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'ESDM industry faces employable talent crunch'

Posted: 17 Apr 2013     Print Version  Bookmark and Share

Keywords:electronics industry  semiconductor design  talent  engineering  information technology 

"The success of a nation achieving its future growth objectives depends hugely on talent and human resources development. As a nation or a business grows, it requires upgrading of talent from time to time. Although there is an enormous consumption market in India, there is huge gap between what India consumes and what it is capable of producing," PVG Menon, president of India Electronics & Semiconductor Association (IESA).

As per the IESA-E&Y Task Force Report of 2009, it is estimated that around 1.61 crore people will be directly employed in the semiconductor and electronics industry by 2014. This number is estimated to grow to 2.78 crore by 2020, as compared to the current 44 lakh. According to the report on Manpower for electronics industry, the concentration of manpower is in the manufacturing segment followed by after sales and sales support. R&D on the other hand employs the least number of people. Hence, there is a need to focus proactively on skill development.

In the semiconductor design industry itself, the existence of high competition due low entry barrier will lead to more startups which will again need addition of talent. Therefore talent crunch will be the next major challenge.

In 2006, around 0.22 million students graduated with engineering degrees in India, while in 2015 the semiconductor and allied industries may need 35 lakh new people. The workforce situation may improve, if companies collaborate with universities to create industry specific training programmes to improve the supply of talent. As of 2011, there are 1,522 degree-granting engineering colleges in India with an annual student intake of 5,82,000 and around 1,240 polytechnics with an annual intake of 2,65,000. However, these institutions face shortage of faculty and concerns have been raised over the quality of education. The number of graduates coming out of technical colleges increased to over 7,00,000 in 2011 from 5,50,000 in FY 2010. However, 75 per cent of technical graduates and more than 85 per cent of general graduates are unemployable by India's high-growth global industries, including information technology.

The IESA-DIT report on Study on semiconductor design, embedded software and services industry estimates that the workforce in the semiconductor design industry in India was around 1,35,000 in 2009 and is expected to grow at a compounded annual growth rate (CAGR) of 20 per cent to reach 230,000 by 2012.


Figure 1

The semiconductor design industry is dominated by engineering graduates, who comprise two-thirds of the entire workforce, followed by Master’s degree holders. The industry cites six months to a year for talent graduating from colleges to become deployable and industry ready. The diploma holders are mainly recruited in the board segment.


Figure 2

The type of degree (B.Tech or M.Tech) is an important parameter to determine the proportion of specialised talent available. India has a significant number of post graduates graduating every year and the number has grown substantially in the last one year. However, the number of graduates is still much larger due to the Government’s focus on the first level of higher education.


Figure 3

According to a Nasscom’s Perspective 2020 study, industry is already facing a shortage of employable talent and companies are hiring people who lack skills, but are trainable. An average company invests around 16 weeks to train one employee in areas such as technical skills, soft skills, company orientation and process-specific domain skills. As a result, the training and recruitment cost of technology services companies has risen gradually in the last few years. Recruiting a trainable pool is not a sustainable option going forward. The supply of graduates in India is growing at around 5 per cent a year, with the current average employability rate of 26 per cent for engineering graduates and 10-15 per cent for other graduates.

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