Which engineer gets a job?

Transcription

1 Which engineer gets a job? The engineering degree has emerged in India as one of the most preferred higher education qualification to get a well-paying job leading to a life of dignity. The large demand for the degree has led to the engineering seats grow by more than 200% 1 in the last 10 years. A number of large companies in the IT space hire from engineering colleges in several thousands every year. Other than these, companies in other engineering domains such as mechanical, electrical or electronics and a long tail of small and medium sized enterprises hire fresh engineers in reasonably large numbers. Despite the large number of jobs, their numbers do not add up to the engineering graduating class each year, which exceeds 700,000. In such a scenario, it is important to find out which engineers get a job and which do not. Do the most meritorious students get a job? Do engineers face certain barriers and bias in the job selection process? These are important questions. Firstly, it helps us find out whether the engineering employment ecosystem is open and equitable, where the individual s employment outcome is just a function of his/her capability to do the job and not of other factors. Second, this provides an opportunity to recognize the biases and barriers, if any, and seriously look at interventions to correct them. To study this, we surveyed a stratified sample of engineering students from across India who graduated with an engineering degree in All these students had taken AMCAT, 2 a test of employability, while they were in their final year.they were surveyed May to July 2013, at a time when bulk of entry-level employment has taken place. These students were surveyed on several parameters about their employment outcome. The primary input relevant for the immediate study is whether they had a job and the salary they were drawing 3. For the purpose of simplicity, salary was considered as the sole parameter to rank job offers. A set of parameters about each candidate were identified which included the candidate AMCAT scores in various parameters and the relation of the employment outcome with these parameters was found by a regression analysis. Two regression analyses were performed. In the first, the dependent variable Other outcomes like opportunity to face a company s selection process, interview opportunity, the kind of job profile and company made them offers was also captured and used in a separate analysis.

2 was whether the person got a job or not and logistic regression was used to find the relationship of candidate parameters with it. In the second, the set of candidates with a job were considered and a linear regression was performed to predict the salary of the individual. It is important to note that every candidate in this study had taken a standardized test of employability called AMCAT, which measures their capability to succeed in jobs 4. The parameters measured in AMCAT have been validated globally as highly predictive of job success and independently verified by Aspiring Minds through various validity studies within corporations. Interestingly, this provides us a way to control for merit, since AMCAT scores are used in the regression analysis. We can find out what other factors control job outcome when controlled for merit (AMCAT scores) of the candidates. This is extremely useful, since without such a control, any study pointing group differences in outcome get drowned in debates of differences that may exist in the ability of the group. In the next section, we discuss the characteristics of the data set and the choice of independent and dependent variables. This is followed by the results of the regression analysis followed by observations and inferences. I. Data set The properties of the data set are provided in Table 1 below. Parameter Statistics Gender ratio Males: 65.23% Females: 34.76% Mean AMCAT scores (standard deviation) English:485 (99) Logical: 469 (91) Quantitative Ability: 504 (141) % candidates in different tiers of college* Tier 1: 30.81% Tier 2: 43.55% Tier 3: 25.64% % candidates in different tier of cities (college location)* Tier 1: 48.65% Tier 2: 42.51% Tier 3: 10.87% Mean school and college percentages (standard deviation) 10 th : 79.10% (9.64% points) 12 th : 76.11%(11.61% points) College : 70.77%(8.04% Points) % candidates with a job 18.08% Mean salary of candidates with a job (standard deviation) Jobs in different sectors * The meaning of these terms is explained in text lacs (1.01lacs) IT: 71.47% Core Engineering: 18.85% Others (analyst, sales, customer service): 9.69% Table 1: The Data Set 4 The possibility of any bias entering the sample because of AMCAT-uptake is discussed in Data limitations.

