Does Your Major Matter?

Two reasons for college students to breathe easier about their future.

On this blog, I write a lot about how college-educated workers in India and other developing countries are now able to compete globally for jobs.  It's a growing problem that most US students don't know much about.  After all, we're much more concerned about job competitors in our same state!       

Luckily, the job outlook is not as gloomy as I sometimes make it out to be.  Many jobs will go overseas--even some that we college graduates thought were untouchable--but there are many reasons that companies will want to hire college students here too.       

Still, as college students, it's nice to read articles like this one published on Saturday by the Associated Press. Apparently, even as demand for cheap labor soars, and the international connectivity makes outsourcing possible for jobs requiring a college major, India is beginning to find skilled workers in short supply.   

India has 1.03 billion people and a huge English speaking population. Over the past 15 years, college enrollment has skyrocketed.  Over 400,000 new engineers graduate every year from their universities.  Indian workers do everything from accounting to graphic-development for video games--for less than half the price of workers in developed countries.

The Associated Press article, however, gives college students hope on several levels.  First, it brings up the fact that many Indian college graduates are not ready for prime time when they graduate from college.

Since schools in India focus on memorization and tests scores, "'everything else is forgotten: the capacity to think, to write, to be logical, to get along with people' said Mohandas Pai, human resources chief for Infosys Technologies "The focus is cram, cram, cram, cram."       

Companies are complaining that many Indian college graduates have "trouble with such professional basics as working on a team or good phone manners."  Basic communications skills can be nonexistent.       

And that's not the only reason we can relax a little.  Another problem faced by India can be described by the article's headline "India high-tech industry out of workers." Indian universities are often operating below international standards--sometimes even with textbooks that are decades old--companies are faced with a shortage of qualified workers.  Many experts say that of India's 400,000 yearly engineering graduates, only about 100,000 are qualified to join the job market. 

James Friedman, an analyst who has studied the issue, reports that over 500,000 qualified people would apply for 50,000 jobs when outsourcing to India first heated up in 2000. Now that Indian firms want to hire around 180,000 people a year, however, there are only between 100,000 and 200,000 applicants who are capable of doing the job.  And workers are becoming more scarce by the day.

Suddenly, the law of supply and demand no longer works so well for India.  Fewer workers for more jobs = higher wages.  Since much of India's outsourcing appeal is in the low wages, this will be a big problem for international companies.

So, even though outsourcing will be an issue facing college students, the article gives reasons to breathe a little easier.  Many international companies will not be so excited about the coming higher wages in India and needing to spend money just to bring workers up to speed.

More Jobs Without Borders

Career Hub, an excellent blog for job seekers, just wrote about how employees of the Boston Globe are protesting the outsourcing of their jobs to India.

You're probably wondering if you read that correctly.  A major American newspaper is outsourcing to Bangalore? It's true.

And they're not the only one.  Manufacturing jobs being sent overseas is old news, but many companies are sending highly-skilled, college-degree-requiring jobs away too.

• At call centers, like AOL’s hub in Bangalore, employees earn $300/month.
• Stock market analysts in Bangalore make $15,000/year.
• The 70,000 accounting graduates coming each year out of Indian universities start work at $100/month.
• Indian MBAs earn only $12,000/year for financial analysis.
• Indian graphics artists doing movie special effects earn only $5000 a year.
• GE has several thousand PhD scientists working on cutting edge projects at its research and technology centers in Bangalore.
• “Personal remote executive assistants” who will do anything up to creating a complete PowerPoint presentation and finding relevant research overnight, can be hired in India for $2,000 per month.

Because Indian workers are able to work for such a pittance, they now being used by foreign companies for business, administrative, clerical and IT support functions.*  US financial service industry are projected to save approximately $30 billion from outsourcing--enough money that it doesn't matter to them that they will have to get rid of 8% of their American workplace.

Here's a few more jobs that are being sent over to India:

• In Bangalore alone, Intel employs 1,800 electrical engineering and computer science PhDs to design their next generation of microprocessors.
• Insurance-processing service Wipro uses 2,500 university graduates to deal with insurance claims.
• Global management consulting firm A.T. Kearney predicts that a half-million financial service jobs will be transferred to low-cost places like India before 2010.
• Non-profit labor analysts RAND Corporation estimates that 500,000 financial service jobs will be moved to India within the next five years.
• In 2005, an estimated 400,000 tax returns were done in India.

Students just about to graduate will be no longer be entering a stable workplace where job competition come from college graduates in the same city.  The rise of offshoring has changed the value of human capital in the US and today's college graduates will be entering into a completely new competitive job environment.  As a result, college grads need to work on their intangible skills--the human interaction and higher-level thinking skills that cannot be easily sent overseas.

* A pittance in American terms.  Cost of living in India is significantly cheaper than in the US.

(Books used as sources after click through.)

Why Graduating From College is like Jumping off a Moving Train

Graduating college has always been a stressful experience for young people, but today it's becoming even more intimidating.  Less job security, increased job competition from around the world, high college tuition and a lot of other real-world pressures have all combined, and the result is that many college students are terrified about what will come next!

In fact, graduating college can be a lot like jumping off a moving train!  I would never recommend jumping out of a train to anyone, but there are some situations where you might have to do it just to survive.  (For example: a terrorist situation, a faulty bridge, James Bond casting call.)  In today's fast-changing workplace, graduating college is also a survival necessity for future employability.

So, for all those soon-to-be college graduates, here's my top five reasons that graduating college is like jumping off a moving train!

5.  You need to look before you leap.  It's much easier to close your eyes when you do a scary jump.  However, if you close your eyes as you're coming out of college, you'll probably miss some opportunities.  Career success books are full of stories about people finding incredible networking opportunities in the strangest places and then eventually landing the job of their dreams.  By keeping your eyes open, you'll end up in a much better place.

Photo: Many thanks to mulder.hu

In Memory of The Organization Man

A little over a week ago, a book you've probably never heard of celebrated its 50th anniversary.  Published in 1956, William H. Whyte's The Organizational Man described the rise of the "for the company" culture of large organizations that rewarded workers for their loyalty and continued employment.  This book was barely even noticed when it was published, and I doubt that many of us have read it today, but its anniversary was still significant enough to warrant an article featured in the New York Times.

 
Why?  What relevance does a 50 year old book on the business world have to do with the workplace today???

Don't tell my boss about this one!

In The World is Flat, author Thomas Friedman exposes a new type of job competition that I personally wish didn't exist for my own job security.

In India, executives can hire “personal remote executive assistants” for only $1,500-$2000 per month.  These assistants not only happily create PowerPoint presentations for their boss and find relevant research to support the presentation, but they will also do it overnight (during their daytime).  Then the whole shebang will be waiting in their boss's e-mail account when he or she wakes up the next morning.

Granted, as a recent college student, I'm also capable of extending my working hours through the night on occasion, and I've heard that I make a mean PowerPoint... but I still can't compete with India.  I desperately need to earn more than $1,500/month to pay off my college debts.

So please don't tell my boss!  I can't afford to lose my job yet!