Why Are So Many Indian Graduates Struggling to Get Their First Job?

A new report has highlighted a growing gap between what young Indians learn in college and what employers expect them to demonstrate at the workplace, with companies increasingly looking beyond academic degrees while hiring freshers.

According to Gi Group Holding’s report From Degrees to Capability: Redefining India’s Entry-Level Talent Landscape, 64% of employers say fewer than 40% of entry-level candidates clear their initial domain and skill assessments. The study surveyed 1,329 respondents, including 750 employers and 579 candidates and early-career professionals, across 12 sectors and eight major Indian cities.

The shift is particularly stark for graduates from Tier-2 and Tier-3 institutions. Nine in 10 employers said they no longer consider a Tier-2/3 degree as reliable proof of a candidate’s capability. At the same time, degrees continue to act as a hiring filter, creating what the report describes as a “credential paradox”.

Practical experience beats academic marks

The report found that 76% of employers rely primarily on practical proof or workplace exposure when shortlisting Tier-2/3 graduates. This includes certifications, software skills, internships and workplace experience. By comparison, pure academic merit accounts for just 6% of primary shortlisting decisions.

Employers are also placing greater emphasis on whether a fresher can learn and adapt rather than expecting them to enter the workplace with complete domain expertise.

Trainability and learning agility emerged as the most sought-after capability, cited by 59% of employers, followed by functional communication at 52%. Domain readiness was prioritised by only 29%.

Nearly half of Tier-2/3 graduates feel unprepared

The readiness gap is also visible from the candidates’ side. 49% of Tier-2/3 graduates said they felt completely unprepared when entering their first job, while only 19% felt fully prepared.

The contrast was significant among the Tier-1 comparison group, where 67% reported feeling fully ready and only 6% said they were unprepared.

The report says the problem is not simply a lack of qualifications, but whether candidates can apply knowledge, communicate, adapt and learn in a real workplace.

The degree paradox

While employers are questioning the ability of degrees to demonstrate workplace capability, qualifications have not disappeared from recruitment.

The report found that 35% of employers still prefer traditional degree holders over candidates with independent skill certifications for routine entry-level jobs. Among certified non-degree candidates who clear assessments, 46% are evaluated equally with degree holders and 12% are valued higher. However, 31% are still treated as fallback candidates and 11% are automatically rejected.

The report therefore identifies a growing contradiction: a degree may no longer prove that a candidate can do the job, but it can still determine whether the candidate gets the opportunity to prove it.

Where candidates are falling short

Both employers and candidates point to the same major problem during recruitment: the inability to apply practical skills. It was identified as the leading reason interviews fail by 42% of employers and 38% of candidates.

Interestingly, employers cited academic knowledge as a problem only 4% of the time, compared with 16% among candidates—suggesting a gap between what young job seekers believe employers value and what companies actually assess.

Sonal Arora, Country Manager, Gi Group Holding, said the findings point towards a shift to skills-first hiring, with practical experience, internships, certifications, apprenticeships and demonstrable competencies increasingly influencing recruitment.

The report calls for an “Employability Bridge” between education and employment, involving greater workplace exposure and practical learning in educational institutions, more internships and apprenticeships from employers, and greater emphasis on continuous learning among candidates.