[the_mask]

The global credit crunch, high oil prices and rising inflation rates may impact campus placements at Indian B-schools for the coming year, say faculty members in-charge of placements across a wide section of business schools. PaGaLGuY.com investigates what lies in store for India’s business schools for the placement season of 2008-09.

“Global financial markets continue to be fragile and indicators of systemic risk remain elevated” reported the Global Financial Stability Report of the International Monetary Fund (IMF) on July 28, 2008. Inflation in India is at a 13-year high, driven by the soaring cost of food and fuel.

“The situation is serious even at the Indian Institutes of Management (IIMs). At some, PPOs (pre-placement offers in for the batches of 2008 ) have been revoked. The overall scenario can be considered to be dim,” comments a prominent official from IIM Calcutta who did not wish to be named. Other IIMs were not willing to confirm this fact. The faculty in charge of placements at IIM Indore observes, “Companies and lower tier B-schools are bargaining over students as if they’re vegetables!

”For the batches graduating in 2009, the IIMs expect a 20-25 percent increase in pre-placement offers. However, even the pre-placement offers will not help remove doubts about how final placements will be. “One needs to understand that for a company participating in final placements, the cost of recruitment per student is over Rs one lakh. This would mean that more companies would participate in summer placements, some may opt out of final placements and participate in summer placements and give out a higher number of pre-placements offers than normal,” explains Professor Prashant Salwan, Chairman-Placements at IIM Indore.

“Even at the top IIMs and other quality colleges such as MDI Gurgaon, companies may opt out of placements or recruit fewer students than usual. At these institutes the pool of companies will remain similar with one or two companies opting out. The lower ranked colleges will be severely affected,” comments Professor Subir Verma, Chairman (PGP) at Management Development Institute (MDI), Gurgaon.

Professor CS Venkata Ratnam, Director International Management Institute (IMI) Delhi, says, “Some banks have delayed the joining dates for MBA graduates. Usually students join in the months of July or August but this year it hasn’t been so. Banks are waiting for the situation to improve.” Earlier this year, ICICI Bank (India’s largest private bank) had said that it would not announce any annual promotions and large bonuses this year. The bank had explained that the move was aimed at reducing costs in a less optimistic economic environment.

The media had also reported that Oracle and IBM have had to engage in cost-cutting exercises such as lower salary hikes and removal of employees’ fringe benefits respectively. “I do know of students who were placed in the software sector and have been asked to join later in the year than what is usually the case,” adds Professor Salwan of IIM Indore. He goes on to say, “Many new companies will be coming on B-school campuses. Cost-cutting will cause more outsourcing and hence consultants will be well off.

Further, a lot of students, particularly engineers, who had opted for finance are now shifting to operations. Reason being that going by current trends, corporate finance will be the important sector in finance. Work in this sector requires much more training and a thorough knowledge of finance (thereby implying that engineers will not have it easy to shift to finance and would have to look at alternatives such as operations). Of course the importance of corporate finance is subject to the involvement of Foreign Institutional Investors and may change in the next few months.”

“In the last 15-20 years, the focus has been more on IT. It is high time we started looking beyond this technology. We need to look at promoting innovations and ownership of intellectual properties,” Infosys Technologies CEO and MD K Gopalakrishnan had commented at a press conference held earlier this month.

“Companies and sectors go through a cycle. The situation in the IT sector will result in old sectors such as manufacturing, civil and cement coming to the fore. The playing field will be level now that the salary offered by IT firms will no longer be a huge attraction. Students will now be required to be prove themselves at the time of placements, have a clear vision as regards their career and not simply jump into companies without thinking!” explains Mr CS Somu, Chairman – Admissions at SDM-IMD, Mysore.

[anandv]

Nice info

Inspite of all the gloom, I am more than sure that the average salary across B-schools will rise in placement reports

[anupamjain008]

Originally Posted by anandv

Nice info

Inspite of all the gloom, I am more than sure that the average salary across B-schools will rise in placement reports

Not sure,
I was talking to a friend working in Deloitte the other day, and he simply said that there is going to be a far less recruitment this year.
According to him, the MD of Deloitte India in a meeting simply stated that "We don't need to worry about recruitments this year. So one less headache!"
And this is just one of the disparate reports and rumors I have come across in the past few months. The CRPMG III is out on first week of August and they have categorised the credit crisis as "One of the financial shocks after Russia, LTCM".
This means a lot, esp. for poor souls like us who are passing out this year with an MBA in Finance!!

Don't know and can't comment.. seems like even B-school placements are in an unprecedented crunch. Those with the best risk management practices should sail through, though.

[diablorulez]

Originally Posted by anandv

Nice info

Inspite of all the gloom, I am more than sure that the average salary across B-schools will rise in placement reports

I guess u were talking about REPORTS rather than real placements

[picaroon]

“In the last 15-20 years, the focus has been more on IT. It is high time we started looking beyond this technology........

Just to bring in : Even new offers/job switch has become difficult as there is very less recruitment of both freshers/experienced of in IT/BPO/KPO jobs also.

