Wall Street Journal has a story India Graduates Millions But Too Few Are Fit to Hire. It reports the travails of the customer support firm 24/7 Customer:
India projects an image of a nation churning out hundreds of thousands of students every year who are well educated, a looming threat to the better-paid middle-class workers of the West. Their abilities in math have been cited by President Barack Obama as a reason why the U.S. is facing competitive challenges.
Yet 24/7 Customer’s experience tells a very different story. Its increasing difficulty finding competent employees in India has forced the company to expand its search to the Philippines and Nicaragua. Most of its 8,000 employees are now based outside of India.
In the nation that made offshoring a household word, 24/7 finds itself so short of talent that it is having to offshore.
“With India’s population size, it should be so much easier to find employees,” says S. Nagarajan, founder of the company. “Instead, we’re scouring every nook and cranny.”
This issue is very familiar to us at Zoho, and I have blogged about this in How We Recruit: On Formal Credentials vs Experienced Based Education. Unlike most companies, we do not start out with the assumption that all of the colleges actually impart an education. That may sound overly harsh or pessimistic, but actually assuming that colleges do not impart an education is liberating, because then you keep your expectations very very low. You learn to devise recruitment and training systems that are tailored for this reality, rather than rely on the paper credentials doled out by various educational institutions. The path to profit in business is to a solve a problem, and I look at educating employees through experience as one of the entrepreneurial challenges to be faced head on, particularly in the context of a developing country like India.
More broadly, even in countries with a highly sophisticated and developed educational infrastructure like the US, much of the real education in highly skilled jobs, particularly in high technology, actually happen on the job. I remember my own experience as a freshly-minted PhD in Electrical Engineering from Princeton, being humbled by how much I had to learn on the job in Qualcomm before I became productive. Much of that learning came from people who were much less credentialed than I was, people who had the benefit of years of experience to guide me. I learned an important lesson on that first job that has stayed with me: never to value someone just based on their impressive paper qualifications. I believe I am not the first to discover this lesson on the job. If that is the case, why do companies rely on a college degree to such an extent in the US?
Ultimately, an impressive college credential from a good college serves to a prospective employer as an extended IQ test, a sort of legal signaling device. In the US, colleges are allowed to base their recruitment on SAT scores (essentially an IQ test), but employers could get in legal trouble if they were to conduct any such tests. So knowing that a college is rigorous in its admission standards is a way to signal prospective employers that the graduates from that college are already vetted. I believe that college credentials as a requirement for most jobs would vanish, if employers were allowed to perform the tests that colleges routinely require of their students.
In a country like India, where so many of the colleges are new, no such signaling mechanism operates right now. So a college degree is essentially worthless as a signaling device, as so many employers in India are finding out. Such being the case, why even rely on the college degree? Why don’t employers take the matter into their own hands, and start imparting training as part of their recruitment effort? Those questions are what led us to create our own training program, which we call Zoho University, to come into being. Today, over 10% of our employees have come from this program, and we expect this ratio to go up to 30% in the next few years, as we expand our program.
So I agree with the thrust of the WSJ article that most graduates coming out of India’s colleges (aka degree mills) are not fit to hire, but I contend that it is the employers that can and should solve the problem. Expecting anything else is a misreading of the actual ground reality of how education and skills are actually acquired.