W Power 2024

Is study abroad turning burden from boon?

The desire to pursue higher education in the US or Canada is appealing because of better professional growth and higher-paying jobs. But with the recent economic conditions, students are struggling—they are forced to either opt for unpaid internships, pay cuts or return to India

Naini Thaker
Published: Apr 10, 2024 01:41:46 PM IST
Updated: Apr 18, 2024 12:47:27 PM IST

In the last one year, things have not been looking good, especially for students graduating from the US and Canada. Modern-day job hunters take five months on an average to land a position in the US, stated a new research by recruitment agency Randstad US; Illustration: Chaitanya Dinesh SurpurIn the last one year, things have not been looking good, especially for students graduating from the US and Canada. Modern-day job hunters take five months on an average to land a position in the US, stated a new research by recruitment agency Randstad US; Illustration: Chaitanya Dinesh Surpur

After close to a year of hunting, Kartik Talreja finally managed to get a contract-based job—at a friend’s relative’s company this February. “I tried the usual job application process, but either there weren’t enough jobs or I didn’t have enough experience,” says Talreja. Did he not feel like giving up and going back to India? “It was tough,” he admits, “but I needed to find a job to build my career.” But now the 23-year-old has stopped looking for full-time jobs, given how draining the application process is.

Talreja is one of the many students who has gone through the immense struggle of finding a job in the US. But the desire to pursue their higher education overseas has always resonated with Indian students. Reason? Professional growth leading to global job opportunities, better paying jobs, and hence, living a better lifestyle.

The number of Indian students enrolled in foreign higher education institutions (HEIs) is expected to reach 20 lakh by 2025, up from the 7.7 lakh students who studied overseas in 2023, as per ICEF Monitor. In 2023, an all-time high of 268,923 Indian students moved to the US to pursue higher education, as per an Open Doors Report. For Canada, among international students, those from India constituted the largest national cohort, comprising 37 percent of the 579,075 permits issued until November 2023. This figure, however, marked a decrease from the 41 percent in 2022.

In the last one year, things have not been looking good, especially for students graduating from the US and Canada. Modern-day job hunters take five months on an average to land a position in the US, stated a new research by recruitment agency Randstad US.

Why is this? “US and Canada are in a cooling-off period as a potential global economic slowdown poses apprehension, causing companies to be more cautious about expansion or hiring new employees; notwithstanding the post-pandemic recovery, unprecedented automation, and demand for specific skills have further created a displacement in the labour market,” says Ankur Nyati, president, upGrad Study Abroad. Additionally, experienced workers who have had a delay in job searches during the pandemic might be re-entering the workforce, creating more competition for recent graduates.

There was almost a hiring frenzy, particularly in the tech sector in 2021-22. Getting jobs at big tech firms, including the likes of Google, Amazon and Meta, among others, was a lot easier. People were commanding salaries of $300,000 to $400,000 per annum; freshers were being paid $200,000 per annum. “Everyone was investing heavily in tech,” reckons Leela Yanamaddi, co-founder, scale.jobs, a platform that helps job seekers by getting human assistants to take care of the work of applying for them.

Yanamaddi started this company after he realised the struggles of finding jobs that he experienced after graduating from Carnegie Mellon University in December 2022. “Filling in hundreds of applications with the same information, day in day out, is exhausting and it takes hours,” he says. “Job seekers would rather use their time networking, instead of doing this grunt work.” That’s how he set up scale.jobs, where he interacts with students looking for jobs on a daily basis.

In the current scenario, if you fill in 100 applications, the possibility of getting an interview call is 1 percent, states Yanamaddi. This is why, he says, “networking helps, and might increase the chances of getting interviews”. Even if someone has 10 years of work experience, he adds, “The market is so bad that he will be willing to take up a job which needs five years of work experience too. And most companies aren’t willing to hire for entry-level positions.”

Up until last year, most students graduating from top tier universities got jobs. “Almost all my seniors were placed. But out of our batch of 50, only 15 people have been placed even after three months of graduating—the rest are still figuring out jobs,” says Malhotra, who moved to the US in 2019, since his partner was living there.

In such situations, to maintain their visa status immigration, students need to find a job in the US within 90 days. With not enough opportunities, many like Malhotra, have been taking up unpaid internships to stop the clock. “Many students from Tier II universities have now taken up door-to-door delivery jobs for companies like DoorDash in an attempt to earn $2,000-$3,000. Others like Tier I university graduates who aren’t willing to take up such jobs are still on the lookout for full-time jobs,” explains Yanamaddi.

One big issue with US-based positions is the H-1B visa that companies need to sponsor. While applying for jobs, there is always a question on if an H-1B sponsorship is required. “If a student puts a ‘Yes’ in that column, he or she is likely to be rejected just on that basis. We lose around 60 percent of jobs in the market just because we need sponsorship,” explains Yanamaddi. There is also a lot of scepticism, since elections are around the corner, because companies don’t know what kind of policy changes will come about.

Also read: How the weakening rupee is impacting study plans in the US

In the few jobs that are available, Malhotra says, they look for people who come from the same domain. For instance, he explains: “If there is a tech job opening like marketing automation in a real estate company, they will look for people with a background in the same sector, and with some experience in marketing automation. Till these are on your resume, it’s hard for you to get an interview.” Earlier this wasn’t the case. If someone had transferable skills, the company will open the door for interviews, and test candidates for their skills or even learn on the job.

To add to this, students have been noticing sharp cuts in pay packages and they have less scope for negotiations as well. “Amazon used to recruit at $300,000-$400,000 per annum… this year, the number is between $100,000 and $150,000,” says Malhotra. “The dream of getting a big tech job in the US is over, or very limited to a few.”

