India stands at a pivotal juncture with its burgeoning young population—a demographic dividend that offers a golden opportunity for economic growth and societal transformation. However, with new technologies demanding new skillsets, collaboration between campuses and organisations is crucial.
This growing focus on skills is evident in our study “Campus Workforce Trends: Placement Cycle 2024” study. The study reveals a shift within India Inc. towards skill-based hiring and rewards, extending beyond experienced hires to encompass fresh graduates.
As organisations adapt their approaches to skill development and hiring, this transformational period presents both opportunities and potential challenges. Here’s a glimpse:
Bridging the skills gap: theory to practice
Traditionally, Indian universities have prioritised theoretical knowledge. While this remains foundational, it often leaves graduates inadequately prepared for the practical demands of the modern workplace. This disconnect is highlighted by the staggering 22% skill gap reported by the All India Council for Technical Education (AICTE). This mismatch between academic offerings and industry needs creates a talent pool lacking the specific skillsets that the organisations require.
India’s rapid economic transformation, particularly its embrace of technology and sustainability, has birthed entirely new roles. From social selling experts to specialists in big data analytics for computational biology, and more, these emerging positions demand a new breed of graduates with specialised skill sets. This necessitates a paradigm shift within universities, urging them to revamp curriculums and adapt to this ever-evolving environment.
The future is now
The traditional campus hiring landscape, once dominated by technical interviews, has undergone a significant transformation due to the rise of new technologies. This shift has organisations moving beyond purely technical assessments, adopting a more technology-driven approach to evaluating candidates.
Approximately 50% of organisations now utilise a combination of HR interviews, psychometric and technical assessments, digital adaptability assessments, and even gamified elements to identify ideal candidates with the right blend of behavioural and technical skills.
Furthermore, 40% of organisations have begun leveraging Gen AI/AI in their recruitment process. This technology goes beyond keyword searches, scanning CVs based on required skills, candidate experience, and assessment results to predict a campus hire’s potential success in the role.
The use of technology in campus hiring also enjoys strong executive support. Deloitte’s skills-based organisation survey reveals that 80% of executives favour basing decisions on hiring, pay, promotions, etc., on skills rather than job history or network.
This shift prioritises reduced bias and improved fairness. 61% of executives attribute the move to a skills-based approach to the rise of emerging technologies like automation and AI. Automation necessitates job restructuring, highlighting the need for flexible work structures to facilitate continuous adaptation.
Skill or diversity
India Inc.’s gender diversity has seen a modest one per cent increase over the past year, reaching 26% female representation in the workforce (Deloitte’s 2024 India Talent Outlook survey). To accelerate progress, companies are setting ambitious targets for diverse talent acquisition, aiming for 45% and 43% female representation in engineering and management campus hires, respectively. However, these goals are often unmet due to a limited pipeline of female candidates. Engineering and management institutes currently have only 17% and 34% female representation, respectively.
This presents a significant challenge for talent acquisition (TA) teams: how to identify the right skills within a restricted pool of diverse candidates? Companies must balance the need for diversity with the importance of hiring skilled graduates.
Skills-based hiring and pay
The approach to internships and pre-placement offers (PPOs) has shifted to a more skills-based perspective, reflected in a 26% decline in PPOs across all tiers and degrees. The evolving criteria for internship assessment heavily influence this trend. 70% of organisations now prioritise evaluating interns based on demonstrated learning agility, behaviour, and the potential to acquire new skills.
Furthermore, organisations are recognising the value of specific skill sets and offering compensation premiums. For example, students with expertise in Artificial Intelligence can command a 15-20% premium on their starting salaries (Figure 1). The premium amount naturally depends on the urgency of the need and the available talent pool with that particular skill set. Students have recognised this trend, leading to a surge in demand for short-term certification programs in recent times.
Figure 1Note: These percentages mentioned are the premium ranges for the respective degrees.Source – Campus Workforce Trends Survey, Delloite India
A multi-tiered ecosystem
India’s higher education sector is experiencing a boom. The All-India Survey of Higher Education (AISHE) reports a steady increase of approximately 6% in higher education institutions being established over the past seven years. This rapid expansion has bolstered the talent pool, with over 1.07 crore new graduates and post-graduates entering the workforce in 2023 – nearly 0.74% of India’s population.
However, the quality of skill development initiatives varies significantly across universities. Tier-1 institutions often have dedicated skill development centres offering specialised training programs. These programs lead to a significant compensation premium for Tier-1 students, ranging from 42% to 86% across degrees, compared to their counterparts from Tier-2 and Tier-3 colleges which are still developing their programs.
By addressing the challenges of balancing skills with diversity, harnessing the potential of technology, fostering collaboration between educators and employers, and ensuring curriculum agility, we can empower both campuses and organisations to thrive in the dynamic world of work. This collaborative approach will be crucial to ensure a future workforce that is not only skilled but also representative of the diverse talent pool available, driving innovation and economic growth for all.