B-schools grads struggle to find placements

According to an Assocham survey, only 18% of students have got employment offers

Economic slowdown, stalling of new projects and investors’ apathy towards several key sectors like infrastructure, hotels, financial services, realty and retail have led to the drying up of job opportunities for a large numbers of students from the B-category business schools which are struggling to find placements for their students. So far with only 18 per cent of students are landing employment offers, a latest survey by industry body Assocham said.

There has not been any response from the manufacturing sector, but the services sectors such as financial, IT & ITES are offering some jobs.

The Associated Chambers of Commerce and Industry of India (Assocham) in a recent paper “Appetite  for MBA Tumbles Down” revealed that grim placement scenario is reflected in B-school campus hiring which has gone down severely and only 18 per cent of students got placement this year. The salary packages offered at B-schools and engineering colleges are also being curtailed by 40-45 per cent compared to last year.

While releasing the Assocham paper, D S Rawat, Secretary General, said: “Many parents and students are re-thinking on investing 2-3 years and several lakhs of rupees on a course, with the demand and placement of MBA graduates not as good as before due to slowdown. Around 450 institutions have become defunct as they are not getting enough students to be viable.”

Rawat said, a large number of the B-schools and engineering colleges are not able to attract students.Over  220 B-schools have already closed down in 2013 in the major cities of Delhi-NCR, Mumbai, Bangalore, Ahmedabad, Kolkata, Lucknow, Dehradun among others. Another 95 are struggling for survival, reveals the report.

Despite an increase in number of B-schools across the country, the common test for admission (CAT) to elite B-schools of the country, saw a decline of 9.5 per cent in 2014 from 8.5 per cent in 2013, adds the paper.

While the total number of applicants stood at 185,000 in 2014, compared with 194,000 in 2013,  the MBA seats in India grew almost four-fold from 95,000 in 2006-07 to 468,000 in 2013, resulting in a compounded annual growth rate (CAGR) of 30-35 per cent and over-capacity.  Unfortunately, job opportunities for MBAs have not grown in the same proportion, it said.

“The biggest reason for the gap is the mushrooming of Tier-2 and Tier-3 management education institutes that have unfortunately not been matched by commensurate uplift in the quality of management education. Most of the students prefer to choose cheaper AICTE approved programs rather than B-schools,” said Rawat.

The demand has begun to deflate now as the quality of education provided by B-schools has come under scanner. The B-schools should not be considered as placement agencies, the main purpose of B-school is to provide quality education.

Rawat said, the root cause of the problem is that institutes only focus on filling up seats and do not consider the quality of students at the time of intake. Consequently, students think that the entire responsibility lies with the institute.

On the other hand, the institutes will have to improve the infrastructure, train the faculty, work on industry linkages and spend money on research and knowledge and focus more on making students employable rather than employed.

Rawat also commented that the global uncertainty has certainly affected the placement pattern at B-schools & engineering colleges. This year a number of placements are fewer and there is also no hike in the average pay packages and will be difficult for the several business schools to get 100 per cent placement in future.

The paper also stressed that nowadays students are not concerned about the quality of education in an institute, they only want to know the placement and salary statistics and discounts offered on the fee structure and this has spoiled the entire education system, adds Rawat.

Assocham has advised to improve the infrastructure, train their faculty, work on industry linkages, and spend money on research and knowledge creation and making students employable rather than employed.