[rmbt]

Originally Posted by diablorulez

I guess u were talking about REPORTS rather than real placements

Yes, placement reports are similar to Indian batting line up on paper.

-Looks good, loads of potential, good brand names
(But we all know how Indian batting lives up to expectation and similar is the actual placement).

Jokes apart, well companies wont be going to new campuses this year, i.e. if they go to college X and Y, they still not go to Z and also, will cut down on the number of offers in X & Y.

Also, the rise in the salary has taken a big hit, with appraisals being in single digit this year and the base salary offered in B-schools will remain the same as it was last year (especially in IT sector).


DISCLAIMER: These are speculations and might change if the overall Economy improves.

[chekidu]

Nice article indeed....

One more article from Yesterdays ET

It’s raining offers at B-schools Global, Indian Cos Rush To Make Pre-Placement Offers Much Before End Of Session Sreeradha D Basu, Shreya Biswas & Kumar Anand KOLKATA/NEW DELHI/AHMEDABAD



PRE-PLACEMENT offers (PPOs) could well be the flavour of the season at B-school campuses this year. With the markets slowing down and companies’ increasing eagerness to get on board freshers who have already proved their mettle, it’s pouring PPOs in premiere B-schools across the country. To ensure that they get the best and the brightest, companies are not waiting for end of the session to pick B-school grads but handing out offers immediately after the summers.

Sample this: It’s only August and Indian Institute of Management-Calcutta (IIM-C) has already bagged around 40 pre-placement offers (19 international one) so far. Not only that, it expects to beat last year’s tally of 90 PPOs by over 20%. At IIMKozhikode (IIM-K), companies have shown up with a total of 24 offers so far, which is a third of the total PPOs offered to the students last year while IIM-Lucknow (IIM-L) has got over 10 PPOs with many more to come. Same is the case with the Delhi University’s Faculty of Management Studies (FMS) and XLRI Jamshedpur. Two months into the session, FMS has already received 10 PPOs.

IIM-Bangalore (IIM-B) too, which had 103 PPOs last year, has bagged quite a few offers this year. The increased inclination of companies towards PPOs can be gauged from the fact that PepsiCo India, which plans to hire 20 management trainees this year, expects to get around 15 of them through this route.

It’s a growing trend with companies opting for the B-school students who spent their summer with them at the workplace. Freshers who would have had the chance to work with companies are in a better position to showcase their skills.

Ditto for students: They get a feel of the profile and the organisation’s culture. PepsiCo, which started a B-plan contest last year, offered PPOs to the finalists. This year too it plans to get around 75% of its management trainees through this platform. PepsiCo India HR executive director Pavan Bhatia says, “It works very well. You get additional datapoints about the prospective hires through this, hence its a preferred platform.”

B-schools too echo a similar sentiment. At IIM-C, companies that have offered PPOs so far include McKinsey & Co, Bain Consulting, BCG, Merrill Lynch, Morgan Stanley, Lehman Brothers, Barclays Bank, Macquaire Bank, Credit Suisse, HSBC Group, HUL, TAS and the Aditya Birla Group. Of all the Indian Bschools, McKinsey has offered the maximum number of PPOs at IIM-C.

On the other hand, at the IIM-K, companies like HUL, Marico, Coke and CitiBank, among others, have shown up with a total 24 offers.

“Of the eight students who did their summers at McKinsey, seven have been offered PPOs,” says IIM-C marketing professor and chairman (career development and placement) Prafulla Agnihotri. “For the last few years, there has been a growing trend of companies preferring to give PPOs. “It makes sense to make offers to people who have worked with the company and understood its culture rather than someone who is unaware of it,” adds Prof Agnihotri.

Interestingly, according to Prof Agnihotri, in another three years or so, the institute is aiming at a situation where the entire batch gets PPOs. In line with the increase in the number of PPOs, salaries are also expected to go up by at least 15% over last year, he said.

At yet another B-school XLRI, Jamshedpur, the number of PPOs has been going up. Companies are putting in a lot of effort in selection even during summer placements with the primary objective of finding good students. PPOs too are growing accordingly. So are pre-placement interviews, for which students are called directly for the final shortlist.

“These too often culminate in PPOs, though these are converted a little later. The PPOs are being offered by companies across all sectors,” says XLRI, Jamshedpur dean Prof Venugopal. Last year, XLRI students bagged 65 PPOs. For the B-school crowd, to get placed just after the summers and much before the finals is all that they could have asked for.

SEASON’S OFFER

IIM-C has already seen 40 pre-placement offers (including 19 international ones) this year. It expects to beat last year’s tally of 90 PPOs by over 20%

At IIM-Kozhikode, companies have shown up with a total of 24 offers so far

PepsiCo is planning to hire 15 management trainees through PPO route this year

Companies that have offered PPOs at IIM-C include McKinsey, Bain, BCG, Merrill Lynch, Morgan Stanley, Lehman Brothers, Barclays Bank, Macquaire Bank, Credit Suisse & HSBC, TAS and Aditya Birla Group

IIM-C aims for a situation where the entire batch gets PPOs in another three years