Kolkata/ Bangalore: Some alumni of the Indian Institute of Management, Ahmedabad (IIM-A) recently received an emailed list of around 130 companies from members of the management school’s student placement committee. In what increasingly looks to be a tough year for business school placements, the email requested alumni to help the committee with contacts in these companies to broaden their traditional portfolio of recruiters.
It’s been a roller coaster year for the Class of 2009.
“We saw bumper final placements of the last batch, a cooling-off during our summer placements and finally a lukewarm final placement season for us, by IIM-C standards,” says Akshay Lal, 27, a second-year student of the postgraduate diploma in management at the Indian Institute of Management, Calcutta (IIM-C).
Tough times: (L to R) Murari, Akshay Lal, Srikrishna Swaminathan, Krishnan Sekar, Vinay Betala and (standing) Diptosh Mishra are among the outgoing batch at the Indian Institute of Management, Calcutta. Indranil Bhoumik / Mint
“Cautiously optimistic” is how Lal, an electrical engineer from Pune, sums up the mood on campus as schools prepare for the placement season that begins in March.
Quite a change from the same time last year when offers made to students of IIM-C scaled a high of Rs1.36 crore a year; industry observers say pay packages will most likely miss the 20-30% spike seen year-on-year. Salaries are expected to remain at the same level as last year or may, at best, factor in the inflation rate.
Teachers say students might need counselling to tide over the dramatic changes that are likely to ensue in the hiring season. “I will have sessions with them (students) myself and if needed, we won’t hesitate to bring in professional counsellors,” says Prafulla Agnihotri, a professor and chairperson of placements.
“While this is still early to say, this year looks quite bad compared to the last few years,” agrees Sourav Mukherji, associate professor and chairperson (placement) at the Indian Institute of Management, Bangalore (IIM-B), who has overseen placements for the last two years.
Pre-placement offers, or job offers from companies where students have worked for during the summers, have seen a dramatic fall.
At IIM-C, so far 60 students have received pre-placement offers against 90 offers last year. The institute was earlier expecting at least 120 pre-placement offers to be made this year, according to Paul Savio, a first-year student and the external relations secretary of IIM-C. It’s the same at IIM-B. Pre-placement offers made to students post-internships total 55 for the batch of 2009 against 110 for the batch of 2008. IIM-A said they would rather not share how many pre-placement offers their students had received.
Last year’s scenario where companies fought for a Day-zero slot (the most sought after slot at the very beginning of placements to recruit the cream of the batch) is a hazy dream. This year students are courting a wide range of employers from start-ups to public sector enterprises.
Mukherji along with his 15-member team of students and faculty are “casting a wide net” talking to numerous companies, coaxing them to come to campus and recruit.
Starting next month Mukherji plans to give periodic pep talks to the batch of 250 students to “set expectations”. He doesn’t normally do this in a good year.
Almost all students say even if there isn’t a significant drop in the number of companies that recruit, fewer jobs would be offered this time.
“If earlier a company snapped up 10 graduates, they’d probably recruit five this time,” says Krishnan Sekar, a 25-year-old mechanical engineer from Pune, who is graduating from IIM-C in a few months.
There’s enough reason to be worried.
Last year, 70 companies made offers to 250 students of IIM-B, out of which about 70% came from financial services and consultancies, two sectors that have been hit hardest by the ongoing global recession. Students are hoping to make up these numbers from companies in relatively less affected sectors such as engineering, fast moving consumer goods, marketing and maybe hospitality.
Up until last year, IIM-B, which used to turn down one in every three companies that knocked on its door, is now “running after anyone ready to recruit”. The school is aiming to get some 120-150 companies on campus this year expecting fewer offers per company.
Mihir Lal, media coordinator for IIM-A’s student placement committee, agrees that the proportion of students going to the traditionally preferred financial sector—in 2008, 113 of the 255 students in the MBA programme opted for a job in this sector—will likely reduce. Rattled by the fall of Wall Street investment banks such as Lehman Brothers Holdings Inc., a significant section of IIM-C students say when they consider a job offer this time, they would certainly pay a lot of attention to job security.
The institute is expecting recruiters such as Indian Oil Corp. Ltd and the Securities and Exchange Board of India—the capital markets regulator—to visit the campus this year, and though they may not offer salaries even remotely comparable with the investment banks, quite a few students are likely to join them.
Media companies and retailers are surely going to recruit in large numbers this year, expect students. They were very active during the last summer placements, but until last year, they would typically arrive when the final placements were almost over.
The wider net of companies also means students who are used to choosing employers will have to be less picky this year. Mahima Vashisht, 23, a second-year student of postgraduate diploma in management at IIM-B, says she wants a managerial role and is “open to all sectors”. According to her, salary expectations are secondary. “Being from IIM-B, we will definitely get a baseline salary.”
The slowdown might push quite a few graduates to consider launching their own businesses, says Agnihotri, but it might not be the right thing to do for most people. “These type of entrepreneurs won’t go far…to strike out on your own needs passion, in good times or bad, and you shouldn’t do it because it’s the second-best option.”
IIM-A’s Lal emphasises that not too much should be read into short-term adversity. Both in terms of the choice of the company and trends towards start-ups, he says that students will “not base a long-term career decision on a two-year market outlook”.
Sidin Vadukut in New Delhi contributed to this story.