3 Each college in the sample set was assigned as tier 1, 2 or 3. The tier of the college is based on the mean score of its students in final year in AMCAT. All colleges that participated in AMCAT (with a participation rate of more than 75%) in 2012 and 2013 were ranked according to their mean scores. The colleges in the first 33% were assigned as tier 1, the next 33% as tier 2 and the rest as tier 3. The thresholds for different categories remained stable across the two years. The tier of the college primarily captures the mean quality of the student from an employability perspective and is amalgamation of both the input quality of students and what they gain in college. The parameter strongly correlates to public perception of these colleges. The tier of city is allocated according to the population of the city. Cities with population above 25 Lacs are qualified as tier 1, above 5 Lacs and below 25 Lacs are qualified as tier 2 and the rest as tier 3. The male to female ratio is similar to engineering population male-to-female ratio (1.86). The mean AMCAT scores of the sample had no significant difference from the mean AMCAT scores of the engineering population. Data limitations: Before we define the independent and dependent variables, we discuss the possible biases in the data by the virtue of it being of those who took AMCAT. There are two possible biases: a. Is there a self-selected group that takes AMCAT whose nature is different from those who do not? b. Do the employment outcomes of students who take AMCAT change from the rest of the group? With regard to the first possibility of bias, it may be considered that AMCAT is today taken by more than 20% of the final-year engineering population annually. It has pan-india presence and penetrates across all tiers of cities and colleges. For more than 70% colleges where AMCAT is conducted, the test uptake rate is more than 75% of the final year students. There is hardly any self-selection at the college level. With regard to selection at the college/region level, a stratified sample of colleges was used for the purpose of the survey and this study. We now consider the second possible source of bias. Corporations use AMCAT in two ways. In the first, they use AMCAT as an assessment service. They themselves pick colleges they want to recruit at, conduct AMCAT, prepare a shortlist according to scores, interview and hire. In the second, companies can directly use the database of students pre-assessed by AMCAT at campuses to shortlist, interview and hire. In such case, the companies directly use the database of students who take AMCAT at college (a subset of same was surveyed in this study). Around 550 companies currently use this service.

4 From the standpoint of using AMCAT as an assessment service (former case), its effect on the employment outcome is a correct evaluation of the current situation. It is not a bias created by the experiment, but very much a part of the current recruitment system. What may only be objected to, is that a high correlation of AMCAT with job-outcome is a self-fulfilling hypothesis. Also, given that AMCAT scores are used to give jobs, people with AMCAT scores may be positively disposed to get more jobs and those of different types. This is not the case, since only 13.4% of the jobs for the survey were by AMCAT customers, leaving a large number of them to other sources. This clearly shows that the current study captures the effect of the various ways jobs are provided in India, where AMCAT is a reasonable portion of the system. II. Dependent and Independent variables Two dependent variables were considered. The first is a categorical variable, which measures whether a person got a job or not. The second variable is the annual salary of the job offer as self-reported by the candidate. For simplicity, we use just the salary of the candidate as a measure of how good a job did the person get. The following independent variables were considered: a. AMCAT scores: The AMCAT scores of English, Logical ability and Quantitative Ability were considered. AMCAT is a standardized test of employability with a score range between English is required for a majority of jobs after engineering, given the services nature of Indian economy. Logical ability and quantitative ability consistently show high correlation with job success in engineering jobs and tests on the same are used by majority of companies in their hiring process. AMCAT also has domain modules such as computer programming, electronics and semiconductor, mechanical engineering, etc. Each candidate takes the AMCAT module according to his/her branch. To create a single variable, the percentile of the candidate in his/her respective module was considered. Thus, there were four variables linked with AMCAT scores of the student. These variables are important to control for merit when we look at the relation of other parameters with employment outcome. b. School and college percentages: School and college percentages are visible signals related to students available to the recruiter. We wish to understand whether they have any significant bearing on the employment outcome. We have previously shown that some large companies

