8 Reasons Why Engineers are Underpaid

TWALKITOUT: India is a hub of technically skilled labor and the number is increasing every year. According to AICTE back in 2006-07 there were around 5,50,000 engineering students, and around 5500 institutes. In present scenario, the number has almost doubled, with around 9,000 institutions producing around 8,00,000 engineers per year.  There are a lot of answers to why engineers are underpaid. Let’s put some light on a few:

1)      $110 billion outsourcing market is well set and occupied by old players. IT giants have well set policies, structure and training modules, which enable them to train almost any graduate to a level required to get the desired output in almost 60% of the work, and that answers why engineers are underpaid or sit un-employed.

why are engineers underpaid

2)      Recruiters do not look for just a degree, they emphasize on cost cutting and mass recruitment from renowned institutes offering a standard minimum package. The complications of how the CTC is further divided for insurance, PF and performance quotient lands up an engineer lesser amount in hand.

3)      Concepts like variable pay and performance based incentive structure are specially designed to cut the salary cost and leave the engineer underpaid.

                    ALSO SEE: PERFORMANCE BASED INCENTIVE STRUCTURE BY IT COMPANIES

4)      Availability of skilled labor as engineers attracts a lot of work from all across the globe, but it also makes us a cheap labor. Abundance reduces our cost in the global market.

5)      Around 10-20% of the engineers are not skilled up to a level, that creates a monopoly for the employer and the over qualified engineers end up doing underpaid jobs.

6)      Global slowdown is one of the factors that hits the pocket for IT industry.

7)      Around 150,000-200,000 jobs are generated annually in the Indian economy and far too many engineers attack this labor pool. And hence, based on any model of excess supply, engineers are underpaid.

8)      Our education at engineering institutions lacks innovation and specialization to make a graduate engineer skillful enough to deserving ask for high wages.

Increasing competition and immense supply of man power in form of engineers has led to new trend of cost cutting by low salary structure in many MNC’s as well. There are many more intrinsic reasons that raise the question that why engineers are underpaid in India.

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Anuj Sharma

I am based out of Shimla. Writing is my passion, and a part of my livelihood. I started writing here almost 3+ years ago and couldn't stop ever!! Apart from Twalkitout, I run an E-Commerce consulting Company named Omex E-commerce Pvt. Ltd. out of Shimla.

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