Bangalore: In February, placement consultant Kris Lakshmikanth thought business schools were the one bright spot in an otherwise lacklustre economy. He signed on four B-schools to help students find jobs.
Out of a pool of at least 200 students, his firm, The Head Hunters India Pvt. Ltd, based in Bangalore and with branches in Hyderabad, Chennai and Mumbai, was able to place a mere 30. “All the schools want us to come (on board) this time too,” says Lakshmikanth, the firm’s founder chief executive and managing director, who has decided against it for the coming season. “But the output is not commensurate with the effort put in.”
Second- and lower-rung B-schools reached out to consultants for the first time in the previous placement season—December to March—to find jobs for their students. Job openings were fewer to come by as economic growth slowed and several firms put hiring on hold.
Even elite schools such as the Indian Institutes of Management weren’t spared the impact of the economic downturn in India and deepening recession in the West that kept many overseas banks away. The average salary for domestic jobs offered to the graduating batch of IIM, Ahmedabad (IIM-A), considered India’s best B-school, dropped 32%.
This time too, lower-rung schools are interested in enlisting consultants, but they have few takers. The reasons: low success rates, students’ “disproportionate” expectations and the reluctance of established firms to deal with a third party.
Consultants such as Head Hunters and Leadership Capital Consulting Pvt. Ltd have washed their hands of B-schools this time. B.S. Murthy, chief executive at Leadership Capital, says, “Expectations are very high. Everybody wants a Rs5-6 lakh job.” His firm worked with two B-schools last year, tried to place at least 60 students and got jobs for a mere nine.
Hyderabad-based TMI Network Pvt. Ltd tried to place 1,200 students from four schools, but could find jobs for less than one-tenth of them. T. Sreedhar, managing director, TMI Network, says, “Clients are not hiring...We can’t force-feed them.”
TMI Network is now looking at this space with a three-five year horizon, concentrating more on training and less on placement. It has tied up with a B-school in Madhya Pradesh for this programme.
Institute of Management Technology (IMT), Nagpur, a second-rung B-school with 300 students, engaged three consultants last year. But they could place only 20 of some 100 students. “The consultants were successful only to a certain extent,” says IMT director Anwar Ali. He is talking to consultants this time too although he hasn’t engaged anyone yet.
Priyam Dass, 22, a second-year student at IMT Nagpur, says, “Last year was very bad...We expect things to be much better.” He hopes to get a job with a technology firm in the human resource department.
While the recruitment industry may have slowed considerably over the past year, with revenue plunging 40-50%, bigger placement firms are steering clear of B-schools.
India’s largest staffing company, TeamLease Services Pvt. Ltd, says it has got enquiries from 20-25 schools, up from 10-15 last year. Ma Foi Management Consultants Ltd says at least 40 schools have reached out to it for placement assistance. But neither company is interested.
Manish Sabharwal, chairman at TeamLease, says there is a surfeit of MBAs in firms. “B-school students are in the middle of the road, hit by trucks from both sides.” The two trucks: lack of work experience and high salary expectations.
Not all consultants are deterred. Bangalore-based Ikya Human Capital Solutions Pvt. Ltd, with offices in 10 cities, is working on an end-to-end placement service. It plans to enter the market reaching out to 150 second-rung B-schools, says Ajit Issac, managing director and chief executive officer at Ikya.