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| Shyamal Majumdar: The B-school divide | | Uncertainty about the India story keeps recruiters away from the top schools, but the smaller ones look forward to a busy placement season |
| Shyamal Majumdar / Mumbai Jan 06, 2012, 00:42 IST |
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As the slowdown clouds get darker in the new year, there is an interesting divide among the country’s business schools. Even as the mood is gloomy in the top schools (Indian Institutes of Management, International Business School and so on) that are set to start with their placement season, the not-so-marquee names are having a reasonably good run.
Reason: most of the usual names offering the real top-dollar jobs – consulting firms, global commercial and investment banks – will be missing from the campuses of leading B-schools this time. The absence of these companies could have a serious impact because finance and consulting have been the top draws among B-school students. For example, 29 per cent of IIM-Ahmedabad students this year took up summer internships with financial services companies. The corresponding number for consulting companies was 22 per cent.
The same thing happened during the 2008 slowdown, but the difference this time is that even those Indian companies that recruited a lot from these schools in 2009 are reluctant to visit campuses. They haven’t dropped out, but will make fewer offers since they are now unsure of the domestic consumption story.
The CEO of a large enterprise says the problem magnifies when word spreads that the big boys are not coming. “Bonafide recruiters also start thinking, should I go to the campuses? If I go, should I offer what I was offering last year?” he says.
People involved in the placement process also say many students at these schools who saw MBA admissions as the ticket to good jobs have started questioning the return on investment, perhaps for the first time in several decades.
What makes matters worse is that the public sector banks and corporations that recruited heavily from IIMs after the 2008 slowdown are reluctant this time since most of the candidates jumped ship as soon as the job market improved. Though the public sector undertakings (PSUs) are still recruiting MBAs in large numbers, the intake is mostly from second-rung schools. So, it’s more or less certain that top B-schools are headed for a long and tedious placement season this year with fewer offers coming their way.
The scene is, however, dramatically different in the second-rung schools (mostly those outside the top-20) that haven’t yet seen any decline in the number of offers coming their way. This is unusual considering that during the 2008 slowdown, career placement officers in many of these schools had seen the hiring season continue long after graduation, extending into the summer and beyond.
The reason is that there are enough companies that have jobs on offer at relatively lower levels but at a much more reasonable cost. The slowdown, thankfully, hasn’t impacted this segment of the job market. For example, almost all technology companies are sticking to recruitment targets drawn up at the beginning of the financial year. In fact, they will recruit over 250,000 engineering graduates (the number was 200,000 last year) from across the country’s lesser-known campuses this year. There are huge employment opportunities also in sectors like retail, health care, defence, hospitality and consumer durables.
That the job market is still bullish for students of the second-rung institutes is also reflected in a recent survey done by HR firm Manpower. Indian employers, the survey says, are the most bullish worldwide when it comes to hiring, with robust recruitment plans. With a net employment outlook – an indicator of hiring intentions – of 41-plus per cent, Indian employers are bullish about their recruitment plans for the first three months of 2012. According to the report, the services sector (49-plus per cent) and the mining and construction sector (47-plus per cent) present the brightest hiring opportunities for job seekers in the next three months. In fact, India and Japan were the only Asian economies (Chinese employers are the least optimistic) in which hiring prospects are expected to improve.
In a separate monthly report, job portal Naukri.com said hiring activities have surged across all sectors. The monthly Naukri Job Speak index – an indicator of online job demand – showed that hiring moved up across all sectors. Others say India, to a large extent, is insulated from the job scarcity in the developed world.
The employment generation in the country as a whole also continues to rise despite the economic slowdown. A Labour Bureau study on the effect of economic slowdown on employment between July and September, 2011, showed that overall employment in the country increased quite a bit during this quarter. All sectors, except leather and transport, saw an increase in employment.
Though all this is good news, what is perhaps not is that salary increases will be muted. In these uncertain times, almost all companies are refusing to increase average salary offers from last year’s levels. The other change, of course, is the rise in the variable component of the salary package, the underlying principle being you get a part of what you earn for the company.
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