Indian Graduate Employability Dips, but AI Skills Surge: A Mixed Landscape for Job Seekers

Employability of Indian Graduates Drops in 2024, But AI-ML Skills Soar to 46%

Indian graduates are gearing up for future job roles, but are they ready enough? Everyone is talking about artificial intelligence and how we must master it to be job-ready. As companies adopt and integrate AI to stay competitive and drive innovation, the demands on emerging talent continue to grow. This begs the question: Are Indian graduates equipped with the skills needed to thrive in today's AI-driven workplaces? The latest India's Graduate Skill Index 2025 report by Mercer | Mettl indicate that the overall employability of Indian graduates has declined slightly, dropping from 44.3% in 2023 to 42.6% in 2024. However, this decrease was mainly due to lower employability in non-technical roles, whereas technical roles have experienced an upward trend. Notably, 46% of graduates are now employable in AI and machine learning positions, showcasing a significant improvement in proficiency in these technical skills. The report also projects that India's AI market will reach $17-22 billion by 2027, growing at a CAGR of 25-35%. In the report, Siddhartha Gupta, president of Mercer India, mentions, "Technical proficiency in AI and data analytics is no longer a niche requirement; it has become fundamental across various sectors. Graduates must embrace a mindset of continuous learning, equipping themselves with the tools to navigate this evolving landscape." Several factors contribute to the decline in employability for non-technical roles, including a less structured learning path for non-technical skills and the rapid change in employer expectations. When it comes to technical skills, UI/UX skills come a close second to AI-ML, with back-end developer skills taking a backseat (as evident in the infographic above). The report further reveals that the employability gap between technical and non-technical roles varies across college tiers. Tier 1 colleges exhibit the highest employability for both types of roles, while tier 2 and tier 3 colleges display high proficiency in technical roles but lag behind in non-technical skills. This disparity underscores the need for a more inclusive approach to skills development that caters to the diverse needs of graduates from different educational backgrounds. However, the difference is not huge, which means tier 2 and tier 3 colleges have good potential. Furthermore, male graduates have a marginally higher employability rate overall and in technical roles than their female counterparts. However, women graduates exhibit higher employability in certain non-technical roles, such as digital marketing and human resources. "About 43.4% of male graduates who apply for jobs are employable, while employability is 41.7% for the females," the report states. Interestingly, 70% of current Indian college students are looking forward to joining IT companies. While the IT industry saw a slump in the number of graduates hired, industry experts anticipate a turnaround in the near future. But what is the reason behind this gap? In an interview with AIM, Ankit Anand, founding partner at Riceberg Ventures, highlighted, "The talent pool here is extremely limited even though IITs churn out around 10,000 engineers a year." In a report about Indian CS graduates, a developer previously told AIM that despite the saturated market, he struggled to find a job due to insufficient skills. He mentioned having to undertake unpaid internships for over a year because universities did not teach the skills that the employers demanded. Hence, a close collaboration between the industry and academia is crucial to improving the skill set of Indian graduates. The Graduate Skill Index 2025 report paints an elaborate picture of the employability landscape for Indian graduates. While the growing proficiency in AI-ML skills is encouraging, the decline in non-technical skills and the persistent gap between technical and non-technical roles raise concerns. Soft skills are one of the contributing factors to ensuring better chances in the AI-augmented job world. To prepare for the future of work, educational institutions, industry leaders, and policymakers need to work together to cultivate a workforce that is not only skilled but also adaptable and resilient. This focus needs to be on strengthening the curriculum for technical and non-technical skill development, promoting a culture of continuous learning and upskilling, monitoring the requirements of in-demand skills and updating the curriculum accordingly. Companies can also make a difference by helping fresh graduates upskill quickly. Atiya from ABB, an industrial robot supplier and manufacturer, shared insights into ABB's hackathons and training programs, including a recent initiative in India that trained 2,000 employees on AI on the same day and generated over 200 new AI use cases. The digitally savvy youth in India have access to online resources, courses, and distance learning materials to upskill. This could mean better upskilling opportunities. By addressing these challenges and investing in the development of a well-rounded workforce, India can ensure that its graduates are not just job-ready but future-ready.

