The tab for the poor output has to be picked up by the employers. IT companies, according to analysis done by Nasscom and Evalueserve, spend $1.2 billion every year on training.
Had the engineering schools done their job properly, this money would go straight to their bottom-line.
If you have invested in IT stocks, this should worry you.
Tata Consultancy Services, India's largest provider of IT services, spends 2 per cent of its turnover ($10 billion in 2011-12) on training.
It is now investing Rs 1000 crore in a training facility for 15,000 people in Thiruvananthapuram.
Infosys's Mysore campus has trained 100000 fresh graduates so far, at a cost of $6000-7000 per employee.
That's a whopping $600-700 million knocked out of the company's profits over ten years.
Incidentally, the campus started with a module of 14 weeks which got extended to 17 weeks and now stands at 23 weeks.
"There is definitely a gap between what they study in college and the skills they need at work," says Infosys Senior Vice-president & Group Head (education & research) Srikantan Moorthy.
Image: The new training block at the Infosys Mysore campus.
Image Courtesy: Flickr Commons