Importance of Placement in Admission Season

We are in the middle of admission season. Everyone wants to know which college to go to, which branch to take, and such other questions. How should one decide these things. The initial temptation of people like me is to suggest to look inside for passion and interest. And study whatever discipline interests you.

However, one finds, particularly in the IIT JEE context that students in top 100 ranks always have deep interest in CS. Their first toys were always a laptop. The next couple of hundred guys are always confused between CS and EE, the two disciplines they seem to enjoy the most (what did they do to enjoy these disciplines - did they try wiring their homes or what), the next couple of hundreds are sure that Electrical is what they want to do in life, but they would not forget to ask how easy it would be to get a branch change to CS after the first year. You get the drift.

What is behind all this. What is the most important factor to decide the discipline and the institute. It is always "scope." Do not be fooled in believing that the word means what kind of skills one would learn in the program, what kind of careers one could have and so on. It means only one thing - how much money would my son make when he graduates. You see the question is mostly asked by parents. In India, passing 12th class does not make you eligible to take your own decisions on higher education. And respecting the elders is part of our culture.

What is wrong if one wants to know if the investment one is about to make will give adequate returns. Those professors who still believe that one should study for the sake of learning are living in the previous century (and it is not that most people did not worry about jobs then). Return on investment must be an important parameter in the decision making. However,  the problem is when it is stretched a bit too far, and becomes the only parameter, and that too without much thought going into it.

So, everyone wants to know the placement information about the program. Why? Because that will help you compute the return on investment. It is believed that the placement data of 2014 will tell you what your son should expect as his first salary in July, 2018. Really! You don't need to understand your son's interests, personality, skillset. May be 2014 graduates with matching interests, personality and skillsets made more money in a different discipline. But obviously that information is too difficult to get and hence no point in even thinking about it. May be the industry will change in 4 years and different skillsets will be in demand. Once again, this information is difficult to get and hence no point in thinking about it.

Do you even know and understand 2014 data. Do institutes and universities give you complete data that you can look at. Sorry, they don't give you adequate data, only that part which indicates a rosy picture. One institute says they had 400 companies come to campus, while the other had 200. Is the first one necessarily better. What if these 400 companies gave only 1000 job offers, while the other 200 companies gave 1200 job offers. I saw a recent news item when one institute claimed highest number of job offers. Needless to say that it hid the fact that the number of students were also highest in that category of institutes, and the percentage of students getting jobs was less than other similar institutes. Do you know when most institutes say that 90% students got placed, this is a fraction of students who "registered" for placement and had more than 60% marks. What happens to those who have 59% marks, and may be they did not register some students who would not have got jobs anyway. There is very little verifiable information available in public domain, which is so small that comparing such information and guessing the future rate of return is totally irrational.

But more importantly, should you really be interested in salary of July, 2018, or salary of July, 2058. Note that the salary in July, 2058 is likely to be two orders of magnitude higher than the salary in July, 2018, even in constant rupees. Looking back at that time, the first month salary will not even look like peanuts. So the return on investment (unless one has taken loan, and there is a serious cash flow problem at home) should take into account the salary of July, 2058 and not July, 2018. And is there any study that looks at correlation of income across 40 years. Is there any industry which will continue to be at the top in terms of paying high salary for 40 years. Could anyone 40 years ago predict what types of jobs would be highest paying jobs in 2014. Sorry to disappoint people, but the answer to all these questions is in negative.

So figuring out which discipline would result in the highest rate of return on your investment is an impossible task.

Should we completely give up on this criteria? Of course, not. Four years of time and a substantial expense is too much of an investment to be made for the love of learning. One does need to worry about whether adequate return will be there for this investment.

But the key here is "adequate" return and not "maximum" return of all possible options. The utter confusion that you see amongst parents is because they are trying to maximize return and not be satisfied with adequate returns, and as we have said above, it is next to impossible to ascertain what will give maximum return over the next 50 years.

Let us look at it another way. Would the return be considered adequate if you were to become richer than 99% Indians within 5 years of your graduation. I would guess that is pretty good return on your investment. But if you were to argue that a CS degree is likely to make you richer than 99.2% Indians, while a Chemistry degree will only make you richer than 99.1% Indians, and hence I will choose CS over Chemistry, then that is the beginning of confusion. Then someone will suggest that may be a CS degree from IIT-X will make you richer than 99.21% Indians, while a CS degree from IIT-Y will only make you richer than 99.19% Indians. And now the confusion is really big time. Inside your heart you know that the basic data for 2014 is not available, that projections over the next 50 years (even 5 years) is impossible, that the exact career will depend on the individual capabilities and skillsets, and hence it is very difficult to guess which program will make you richer than 99.21% Indians and which program will make you richer than 99.20% Indians. And yet, you want that differentiation, you want the best for your son, and the best only means one thing for you - richer than most other people.

Anytime you consider richer than others as a criteria, you and your son will never be happy. If you are not happy being richer than 99.19% Indians, you would not suddenly become happy if you are richer than 99.20% Indians. On the other hand, if you had chosen "adequate" return as the criteria, you would immediately realize that a large number of programs in most government funded colleges would meet that criteria, and hence one could talk about other dimensions like how much fun would one have learning.

Also, when one looks at "adequate" return as the criteria, one is admitting that the Institute/Program will do only so much, and the career depends a lot on the individual. So one would actually work hard and do better in life. On the other hand, when one looks at "maximum" return as the criteria, then one is assuming that it somehow depends primarily on the Institute/program, and the individual has very little to do. It makes the individual less enterprising and indeed the returns will be lower in such a scenario. Thus the proponents of "maximum" return actually don't get maximum returns. So in their own interest, they should switch to the model of "adequate" returns.


Notes:
 

(Note that I have used "he" above since parents do seem to consider other criteria for their daughters like "closeness to homes and return on investment is a lesser criteria.)


I had written a very similar blog in 2011. That is linked here.
I had also written a blog on how to choose your IIT/Branch in 2011. That is linked here. It is pretty outdated in terms of specific data though the algorithm perhaps remains the same today.

I used to write the counseling article/blog every year, but haven't done so since 2011, since I have assumed the role of Dean of Academic Affairs at IITK in December 2011. It is politically difficult for me to say that any other IIT is doing things better than IITK in any aspect, and if I were to argue in favor of IITK, it will be discounted by my readers because I will be expected to say that. Even my postings on facebook saying that IIT Gandhinagar (which I have visited more than 25-30 times) is doing very well are sometimes considered politically incorrect. So may be I will be back in 2015 after I am a free bird.