Employability of Indian graduates dips in 2024, AI/ML skills surge, Mercer-Mettl report finds

Overall employability of Indian graduates who apply for jobs dipped in 2024 compared to the preceding year, but their proficiency went up for artificial intelligence (AI) and machine learning (ML) roles, according to the Mercer-Mettl India Graduate Skills Index 2025 shared exclusively with ET. In 2024, 46% of graduates were employable in AI/ML-driven roles, up from 40% in 2023, as per the study, on which the index is based, covering more than a million students across 2,700-plus campuses. In contrast, increasing expectations from new talent - amid an increase in demand for graduates with a mix of technical and non-technical including soft skills such as learning agility and adaptability - resulted in a marginal decline in employability of Indian graduates to 42.6% in 2024 from 44.3% in the previous year. The drop resulted from non-technical or soft skills while employability in technical roles saw an increase. This happened because, even as employer expectations continue to evolve and graduates acquire new skills to become job-ready for an AI-enabled workplace, non-technical skills have a less structured learning path and require more time to develop than technical skills. "Younger talent has realised that they need to gear up to ride the AI wave," Siddhartha Gupta, president, Mercer India, told ET. While many institutes are integrating AI/ML courses into their programmes, sometimes through partnerships, many students are upskilling independently through online courses or distance learning resources, he said, adding, "The way things are changing, sometimes syllabus changes can't keep up." The most popular courses among Coursera for Campus learners in India focus on in-demand skills such as AI, ML and Python programming, said Raghav Gupta, managing director, Asia Pacific and India of online course provider Coursera, adding that the vast majority of such students come from engineering and tech backgrounds. "Students equipped with in-demand skills like AI and ML hold a clear advantage in the job market," he said. Gender-wise employability numbers show parity in AI and ML and data science roles, the Mercer-Mettl report showed. Females were more proficient than male candidates in digital marketing and human resource associate roles. Indian graduates displayed high employability in communication skills, critical thinking and leadership skills at 55.1%, 54.6% and 54.2%, respectively. However, when it came to creativity as a skill, the overall employability lagged at 44.3%. As per the study, 28% of employers said that a significant transformation of technical skills would be required for a third of their talent base in 2025 to remain competitive in the corporate world. Significantly, despite the upheavals in the sector, 70% of the current Indian college students still aspire to join IT companies. Graduates from Tier-1 colleges saw the highest employability for both technical and non-technical job roles at 48.4%. While second-tier colleges had an overall employability of 46.1%, third-tier colleges had a slightly lower employability of 43.4%. Second-tier colleges saw the most significant year-on-year decline in employability, particularly in non-technical roles. The study entails an in-depth evaluation of more than 2,800 specific skills and sub-skills. Proficiency in these core skills determines the employability in specific technical and non-technical roles, adding up to overall employability numbers. The performance of the candidates is compared against skill benchmarks.

Non-tech graduates in India struggle as AI reshapes jobs

Non-tech graduates in India are finding it difficult to adjust to AI-driven changes in the job market. Despite strong employability in AI roles, non-technical skills lag behind industry needs. The employability rate for non-tech graduates has dropped. Graduates need improved soft skills and adaptability to stay relevant. Educational institutions must focus on holistic skill development.India's job market is undergoing a transformation with the increasing influence of artificial intelligence (AI) and automation, and non-technical graduates are facing growing challenges in securing employment. According to Mercer | Mettl's Graduate Skill Index 2025, overall graduate employability has dropped from 44.3% in 2023 to 42.6%, primarily due to declining opportunities for non-technical roles. "The India's Graduate Skill Index 2025 provides a comprehensive analysis of job readiness among Indian graduates, based on an extensive evaluation of over 1 million students spanning 2,800 skill sets," said Siddhartha Gupta, President, Mercer India. "While technical roles are seeing improved employability, developing non-technical and soft skills remains a challenge that requires urgent attention." The study, which analyzed data from over 2,700 campuses and one million learners, highlights a widening gap in required skills for non-tech professionals. While AI and machine learning (ML) proficiency have emerged as strong areas for Indian graduates -- showing a 46.1% employability rate -- non-tech graduates are struggling to keep pace with the demands of an evolving job market. Soft skills remain a critical factor in employability. Nearly 50% of graduates demonstrate essential skills for AI and Generative AI collaboration, with strengths in communication (55.1%), critical thinking (54.6%), and leadership (54.2%). However, creativity -- a key skill for adapting to automation-driven industries -- lags behind at 44.3%. Experts suggest that improving problem-solving and innovative thinking could help non-tech graduates stay relevant. Despite the challenges, opportunities still exist in specific non-technical roles. Financial analysts and sales or business development professionals report the highest employability rates among non-tech fields at 45.4% and 45.3%, respectively. These roles require strong analytical and interpersonal skills, areas where non-tech graduates can focus their efforts to enhance job prospects. The study also underscores regional and institutional disparities. Graduates from Tier 1 colleges continue to lead in employability at 48.4%, with Tier 2 (46.1%) and Tier 3 (43.4%) institutions showing potential in specialized areas such as UI/UX development. Delhi remains the strongest region for employability at 53.4%, followed by Himachal Pradesh and Punjab at 51.1%. As AI-driven job roles expand, the need for continuous learning and upskilling is becoming more evident. With a 46% employability rate for learning agility, adaptability to new technologies is emerging as a key factor for career growth. Addressing these skill gaps through targeted training programs and curriculum reforms could help non-tech graduates navigate the changing job landscape.