Shortage of skills remains one of the major constraints to continued growth of the Indian economy. This employer survey seeks to address this knowledge-gap by answering three questions: (1) Which skills do employers consider important when hiring new engineering graduates? (2) How satisfied are the employers with the skills of engineering graduates? and (3) In which important skills are the engineers falling short? The results confirm a widespread dissatisfaction with the current graduates. After classifying all skills by factor analysis, the authors conclude that employers perceive soft skills (core employability skills and communication skills) to be very important. The findings suggest that engineering education institutions should seek to improve the skill set of graduates, recognize the importance of soft skills, refocus the assessments, teaching-learning process and curricula from lower-order thinking skills, such as remembering and understanding, toward higher-order skills, such as analyzing and solving engineering problems, as well as creativity, and interact more with employers to understand the particular demand for skills in that region and sector.

Insufficient supply of quality skills is one of the main impediments to economic growth in India. The Indian economy grew more than 8% on an average over the past five years, including the year of the unprecedented financial crisis in 2009. However, the skill shortage is still one of the major constraints in most industries in India (World Bank, 2009a and 2009b).

Information Technology (IT), infrastructure and power sectors, where engineers play a critical role, are particularly in difficult situations when it comes to unmet demand for skills. For instance, the exporting IT sector reported lack of skills as the most serious obstacle for growth, and salaries rose 15% annually from 2003 to 2006 mainly due to the shortage of qualified workforce (World Bank, 2009a and 2009b). The road sector also faces severe shortage of qualified manpower. The sector needs to increase its hiring by at least two to three times of the 2008 level where 6,000-7,000 fresh engineers and diploma holders joined the road sector workforce (World Bank, 2008). In the power sector, the focus is also on the shortage of qualified engineers. The sector needs more skills and knowledge at all levels of the workforce, particularly considering the growing concerns over environmental degradation and depletion of conventional energy sources (Ministry of Power, Government of India, 2007). According to the widely quoted report by the National Association of Software and Services Companies (NASSCOM) and McKinsey (2005), only 25% of the engineering graduates are employable by a multinational company. Many employers give concrete examples on the lack of skills of the newly graduated hires, which the employers link to shortcomings in the education system.

The higher education system has responded to the increased demand for engineers by massively expanding the production of engineers. The number of students enrolled increased 800% from 1998 to 2008 (MHRD, 1998-2008). This quantitative expansion is widely perceived to have led to an average decline in the quality of the students entering, the teaching and, consequently, the quality of the graduating engineers (Gautam et al., 2010).

Soft Skills Journal, Employability, Skill Sets, Newly Graduated, Engineers, India, A Study.