The economic slowdown has finally reached campuses of the premier Indian Institutes of Management (IIMs).
This year, IIM Ahmedabad (IIM-A), the largest and most prestigious of the institutes, has seen a 50 per cent slowdown in placements on the coveted "day zero" (the first day), probably for the first time since the dotcom bust in 2000.
Sources said only 18 to 20 out of 250-odd students were placed on day one yesterday, compared to 40 to 50 in a good year. Last year, when the economy was booming, more than 65 per cent (161 students) were hired by 25 firms on slot zero.
IIM Ahmedabad may have missed regulars like Lehman Brothers and Merrill Lynch on day one of its final "placement week," but new companies from other sectors might save the day for the institute .
The placement procedure is expected to continue till late night on Thursday and sources maintained that sectors like general management, market research, FMCG and pharma will be among the new participants on day one. There is less enthusiasm from foreign firms this time, and it's the domestic ones that are more prominent.
This year, IIM-A has kept the placement development under wraps. According to Samir Barua, director of IIM-A, "There has been speculation in media about the placements. We are only into a day and a half of the placements and it is too early for us to comment."
Last year, 90 firms participated, offering an average domestic salary of Rs 17.85 lakh and an average international salary of $119,000. The highest domestic acceptances ranged from Rs 50 lakh to Rs 70 lakh last year and the highest international acceptances from $280,000 to $360,000. The number of companies visiting campus on day zero this year could not be ascertained.
"It is evident that the economic downturn has affected placements this year. Nevertheless, it has opened up opportunities for organisations in newer sectors like market research and pharma. Investment banks and consulting firms did come on day zero as usual, but so did companies in the newer sectors," said a source familiar to the development.
Meanwhile, IIM Bangalore begins its final placements on Friday and students are keeping their fingers crossed. “The institute has had a subdued response to its lateral placements this year and says there is a lot of uncertainty over the number of companies that will participate in placements,” said a placement official.
The number of participating companies on the campus would come down to around 70 from about 100 last year. In 2008, investment bankers including McKinsey, Lehman Brothers, Boston Consulting, Goldman Sach and Merrill Lynch were leading in terms of placement offers. Most of these companies are not participating in the final placement this year.
About 250 students will sit for placements this year. IIM-B's summer placements were also not all that successful this time. Only 55 students of the 2009 graduating batch have managed to get pre-placement offers as compared to 110 students of the 2008 graduating batch.
Also, unlike previous years when each student managed to get at least four or five offers on an average, this year it might not be the case.
Although all the IIMs have contacted a number of new companies to increase the pool, they are hoping that there is no overlap of offers. “In over-lapping, a student accepts only one offer, the rest get cancelled and go waste. We are hoping this does not happen this year,” said a placement chairperson from one of the IIMs who did not wish to be quoted.
IIM Calcutta, which held the first phase of its final placements process between February 21 and 24, saw 207 offers to 265 students. Out of the 207 offers, 33 are for international locations with assignments in the US, UK, Europe and Asia-Pacific. India still remained the preferred destination most of the students. Around 56 offers are pre-placement offers (PPOs), made to students based on the summer internships. Some PPOs were rejected owing to the expected curb on H1B visas by the US and location preferences.
The institute said it has seen an increase of around 20 per cent in its salary level so far. Last year, IIM-C recorded the highest salary at $340,000 (Rs 1.36 crore). The institute will resume placements on March 2 after the final examinations.