Indian students' interest in engineering is dropping and expected to slump even more, here's why

Over the past few years, there has been a consistent drop in the number of students enrolling in engineering and technology courses. According to TeamLease Edtech co-founder and president Neeti Sharma, this trend will continue as IT companies hire fewer people.

“Over the past few years, there has been a steady decline in the number of students enrolling in engineering and technology courses. For example, the enrollment in BTech programs fell from roughly 40 lakh in 2016–17 to 36 lakh in 2020–21.

“In the past five years, BTech and BE courses have seen a steady decline as job opportunities in core streams have diminished. The overall fresher hiring by IT companies has declined from 26 per cent of overall passouts in FY22 to 15 per cent and 10 per cent in FY23 and FY24, respectively,” Sharma told PTI.

However, she noted that there is some light at the end of the tunnel and courses such as cloud computing, artificial intelligence, and cybersecurity are still seeing niche demand.

“Both current employees, freshers, and experienced candidates have recognised the need to upskill in these specific domains in order to stay competitive in the IT sector. Tier-I IT firms are prioritising digital transformation, data analytics, cloud computing, and such courses in these domains will remain in demand,” she added.

It is expected that there will be a 4 per cent dip in the total IT services headcount in this financial year with a possibility that 2,00,000 could possibly be at risk depending on the campus placement scenario, she said.

“During 2022-23, there was a 9 per cent dip in fresher hiring from the previous year and it is expected that in FY24 there will be a further 5 per cent decrease. Overall, hiring is expected to fall by 40 per cent, according to a recent report. Compared to the previous year, overall fresher hiring is expected to fall around 40-50 per cent and this is for graduates of both FY23 and FY24,” Sharma noted.

She said, with IT companies slowing down their hiring activity, Global Capacity Centers (GCCs) are also expected to fall short by 50 per cent of the overall IT hiring in India.

As tech spends reduce, the net staff addition in major IT firms hit a 5 year low and is projected to remain negative for the rest of the current financial year, she stated.

Sharma further said, amid the recent slowdown in the sector, Tier-I IT firms are pacing themselves and not committing to expensive long-term hiring.

“Most firms in the sector have decided to prioritise internal mobility and lateral hiring with some fresher hiring in the mix as well. Reducing overhead costs and improving the sales pipelines will be the focus going forward with 75 per cent of hiring expected to be internal. However, according to our recent Career Outlook report, the startup ecosystem is slightly different with technology startups expressing a 59 per cent intent to hire,” she added.

She said, there is a need to be cautious in predicting any significant recovery in hiring as the global signals are currently weak.

“The current geopolitical and macroeconomic landscape and other external factors may dictate the speed of recovery. However, since June 2023, the IT sector has seen a slight upward trend. A combination of cost reduction measures through layoffs, reduced inflation in the UK and Europe markets and better global economic stability have led to this mini recovery phase compared to the first half of the year,” she noted.

However, it is difficult to predict whether there will be a full scale recovery akin to the pre-pandemic era due to several variables in the global economy, Sharma said.

Compared to the first week of October 2022, there has been a 20 per cent decline in the number of students placed, she said, adding that “we are likely to witness a significant decline in campus offers compared to the previous year.”

On freshers hiring, Sharma said, as IT firms pivot toward internal talent mobility, there is likely to be a displacement effect for freshers, especially due to the weak sales projections.

IT firms are expected to hire 50,000 freshers between June and December of 2023, primarily from tier II and III cities, she said.

Meanwhile, tier I cities and smaller towns are expected to witness reduced fresher hiring during this period, she said.

“Freshers hired during the previous campus recruitment cycle are being upskilled in Gen AI and other emerging technologies as major IT firms focus on cost reduction and streamlining,” Sharma said.

However, freshers who come with a myriad of skills including technical and soft skills and display high emotional intelligence will always be in demand, she added.

(with inputs from PTI)

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Abhishek Awasthi