WSJ: BANGALORE, India—Call-center company 24/7 Customer Pvt. Ltd. is desperate to find new recruits who can answer questions by phone and email. It wants to hire 3,000 people this year. Yet in this country of 1.2 billion people, that is beginning to look like an impossible goal.
So few of the high school and college graduates who come through the door can communicate effectively in English, and so many lack a grasp of educational basics such as reading comprehension, that the company can hire just three out of every 100 applicants.
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."
... Muddying the picture is that on the surface, India appears to have met the demand for more educated workers with a quantum leap in graduates. Engineering colleges in India now have seats for 1.5 million students, nearly four times the 390,000 available in 2000, according to the National Association of Software and Services Companies, a trade group.
But 75% of technical graduates and more than 85% of general graduates are unemployable by India's high-growth global industries, including information technology and call centers, according to results from assessment tests administered by the group.
Another survey, conducted annually by Pratham, a nongovernmental organization that aims to improve education for the poor, looked at grade-school performance at 13,000 schools across India. It found that about half of the country's fifth graders can't read at a second-grade level.
At stake is India's ability to sustain growth—its economy is projected to expand 9% this year—while maintaining its advantages as a low-cost place to do business.
... Trying to bridge the widening chasm between job requirements and the skills of graduates, Tata has extended its internal training program. It puts fresh graduates through 72 days of training, double the duration in 1986, says Tata chief executive N. Chandrasekaran. Tata has a special campus in south India where it trains 9,000 recruits at a time, and has plans to bump that up to 10,000.
Wipro runs an even longer, 90-day training program to address what Mr. Govil, the human-resources executive, calls the "inherent inadequacies" in Indian engineering education. The company can train 5,000 employees at once.
Both companies sent teams of employees to India's approximately 3,000 engineering colleges to assess the quality of each before they decided where to focus their campus recruiting efforts. Tata says 300 of the schools made the cut; for Wipro, only 100 did.
Chinese university graduates would probably perform even worse on tasks requiring English-language skills. However, I do think that the strong performance of Shanghai high school students on recent PISA exams (administered in Mandarin) is a reasonable indicator of education levels in China. That is, although Shanghai averages are likely higher than national averages, the rest of the country is probably not that far behind.