5 use thresholds on these percentages to allow candidates for selection process, which systematically disenfranchises meritorious students from the employment ecosystem [Aspiring Minds ]. c. Gender (Male=1, Female=0): We wish to investigate whether the gender of the person has any bearing on the employment outcome. d. Tier of college (ordered categorical variable): We wish to investigate whether candidates with similar ability but different tiers of college have different employment outcome. Aspiring Minds has claimed for long that since companies only visit the top 33% colleges for recruitment and there is no other credible signal apart from college name in entry-level hiring, meritorious students from lower tier students are systematically disadvantaged. e. Tier of city (ordered categorical variable): We wish to see whether the tier of city leads to the availability of different number and nature of jobs and eventually different job outcomes for colleges in these areas. Also, given that lower tier of cities have lesser accessibility and visibility, they may also attract lower number of large recruiters. f. Branch of study: The branch of study variable was set 1 if the candidate was from computer or electronics related branches and set to 0 otherwise. The largest recruiters in the market are IT companies and all the large IT recruiters only hire from computer or electronic branches. IT SMEs are generally more open, but automatically students from computer or electronic branches have high propensity of clearing their selection process. We wished to investigate whether candidates in other branches are systematically disadvantaged in the employment ecosystem despite having equal merit. g. AMCAT personality scores: AMCAT personality scores [AMPI] were considered not as much to measure job-readiness (merit), but because they could influence a job search behavior. A candidate who is extroverted shows a stronger job search behavior. Agreeable and open candidates have higher chances of cracking a job interview. Candidate who could multi-task may continue job search behavior together with their studies. Are these personality traits helpful in getting a job? To test this, hypothesis, we included the sum of extraversion and agreeableness scores, the openness to experience score and the polychronicity score as three variables in the analysis. 5

6 III: Results I. Who gets a job: Logistic regression A logistic regression was done with the output variable as 0/1 (no job offer/job offer) and independent variables as described in the previous section. The results are provided in Table 2. The total correlation coefficient was 0.32, which was significant. Variable coefficient p-value Unit of change* Odds (e^(coefficient*unit)) English score Quant Ability score Logical Ability score Domain Percentile th class percentage th class percentage College Percentage Gender Tier of college Branch of study Tier of city Openness to Experience score Extraversion + Agreeableness Score Polychronicity score Constant * The unit of change has been taken according to what constitutes a reasonable change in the input variable to see the effect of this change on log odds. Table 2: Results of logistic regression Understanding the table: Coefficient: It is the weight of the variable (example English score, Quant Ability score etc.) in the regression equation which links all these variables to the probability of getting a job. See Logistic Regression equation here equation here:

7 Logit(π) = (English score)* (Quant Ability score)* (Logical Ability score)* (Domain Percentile)* (10th class percentage)* (12th class percentage)* (College Percentage)* (Gender)* (Tier of college)* (Branch of study)* (Tier of city)* (Openness to Experience score)* (Extraversion+Agreeableness score)* (Polychronicity score)* P-Value 6 : It is a measure of significance which ranges between 0 to 1. The finding of a statistical calculation is considered to be significant if p-value is less than Odds: It is the ratio of probability of a candidate getting a job to the probability of a candidate not getting a job. For example, If the probability of getting a job is 30%, log odds are 0.42, i.e. 30/(100-30) Unit of change: It is the amount by which we change the variable to see its effect on log odds. One may observe the following: a. AMCAT English score, Logical Ability score, domain percentile, College Percentage, tier of college and branch of Study are significant predictors of employment outcome. Among these English has the largest effect, followed by college percentage, branch of study and AMCAT logical ability, followed by tier of college and domain (small but significant contribution). Whereas AMCAT scores, college percentage and being from IT branch of study have a positive impact on job outcome, coming from a lower tier college has a negative impact on the employment outcome. b. Class 10th percentage and class 12 th percentage (with the wrong sign) have a reasonable effect size. However, they do not come as significant on the current sample size. c. AMCAT Quantitative ability scores, tier of city or the personality scores have no significant or large impact on employment outcomes. We also did a regression with significant variables only which is provided in the Appendix. One may understand these results better if we look at the effect of individual parameters and their combinations: a. A candidate with an AMCAT English and Logical score higher by 100 points each and domain percentile up by 10 points has 54% higher odds to get a job. If the candidate also has his college percentage higher by 10%, then his odds to get a job increase by 79%. On the other hand, having higher 10 th and 12 th percentages, even though visible to corporate and recruiters, have no bearing on the employment outcome. This clearly shows that merit counts in the 6

