(Photo: Anand Grover)
Invitation letters are still being sent out to prospective employers and interview rooms are being readied in anticipation of the placement season coming up ahead. But there is an unnerving question being asked in hushed circles will placements be rosy and offers handsome? There is a fear that the damp Europe and US markets will have an adverse effect on placements in Indian b-schools. Media reports published only a couple of days ago, containing quotes of senior people from a few Indian Institutes of Management (IIM) that the job market will not exactly be sun-drenched, has added to the uneasiness.
Not all b-schools agree. They say it is too early to predict how the market will shape up. Mr VK Menon, Senior Director, Career Advancement and Admissions, Indian School of Business (ISB) — Hyderabad says that one cannot generalise a trend for Indian b-schools using what is happening elsewhere in the world. Yes, we all know that world markets are not faring well and both US and Europe are worried but to think that it will translate to a bad job market in India is not rational thinking. Recruiting does not entirely depend on how the economies fare.
Mr Menon explains that at the most, the ‘type’ of hiring may change a bit, if the upshot is actually felt. Top recruitment will continue. Even during bad times, companies recruit but only people and also retain good people. Nobody stops recruiting good talent even in the bad times.
Other schools also deny having indications that the market had slowed down already. Even an industry like IT, which has got a direct growth correlation with the global boom/recession cycle, is hiring heavily this year, if the campus tech hiring of 2011 is taken as a pointer, reasons Easwar Krishna Iyer, Director Admissions, PGWPM and Associated Professor Marketing at Great Lakes Institute of Management, Chennai. He adds that in fact public sector banks, hospitality and healthcare companies are moving into the MBA hiring space.
A spokesperson concerned with placements at the Indian Institute of Management, Ahmedabad (IIM-A) agrees and states that the new focus is on the manufacturing industry. Whether recession or not, we have always believed that manufacturing is where the growth really is, says the official.
That new sectors are taking over placements is felt even by Dr N Thamaraiselvan, Associated Professor and Head of the Department of Management Studies, National Institute of Technology, Trichy. There is a trend towards government sectors. Students who were earlier choosy about private sector are considering public sector companies an option. And b-schools must focus on industries and niche sectors in their offering. For instance at NIT, we have been concentrating on niche sectors such as Analytics and Business Analysis.
On whether b-schools need to fear a forthcoming clammy scenario, Dr Thamaraiselvan said that it was no secret that there was a recession-like situation in the European countries. At the same time we have to agree that Indian companies have matured to handle these situations strategically. The growth is shifting towards the Asian countries with FDI increasing in these countries.
That India will stand good if bad days come is corroborated by Mr Easwar as well. Growth of emerging-market GDPs, diversification of Indian MNC operations to several global pockets and resilience of India Inc in the face of a continuing US slowdown should all hold us in good stead when the hiring months arrive, he says.
One factor that could camouflage Indian b-schools from rough weather is that the placements process allows them to foster close relationships with companies, which only gets stronger over the years, unless there are extraordinary circumstances. This ensures that companies at least hop over to the campus for a pre-placement talk, hiring being an independent issue. The IIM-A spokesperson agrees and states that there is no dip in the number of companies coming over for pre-placement talks. Companies come over also because we have built a relationship with them over the years. Whether there will be a decline in offers, only the coming weeks will tell.
Mr Menon agrees that companies in India form a bond with b-schools and that is a huge part of the nature of placements. If the German economy is bad, it does not mean that the German companies will not go to the German campuses. They will continue to go because they have been going in for many years though they may recruit only great talent.
Prof Kanwal Kapil, Associate Professor & Chairperson, Placement Affairs at Management Development Institute (MDI), Gurgaon holds an analogous opinion and says that recruiters have been coming in numbers to the campus because of the relations maintained with them over the years and there is no change in the number coming in this year.
One point that many b-schools seem to agree with is that a downturn, if at all, may result in moderation of packages. Informs Mr Easwar Iyer, A recent NASSCOM summit that I attended lamented that the 1:5 labour arbitrage advantage that we enjoyed a decade back has got shrunk to less than 1:3. Given such a scenario, there could be a salary-level bunching and one bunch that we foresee is the Rs 10 lakhs to Rs 12 lakhs CTC bunch. This could actually create a winners some losers some sort of situation.
It would be interesting to see how the likes of IIM Trichy will perform considering that it is hunting its first set of employers this year. Work has started on placements and there are no back trends to benchmark performance against. Dr Godwin Tennyson, Assistant Professor, Chairperson, Placements and External Relations of IIM Trichy says that it is too early to predict the trend. Work is on to get companies and the response seems favourable. We will know exactly in a week if the world situation is going to have any effect.
Schools abroad are more straightforward about the state of affairs. Sophie de Lorenzo, director, Careers & Corporate Relations at the International University of Monaco, says that while the semester has been good in terms of recruitment, the compensation packages offered are lower than before 2008.
Ms Lorenzo adds that the season has been marked with significant shifts in recruitment needs and a widening divide between the East and the West in terms of employment opportunities. Many banks are planning job cuts. HSBC is expecting to cut 30,000 jobs by the end of 2013, Barclays is preparing to lose 3,000 roles. But in the finance area, the horizon seems to lighten up further going East and the same banks plan to hire more people in Asia, particularly in Singapore where IT finance specialists are in demand, or Hong Kong. The hiring forecasts also remain good in the luxury businesses in Asia.
Speaking generally for Europe, Ms Lorenzo says that the year 2012 will probably be as bad as the year 2009 so all the business schools should expect bad placements. For young students, the alternative will again be to accept longer internships with lower pay and no job guarantees at the end. US hiring forecasts are quite pessimistic as well, but Asia seems less affected.
Rebecca Joffrey, Director, Career Education, Career Development Office, Tuck School of Business at Dartmouth says that MBA students in the US are certainly not immune to economic ups and downs. “We are in the process of creating a new Career Volunteers Program wherein key alumni will be appointed to serve as Company, Industry and Geography Captains. Our goal is to make sure that if companies are seeking to hire, then the jobs are made available to our students.”
In the midst of the uneasy situation, a media report published just yesterday had the atmosphere even more charged. PaGaLGuY spoke to both IIM-A and IIM-Bangalore to know more about it but at both places the response was that the the concerned people were travelling and it would be difficult to confirm the statements. In fact, one of the schools even told PaGaLGuY to get on to more ‘urgent’ stories since this query could not be responded to outright.
Do placements not count among ‘urgent’ subjects for b-schools?