According to upGrad, there has been a notable decrease in students choosing Canada as their preferred study-abroad destination, based on responses from over 25,000 aspirants across Tier I/metros (42.8 percent) and Tier II and III cities (57.2 percent). “Canada experienced a significant decline in popularity—also in terms of studying, with only 9.3 percent of total respondents selecting it as their dream destination,” says Nyati. This is a result of many factors, including increasing cost of living, growing unfriendly policies for international students, and the Canada-India conflict.

Also read: India-Canada row: Where does this leave Indian students in Canada?

Shah interned at various companies in Canada throughout his five-year programme, from the Royal Bank of Canada to Nvidia. Despite enough work experience, he struggled. “The situation hasn’t been great since 2022-23… there weren’t any return offers for internships, number of job postings were fewer, and a lot of people were competing for the same position.”

The situation in Canada has also changed drastically. “A couple of friends moved to Canada for jobs, but with the high cost of living, and not very high salaries, savings are minuscule,” says Malhotra. In fact, he feels after graduating from a good university, it might make more sense to get a better-paying job from Delhi or Bengaluru.

For all these reasons, Shah says, “Now I’m planning to pursue my masters from the US. Post this economic downturn, I feel things will get better there, which is why I think there are far better opportunities there,” says Shah. Outside of Canada and the US, job seekers are now also looking at Dubai, Singapore and even London for opportunities.

upGrad’s report also highlighted some other popular destinations for Indian students—European Union (EU) countries (48.8 percent) are experiencing increased demand, with Germany (32.6 percent), Ireland (3.9 percent), France (3.3 percent), and other European nations (9 percent) gaining popularity in 2024, surpassing Canada. This shift indicates a change in preference among Indian students, who now view Europe as an attractive option for affordable, high-quality education and access to lucrative job markets.

Going Back to India

India, on the other hand, has been seeing a lot more job opportunities. “India’s economic momentum, bolstered by technological advancements and the government’s Viksit Bharat 2047 initiative, underscores a concerted effort to position the country as a hub for fresh opportunities and new sectors for employment,” says Kim Dixit, co-founder and CEO, The Red Pen. The New Education Policy (NEP) and the rise of online upskilling platforms are transforming India’s education landscape, attracting foreign universities and empowering the workforce to meet 21st-century job demands. “This, coupled with the allure of returning to India for overseas students, ensures a robust job market,” she adds.

The tuition fee for most programmes in Canada and the US is expensive—an average of $30,000 to $40,000, based on the course and university. “For my one-year programme—MS in product management and computer science (STEM)—the tuition fee was $70,000 and a spend of $800-1,000 per month on rent. That’s an average of $80,000 to $85,000 in over a year,” explains Malhotra.

Students come with the mindset to work for a few years after their graduation, to recover some of that investment or repay loans they might have taken. A lot of students who still haven’t managed to get a job and have taken student loans are considering going back to India.

“Factors such as rising tuition costs, visa restrictions and uncertainty in postgraduation employment prospects may prompt some students to consider staying in India for higher education or exploring job opportunities closer to home,” explains Gupta.

While the pay gap has closed a lot back in India—it still remains a significant one. Malhotra says, “The point is, does that gap matter? Back in India I was having the best time, I could go wherever I wanted to without thinking about the budget. So even though they might be on a lower pay, you can still do everything, unlike here.”

Even with the growing opportunities in India, some students still feel the US economy will eventually bounce back. In terms of work culture or working with the latest technology, they feel the US is far ahead of India. Talreja, for instance, hopes to spend the next 10 years working in the US. “If it weren’t for the current situation, it wasn’t as tough getting a job in the US… I feel I’ll get to grow a lot more by working here, so for my career, I feel this is a far better choice,” he says.

Shah, who struggled to get an internship during her summer break, wants to find a job and live in the US, at least for the next three years. She says, “I feel that for my field, an entry-level position here is better structured than in India. It will help me form a base and give a jump to my career.”

Despite the challenges in the job market, studying abroad continues to offer unique benefits. “Students pursuing degrees in specialised fields like artificial intelligence, biotechnology or renewable energy might choose to study abroad to gain access to cutting-edge research facilities and expert faculty,” says Gupta. In fact, upGrad’s report stated that the US saw a positive uptick of 8.8 percent as 27.6 percent of respondents chose it compared to 18.8 percent from the last survey.

While the overall job market might be tough for recent graduates, tech—particularly artificial intelligence, digital and health care—are sectors experiencing continued hiring activity in the US and Canada. Traditional entry-level roles might be scarce in certain industries, but in these emerging fields, there is still scope.

“In health care, recent graduates with degrees in nursing, health care administration or public health may find job opportunities in hospitals, clinics or government agencies, especially with the ongoing focus on health care infrastructure and pandemic response,” says Karan Gupta, education consultant.

Technology companies, particularly those specialising in cloud computing, cybersecurity and remote collaboration tools, are expanding their workforce to meet the increased demand for digital services. Adds Gupta, “Ecommerce and logistics companies are also hiring to support the surge in online shopping and delivery services.”

Tech-led entrepreneurship has birthed several new avenues of employment—giving rise to the gig economy or huge opportunities in data-related career fields… the landscape continues to evolve. Says Nyati, “In terms of building future tech talent and skilled health care workforce, both the US and Canadian governments recognise the importance of these sectors and already endorse STEM (science, technology, engineering and math) education and streamline post-study work tenure and immigration processes for workers in STEM-designated disciplines.”

While things aren’t looking too great just yet, Indian students are still holding on to their American dreams.

(This story appears in the 19 April, 2024 issue of Forbes India. To visit our Archives, click here.)