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Why recruitments at IIMs are chugging slowly this season

(Photo Courtesy: The Cleveland Kid)

After the placement season last year, the Indian Institutes of Management (IIMs) would have hoped that things would get better this year. However, things only seem to be moving in reverse gear as the IIMs are having a tough time placing the students of the 2011-13 batch. Apart from the economic downturn, large batch sizes, emergence of new IIMs, conservative hiring by PSUs and lack of value addition from the two-year course are cited as some of the dampeners this year.

Fathom this, in many of the IIMs, the unplaced number hovers around 5-10% of the batch. IIM Shillong for instance has yet to place around 10% of the batch. Merlvin Mukhim, PRO, IIM Shillong, expects the process to get over by March end. The process ended around March first week last year. When asked about the sluggish hiring this year, he said, “Maybe the sudden trend is due to the emergence of the new IIMs which has resulted in higher numbers to be placed across IIMs.”

For IIM Calcutta, it’s the batch size which is seen as one of the factors hitting the placements. The institute which saw an increase in batch size from 350 students last year to 462 this year, has been struggling to come to terms with the increase in number. Ashok Banerjee, dean, new initiatives and external relations, said, “We have the largest batch size among all IIMs and have placed more than 400 people till now. The issue is that the demand has gone down. It is just a teething problem and the trend should improve this year.” The placement team from IIM Lucknow also attributed the delay in placements to the same factor. Their batch strength increased by 50 this year to stand at 430 students.

IIM Kozhikode finds itself in the same situation. When asked about the 40-odd students among the batch of 325 who are yet to be placed, the institute declined to comment on the number but said that the number of unplaced candidates has come down from that figure. Last year, the placement process had been completed by February end but this year the process has been delayed. When asked about this, Sagar Tule, a placement committee member said, “After the recession, the companies hired in good numbers. The view that we are getting from the recruiters is that they are overstaffed and hence the hiring is not robust.”

But, IIM Ahmedabad and IIM Bangalore have brushed aside claims of a rough season. When questioned on the fact, Sankarshan Basu, chairperson, career development services, IIM Bangalore said, “Some students getting placed late is a common occurrence every year. There is nothing to worry about.” S Balasubramanian, placement committee member, IIM Ahmedabad, also stressed on the fact that the institute had achieved 100 per cent placements and did not face a delay in placements.

Most IIMs, with the notable exception of IIM Shillong, have not been forthcoming with the details of the number of students unplaced. IIMs could as well learn a lesson or two from their western counterparts, who are often not loath to share such information.

What’s making matters worse for newer IIMs

Three of the new IIMs- IIM Trichy, Udaipur and Kashipur will place their first batch this year. Although not willing to divulge the number of students who are yet to be placed, the sluggish market conditions have only compounded the problems for these newer IIMs, according to the representatives of these institutes. “It is unfortunate that we are faced with the challenge of establishing ourselves in placements in the midst of an economic downturn,” admitted Dr Godwin Tennyson, chairperson, placements, IIM Trichy.

In IIM Kashipurs case, though the companies recognise the brand IIM, the location and travel time have also acted as a deterrent. “Even in a bad financial year, placements happen for those institutes who have managed to build a healthy relationship with companies over a number of years (like the older IIMs),” quipped Dr Gautam Sinha, director, IIM Kashipur. The view is echoed by Joel Xavier, manager, placements, IIM Udaipur, “Lack of long-term relations with recruiters was definitely a factor that led to delayed placements,” he said.

Mr Joel Xavier further added, “Although the number of participating companies has gone up, number of offers per company has gone down. Institutes have had to reach out to more companies which has led to more time to finish the placement process.” This was seconded by P Rameshan, director, IIM Rohtak, who added that since the top recruiters fell out, the institutes had to contact smaller companies who quoted salary packages that were lesser than the institutes lowest salary figure quoted last year.

An interesting point which has come forth is that Public Sector Undertakings (PSUs) have reduced hiring this year and this has impacted the placements. Sagar from IIM Kozhikode told PaGaLGuY that the PSUs have reduced their intake, a point which was corroborated by IIM Calcutta as well. P Rameshan added, “Hiring by the public sector companies seems to have taken a hit. Around 15% of our batch last year (50 students) was hired by public sector companies. This has gone down to almost 5%of our batch this year (120 students).” Our conversations with these institutes suggest that this has got to with the Madras High Court order restraining PSUs from hiring through campus placements in February last year after a Public Interest Litigation. Even though a stay was granted, PSUs have decided to be conservative in recruitments.

Recruiter point of view

SK Dutt, president and head, Group HR, ABG Group, said, “The industry sentiments have gone down owing to a policy paralysis in the government. There are no policies for investments to come in. International economy is also not performing well. All of this has a consequential effect on the job market. Some companies are also not doing too well. So, the companies are watchful of further diversification. If the market is good, companies will take risks. But in times such as these, manpower planning becomes more stringent. Companies are trying to achieve more with less.”

Another sector which has taken the hit is IT. “The campus hiring is slow due to recession in global economy. The organisations are being cautious, either they are not going to campuses or their campus hiring numbers are drastically reduced. All sectors are sluggish, however the larger impact is on IT,” said Deepali Singh, business head, Firstnaukri.com.

However, MJ Xavier, director, IIM Ranchi has a different take on this. He does not see the trend of sluggish placements reversing in the coming years. He said, “The two-year MBA is losing its value and I do not see the trend reversing. The middle-level MBA is getting squeezed out. B-schools need to think out of the box to stay relevant,” he concluded.

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