8 employment market, whether or not the signal is explicitly visible. Meritorious students get jobs more often than others. If we assume that employment outcomes are efficient (or partially so), these results are a strongly testimony of the validity of AMCAT scores in predicting job success. It is important to note that there isn t much evidence that AMCAT scores were visible to recruiters, yet they come out as valid predictor of their employment decision. This provides added evidence to AMCAT s validity other than the various studies where AMCAT has shown to be a valid predictor of job success (Aspiring Minds ). On the other hand, the visible high school percentages do not turn out as valid predictors, even though the college percentage does. This indicates that companies do provide a high weight to the college performance of the candidate in offering a job. One may not clearly discern whether college performance really predict job success from this analysis, but definitely the corporate or recruiters believe they do so. b. The college tier comes as the most significant factor in determining employment outcome besides measures of merit. A candidate from a tier 2 campus has 12% lower odds and tier 3 campus has 24% lower odds to get a job even if he/she has the same AMCAT scores and academic percentages. Given that entry-level recruitment happens at campus, where companies select only particular campuses for their recruitment program, this bias is not totally unexpected [National Employability Report, Engineers ]. There are also suggestions that submission of resumes/bio-data with high-ranked institutions more often leads to interview calls than others, given the lack of any other credible or standardized signal. One can clearly see that meritorious students in lower tier colleges have a systematic disadvantage and steps need to be initiated to correct the same. c. A non-it branch student has 14% lower odds to get a job even if he/she has the same AMCAT scores and academic percentages. This could be explained by the high availability of IT jobs in the market and a considerably low availability of jobs in other fields. It means that IT branches in engineering are a more lucrative education option than others to lead to gainful employment. 7 cut_campus_hiring_yield_maintained_using _amcat_study.html 8

9 d. The college percentage may not be a valid predictor of job success, given its non-standardization and its lack of emergence of a significant correlate, over and above AMCAT scores, with job success in validity studies done at corporations [Aspiring Minds ]. Also, AMCAT domain percentage captures the effect of domain skills required for job success. Yet we find that college percentage is a significant factor in predicting job outcome over and above AMCAT scores. A person with college percentage lower by 10 percentage points has 14% lower odds to get a job, even though with equal merit. If we to draw the picture of the most disadvantaged student coming from a third tier campus and low percentage (by 10 points), he/she has 25% lower odds to get a job. If he/she comes from a non- IT branch, the odds decrease by 35%. In conclusion, we find that AMCAT English, Logical Ability and domain scores are significant predictors of employment outcome indicating that merit indeed counts in employment outcome. Another visible measure of merit, college percentage, not necessary proven to be a valid job success measure, also has a large effect size on recruitment outcomes. On the other hand, we find the tier of the college of study as the strongest bias, which disadvantages a student of similar merit with his/her counterpart in a high tier school. We recommend that methods be found to reduce or remove this bias from the recruitment market. Finally, we find that students in IT branches of study have a higher likelihood of getting jobs than their counterparts in non-it branches. This clearly indicates that studying in IT related jobs is more lucrative for students to ultimately get a job. 9

10 II. Who gets a better job? An ordinary least squares regression was done with the output variable as salary (in lacs) and independent variables as described in the previous section. The results are provided in Table 3. The total correlation coefficient was 0.57, which was significant. Variable Coefficient p-value Unit of change* Change in salary (in INR thousands) English score Quant Ability score Logical Ability score Domain Percentile th class percentage th class percentage College Percentage Gender Tier of college Branch of study Tier of city Openness to Experience score Extraversion + Agreeableness Score Polychronicity score Constant * The unit of change has been taken according to what constitutes a reasonable change in the input variable to see the effect of this change on salary. Table 3: Results of ordinary least squares regression Understanding the table: Coefficient: It is the weight of the variable (example English score, Quant Ability score etc.) in the regression equation which links all these variables to the probability of getting a job. See Regression equation here equation here:

