The art of placement: Cash under the table

A bad job market and a relatively unknown institute profile have made many B-schools add a new component to their charges — placement fee.

These B-schools say HR executives of some companies seek under-the-table money, and a luxury treatment for recruiting students from their campuses. Over half a dozen B-schools Business Standard spoke to confirmed, on the condition of anonymity, that they had been ‘forced’ to charge students between Rs 20,000 and Rs 30,000 as extra fee to meet placement expenses.

“Students judge B-schools by the placements they provide. And, in tough times like these, when companies are not hiring in big numbers, recruiters want us to meet their needs for picking up students from our campus. The corruption among HR executives is appaling,” said the director of a B-school in Delhi-NCR. HR executives demand anything from a five-star accommodation to expensive gifts. Many seek cash too, say B-schools. “The executives seek anywhere between Rs 3,000 and 5,000 per student as their cut. B-schools cannot meet the placement expenses from their pocket. So, we have to charge placement fee from students,” said the placement chairperson of a Delhi-based B-school that has leading bankers on its board of governors.

The director of an organisation who tracks developments in B-schools said this practice was becoming rampant.

“I am on the board of a B-school in Indore. In our recent board meeting, when we checked the accounts, we found fee charged under the head ‘placement fee’. The institute director then told us they had introduced this component to meet placement expenses,” he added.

Surprisingly enough, these HR executives represent big companies, including multinational and domestic banks, consulting firms, multinational FMCG players and various other sectors.

What is worse is that even after charging a placement fee, these B-schools are able to place only about 25 per cent of their batch size of around 100 students. Many times, these students, after having paid fees of Rs 3-3.5 lakh for their two-year management programme, end up in sales jobs that offer annual salary of Rs 1.5 lakh.

“B-schools are desperate to place students. And, HR executives are aware of this. They also know that these students may not be extremely bright, so these schools would do anything to post a 100 per cent placement picture,” said the senior vice-president of a recruitment company.

She added that in the recruitment business, taking money to place people was a done thing. A lot of placement companies also charge at least a month’s salary as registration fee. “In North India, a lot of companies tell us that you take care of us, we will take care of you. It completely depends on the person on the seat,” she added.

The Indian Institutes of Management (IIMs), on the other hand, charge from companies for recruiting students from their campuses. Earlier, IIMs used to also charge participation fee from companies. But two years ago, they did away with this.

IIM Bangalore charges between Rs 40,000 and Rs 1 lakh per student, depending on the day the company is on campus. IIM Ahmedabad charges between Rs 75,000 and 1.5 lakh per student from companies.

“We charge companies because we need to make this process self-sustaining. We set up a make-shift office for companies. This involves taking care of IT infrastructure and hospitality. So we need to charge the companies,” said the placement coordinator at one of the IIMs.