Corporate enrollments bear the brunt of the slowdown as companies reduce their training budget by 20 per cent.
If reducing travel and accommodation costs was not enough, corporates have now begun cutting down on sponsorship of online MBA programmes by 15-20 per cent to conserve cash.
Companies in the IT, finance and automotive sectors have reduced enrollments, according to U21Global — an online graduate school. However, there is some upside visible in sectors like oil and gas and infrastructure, says Bhaskar Das, director of U21Global.
“Corporate enrollments have indeed gone down. Significantly, it is industry -specific. The IT sector, the automotive sector have frozen their enrollments by roughly 15-20 per cent. CEOs are increasingly putting pressure on HR Heads to contain their training budgets, and going online is a surefire way to ensure that only the training budgets are cut, but not the training itself. Our customers have assured us that these cutbacks are temporary and they expect to process nominations this quarter. The first quarter of 2009 for us was also the final quarter for a large number of Indian companies and is typically not the best quarter for training,” says Das.
The upside in sectors like oil and gas and infrastructure is being attributed to expansion and large projects that have led companies go for online training. For instance, U21Global — which not only offers two-year MBA programme but also introduced global management development (GMD) series in March offering shorter courses spanning three weeks — recently saw enrollments from Suzlon Energy.
A typical online MBA programme, according to Das, costs around Rs 4 lakh per person. “Depending on company policy, sponsorships vary from 60 per cent to 100 per cent. Corporates have to sponsor on an average 70 per cent of the fees. For instance, if we get 50 enrollments, it would cost around Rs 1.5 crore for a company. In the downturn, corporates are now more into conserving cash and have, therefore, begun cutting down on these costs. The silver lining is that short term courses like the recently launched GMD seem to be striking a chord with the corporates as they don't cost them much,” he adds.
Also, as against corporates, individual enrollments have picked up to some extent. “Although, U21Global has had approximately 18-20 lower enrollments in first quarter of 2009 as compared to the corresponding period last year, the student mix has shifted from a corporate to individual ratio of 70:30 to 40:60,” says Bhaskar. Currently, the online graduate school has over 6,600 students worldwide of which over 2,800 students are from India.