11 Salary = (English score)* (Quant Ability score)* (Logical Ability score)* (Domain Percentile)* (10th class percentage)* (12th class percentage)* (College Percentage)* (Gender)* (Tier of college)* (Branch of study)* (Tier of city)* (Openness to Experience score)* (Extraversion+Agreeableness score)* (Polychronicity score)* P-Value 10 : It is a measure of significance which ranges between 0 to 1. The finding of a statistical calculation is considered to be significant if p-value is less than Unit of change: It is the amount by which we change the variable to see its effect on the salary. One may observe the following: a. AMCAT English and Logical Ability scores, College Percentage and tier of college have a significant effect on an engineer s salary. b. Gender and 10 th class percentage have a reasonable effect on salary however they do not come as significant on the current sample. c. Other variables like domain percentile, 12 th class percentage, tier of city and branch of study have neither significant nor large effect on salary. Regression was again done with significant variables only and results are provided in the Appendix. On studying the above results we infer the following: Measures of merit, AMCAT English and Logical Ability scores and college percentage are significant predictors of an engineer s salary. One may note that, the recruiter in general doesn t have access to AMCAT scores, whereas the high school and college percentages (GPA) are visible. Higher English & Logical Ability scores by 100 points each and higher college percentage by 10%, translate into a higher annual salary by Rs approx. In case, we consider college percentage to not be a significant factor for job performance over and above AMCAT scores (as discussed in the previous section), this shows a bias. Tier of college of study which, by far, has the highest effect on salary and thus creates a bias. A tier 3 college student with school, college percentages and AMCAT scores equal to his counterpart from a Tier 2 college gets an annual salary lower by Rs approx. This difference in salary goes up to Rs on comparing to an equally meritorious student from a tier 1 college. This means that not only does a comparable student of a lower tier college has a 10

12 low chance of getting a job, but even if he/she gets a job, the salary is in generally lower. This could be due to two reasons. Firstly, companies and job roles with higher salary may not be providing a job opportunity to lower tier students. Thus students at these college do not even get a chance to get evaluated for high-paying jobs. Secondly, companies may offer differential salary to candidates based on their college. Which of these two factors is dominant is beyond the scope of this study. Either way, this shows a bias in the recruitment process not healthy for either the student or corporations. In an healthy employment ecosystem, students with similar merit should get similar salary irrespective of other parameters. On comparing the findings to the previous analysis on who gets a job we see that same variables like AMCAT English & Logical Ability, College percentage and Tier of college come out as significant. On the other hand, we find that 10 th and 12 th percentages have no significant effect on employment outcomes.

13 Conclusion We find that merit does count in the employment market both in determining whether one get a job and the quality of job as signaled by salary. Both explicitly non-visible measures of merit (such as AMCAT scores) and those visible but not necessarily correlated to job success, are significant predictors of job outcomes. Interestingly, among visible measures of merit, college percentage comes as a consistent significant and high effect-size predictor as compared to high school percentages. If, in case, college percentage are not valid predictors of job success beyond AMCAT scores, as shown by studies, this creates bias in the employment market. On the other hand, the tier of college of study comes out as a major bias in the employment market. Equally meritorious students from lower tier campuses get jobs less often and with lower salaries compared to their counterparts in high tier campuses. We understand this happens because companies use the tier of college as a primary signal in determining who to interview. This manifests in forms of choosing only particular campuses for their campus recruitment programs and also only considering job applications of students from particular campuses for an interview opportunity. There is an urgent need to pluck out these differences from the employment market by making available more credible signals of merit on a large scale. It is also observed that students in IT branches are more likely to get a job and those of higher salaries than their counterparts in other branches. This is not surprising given the high availability of good quality jobs in the software domain. We do not find any significant impact of gender, personality scores, tier of city of college, etc. on employment outcomes.

14 Appendix 1. Logistic Regression with significant variables only Variable coefficient p-value Unit of change Odds (e^(coefficient* unit)) English score Logical Ability score Domain Percentile College Percentage Tier of college Branch of study Constant Ordinary least squares regression with significant variables only Variable coefficient p-value Unit of change Change in salary (in INR thousands) English score Logical Ability score College Percentage Tier of college Intercept