Graduate employability and its impact on workforce decisions

As India positions itself as a burgeoning global economic powerhouse, the significance of a skilled workforce has never been more critical. According to the World Economic Forum’s Future of Jobs Report 2025, India is experiencing a demographic sweet spot with a growing working-age population. As a youthful population enters the job market in greater numbers, the challenge of graduate employability emerges as a focal point for businesses and educational institutions. Moreover, the expectations of fresh graduates have also shifted dramatically.

The workplace is undergoing rapid transformation, influenced by several key factors such as technological disruption, geo-economic uncertainty and an age-diverse workforce. Fluctuating markets and economic instability necessitate a workforce that can adapt quickly to changing demands. Companies are recalibrating their workforce strategies to remain competitive, leading to a mismatch between existing skills and those required.

The Mercer | Mettl India’s Graduate Skill Index 2025 reveals that only 42.6% of Indian graduates applying for jobs are deemed employable, a slight decline from 44.3% in 2023. The report also highlights a notable increase in employability for roles in artificial intelligence (AI) and machine learning (ML), at 46% in 2024. This trend indicates a growing awareness among graduates regarding in-demand skills. As Pankaj Khanna, Chief People Officer, Coforge, highlighted, “AI is an evolving field that impacts various sectors positively, and it is crucial for students to understand its nuances today.” This evolving landscape underscores the urgent need for graduates to align their skills with industry expectations, ensuring they are well-equipped to thrive in a competitive job market.

In today’s competitive job market, particularly in an era driven by artificial intelligence and automation, soft skills have become increasingly vital for graduates aiming to distinguish themselves. As technology continues to reshape industries, communicating effectively, thinking critically, and collaborating with diverse teams is more critical than ever. Pankaj Khanna emphasizes this point, stating, “Employers increasingly value soft skills alongside technical abilities. Graduates who can effectively communicate, demonstrate agility in problem-solving, and exhibit confidence in their capabilities will stand out in the job market.”

The Mercer | Mettl India’s Graduate Skill Index 2025 report indicates that 54.6% of graduates are employable in critical thinking, while 46% possess learning agility. However, the employability rate for creativity stands at 44.3%, suggesting that graduates must prioritize the development of these essential soft skills to enhance their employability.

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A robust partnership between industry and academia is essential to effectively prepare graduates for the modern workforce. Santosh Thangavelu, CHRO, Axtria, advocates for integrating practical experiences into education, stating, “The emphasis on practical experience through apprenticeships and hands-on learning in countries like Germany and China highlights the importance of integrating real-world skills into education.” He further noted, “Graduates who participate in such initiatives are often more prepared for the workforce, leading to higher employability rates.”

This collaboration is crucial for ensuring that graduates are equipped with the relevant skills to thrive in their careers. However, the responsibility for employability does not rest solely on educational institutions; students must also take an active role in their career development. Santosh Thangavelu stressed, “The onus of employability is on students, stressing the importance of personal responsibility in career development. By actively developing soft skills, seeking practical experiences, and committing to lifelong learning, students can significantly enhance their employability.”

By fostering a strong partnership between industry and academia, it is possible to create a more effective educational ecosystem that not only prepares graduates for the workforce but also meets the evolving needs of employers in a rapidly changing job market.

As we look towards 2025, it is crucial for organizations to implement strategies that empower new graduates to succeed.

Use data-driven talent assessments

Leveraging data from talent assessments can help organizations make informed decisions about hiring, training, and workforce planning. A data-driven approach ensures that the right talent is in place to meet current and future business needs.

Foster a learning culture

To effectively integrate fresh graduates into the workforce, companies should cultivate a learning culture that emphasizes continuous skill development and adaptability. This involves providing new hires with access to training programs, mentorship opportunities, and resources that encourage ongoing education. By supporting graduates in their professional growth, organizations can help them build the skills necessary to thrive in their roles. This not only enhances the graduates’ capabilities but also contributes to the overall success and competitiveness of the organization.

Build strong onboarding programs

Organizations should develop comprehensive onboarding programs that help new graduates acclimate to the company culture and expectations. Effective onboarding can significantly improve retention rates and accelerate the time it takes for new hires to become productive members of the team. By providing structured training and support during the initial transition period, companies can set graduates up for long-term success.

The landscape of graduate employability in India is evolving rapidly, driven by technological advancements and changing workforce dynamics. The insights shared during the webinar highlight the urgent need for both graduates and employers to adapt to these changes. By prioritizing the development of both technical and soft skills, fostering collaboration between industry and academia, and embracing a culture of continuous learning, we can empower the next generation of graduates to thrive in an increasingly complex job market.

The future of work in India is bright, but it requires a collaborative effort from all stakeholders to ensure that graduates are equipped to navigate the challenges ahead. By working together, we can create a workforce that is skilled, adaptable, innovative, and ready to meet the demands of tomorrow.