, we are open to more companies with salaries of 3 lakh or so," says an official from the placement team of VIT University, based in Tamil Nadu.

The campus has started its placements with companies like DE Shaw, Flipkart and Ebay.

IT companies, which constitute about 70% of hires, usually come later in the year, around September onwards.

Campus placements for engineering colleges start from mid-July and continue for the next eight months. Initially, those from core engineering industries, R&D and sectors like auto, manufacturing take their pick.

The IT mammoths, which hire in large numbers, come only in September but have said their hiring will be muted. "The overall industry will see muted hiring from campus this year," says Pratik Kumar, executive vice-president for HR at Wipro.

Compared with the 2,30,000 IT jobs created in 2012, only 1,80,000 will be generated this year, according to Nasscom. This year, IT giants will hire in September during campus placements and again in May-June, to bulk up their off-campus placements, Mittal adds.

Alternate avenues

Bangalore-based RV College of Engineering is advocating entrepreneurship for its students. It is looking to garner Rs 25 crore in two years for its entrepreneurship cell. In the past 50 years, 12% of its alumni became entrepreneurs and the college hopes more will follow suit. It wants the 1,000-odd engineers graduating every year to apply for more patents and research projects so that they are picked up by core engineering firms and do not have to bank upon just the IT sector.

Delhi Technological University (DTU) will follow a similar strategy. "We have added 15% new recruiters only for computer science and IT students, keeping in mind that hiring numbers per company may take a hit," says NeerajNimwal, training & placement officer for DTU. "Colleges need to look at other sectors like manufacturing, pharma, biotech as recruiters. In fact, I am more worried about those graduating four years later," says Nasscom'sMittal.

Some have done so without delay.

Bengal Engineering and Science University (BESU) has around 500 students, roughly 180 are from streams like IT, computer science, electronics and electrical engineering. MK Sanyal, professor & head, department of HR Management, says placing all these students is getting more challenging as the scenario gets increasingly competitive. Earlier, if 30 companies used to approach the institute for placements, the first 5-6 would absorb all the students, and the others had to be sent back.

"Last year, we felt the heat when several more companies were required to take on all the students. This year, we will have to accommodate even more companies," he says.