New Delhi: Kiran Raj, 24, a first year student at the Indian Institute of Management, Bangalore, one of the country’s best known B-schools, is really looking forward to his summer internship. Contrary to the usual internships, Raj’s isn’t going to be at an investment bank or a multinational consumer product company.
It’s at a two-year-old firm that operates in the rarefied and still-new discipline of analytics.
Raj’s choice of an internship at Active Cubes Solutions India Ltd is being mirrored across India in B-school campuses, as students opt for smaller companies, even start-ups, for internships and jobs, even as the economy slows and traditional recruiters on such campuses plan to stay away from them this year or hire fewer than they have traditionally done.
At IIM-B, Raj is one of six students who have chosen to intern with start-ups or small and medium enterprises (SMEs). A typical internship lasts six-eight weeks between the first and second years of two-year MBA or business management programmes at schools such as IIMs.
“I have always wanted to start my career with a start-up,” says Raj, because of the “entrepreneurial” profile of the job on offer. He says if the firm and the job are all they promise to be, he will sign up with Active Cubes after his course.
Apart from Active Cubes, small firms that visited IIM-B to hire students for summer internships include Myntra Designs, a personalized gifting company backed by venture capital firms NEA-IndoUS Ventures and IDG Ventures India, Spire Technologies and Solutions Pvt. Ltd, a talent identification and assessment company, Mindswork Consulting, an infrastructural and architectural design company and Zinnov Management Consulting Pvt. Ltd.
The New Delhi-based Faculty of Management Studies (FMS) says more SMEs are visiting its campus. “There has been a 30-40% increase in terms of participation by SME players in campus recruitment,” says Arvind Narasimhan, placement secretary and a second year student at FMS. Between 18 and 20 SME firms participated in the school’s placements programme in October as compared with 12 the previous year.
This phenomenon is likely to be repeated when placement season starts at the school in February. At IIM-B, the placement team is finalizing the list of companies that will be invited to participate in the placement season. “It’s too early to give out details on how many SMEs/start-ups we are inviting, but all I can say is we are looking at all options,” says Vineet Sharma, a first year student and placement representative. IIM-B’s placement season begins in March.
If more students at schools such as these are willing to consider jobs in start-ups and small firms, attribute it to the slowdown, says Anita Belani, country head, Right Management Pvt. Ltd, an HR consulting firm. “The recession has blown the myth of stability as a number of large companies carry out layoffs.”
It helps that “a majority of these companies (start-ups and SMEs) have started offering attractive packages including equity-based compensation,” she adds.
A survey by global staffing-services firm Manpower Inc. says firms in India are likely to slow hiring to a three-year low in the first three months of 2009. “Jobs for graduates are drying up,” says Narasimhan. “Students are therefore going the whole hog and casting a wider net for finding a berth this year unlike in the past.”
Anand Kannan, the managing director of GREedge.com, part of Valued Epistemics Pvt. Ltd, a company that is in the online training (for the graduate record examination) and product development space, says it has been invited by one IIM and four Indian Institutes of Technology, or IITs, this year, the first time it has received such an invitation.
Start-ups have always hired students from engineering schools such as the IITs, but they are just finding acceptance on B-school campuses.
IIM Ahmedabad had a separate process for start-ups during its summer placement season in October. The school is still deciding on its strategy with respect to start-ups for its placement season, says Mihir Lal, member of the students placement committee.
While the schools and students may be turning to small companies because of the economic slowdown, the firms themselves aren’t complaining. For most, it’s an opportunity to pick premium talent.
“(The) market correction has not only freed up good talent but also led to salary rationalization across the globe,” says Venkat Rangan Gopalan, chief executive officer, INXS Technologies Ltd, a technology provider to financial services companies.
“All this may help small companies like us afford students from premium colleges.”
INXS has already started hiring “financial services professionals from Wall Street for our US arm”, says Gopalan, and the company is looking to scour local campuses for its research and development unit.