**_Respondents_** : Half of the respondents are a head/manager of a human resource department. About 18% are a manager of engineering graduates‘ department.  Approximately 15% are a business owner or partner.  The large share of head/manager of human resource department could have been a potential problem if the survey evaluated individual skill sets.  However, the survey rated a group of new hires across the company.  Therefore, the human resources department would be best placed to assess skills of newly hired engineers as a group.

Consequently, the sample covered a wide range of employers across sectors, regions, size of companies, etc. This suggests that the results are relatively representative. However, the sample may not fully represent the true population, i.e., the total number of the employers that hire engineering graduates in India. Since we do not have detailed enterprise level data on who hires engineers, we cannot compare our sample with the true population.

# **5. Findings**

This section presents the major findings. First the section presents the results of a factor analysis of the 25 skills rated by the employers.<sup>6</sup> Based on the skill groups, detail analysis is further conducted to respond to the three research questions raised in the introduction: (i) How satisfied are employers with the skills of engineering graduates? (ii) Which skills do employers consider important when hiring new engineering graduates? and (iii) In which important skills are the engineers falling short?

# **5.1 Grouping Skills**

We conduct a factor analysis of the 25 individual skills to group the individual skills into a small number of skill groups (factors).

We group the skills because it is plausible that a common latent factor (skill/ability) partially drives the importance and satisfaction ratings of a group of individual abilities. For instance, employers and HR-staff often talk about the importance of ―soft skills‖. There is hence a notion that a set of interpersonal skills are related into one group and that this group of skills is important. However, ―soft skills‖ are often neither well defined nor backed-up by empirical evidence that the individual skills referred to as soft skills form one group. Factor analysis is one of the ways to test this notion of soft skills and empirically define the individual skills that make up ―soft skills‖. Further, the identification of a small number of factors allow us to identify commonalities in demand and supply for skills, and structures the findings and provides a limit set of overall findings.

Factor analysis fits exactly the above goal of reducing the number of variables into overall groups. It is a statistical procedure to find the latent variables that explain attributes of common variables in the observed variables. Factor analysis is widely used in social science, especially in psychological researches and business surveys. Psychologists, for instance, conduct empirical researches on the relationship between personality traits and job performance. They examine numerous personal traits and categorize them into five

> 6 A skill, ― _Accepts responsibility for consequences of actions_ ‖ is dropped from the analysis since the skill is quite similar to ― _Reliability_ ‖

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