New Delhi: Vedanta Kumar, who graduated in December from the Wharton School at the University of Pennsylvania, Philadelphia, intended to return to India after working for a few years in the US.
A summer internship with an investment bank in Mumbai last year, and the ongoing financial crisis in the US convinced Kumar, who grew up in Kolkata, that he could not wait. He will return to join the same bank as an analyst in July, not something he had decided to do when he interned with it.
“Initially my decision to intern in India was prompted because I wanted to experience what working in India would be like,” said Kumar, 22, who is not authorized by the bank he has been hired by to reveal its name.
Home-bound: Vedanta Kumar, a graduate from the Wharton School, has decided to join an investment bank in Mumbai.
Kumar is at the vanguard of a trend that could add another twist to the coming so-called placement season at India’s business schools, a period when companies vie for the best talent on campus.
This year, fewer companies are expected to visit campuses—several international investment banks, traditionally big hirers on campuses, have either gone under or no longer exist in their previous forms—and the competition among students will be tough.
Fresh graduates such as Kumar, and Indian alumni from international business schools could queer the pitch further for students on Indian campuses. The slowdown in the US may be forcing them back home where it isn’t yet as pronounced.
“We certainly are seeing a lot more interest from Indian students in foreign business schools,” said Sri Rajan, partner at consulting firm Bain and Company’s Indian arm. “We are seeing a lot more applications for two reasons—economy in the US is pretty bad and long-term growth prospects of India are better. So, applicants are hedging their bets.”
Still, added Rajan, this hasn’t affected the consulting firm’s campus plans. It plans to hire as many as originally planned.
Some of the students from foreign schools applying for positions in India are discovering that the country is a different place from what it was in the past three years. The economy is no longer expected to grow by at least 9%, the average rate of growth for the past three years. Instead, it is expected to grow close to 7% in 2008-09. The Bombay Stock Exchange’s benchmark Sensex returned a negative 52% in 2008 after returning 45% each for the previous two years. Revenue growth is slowing and profits are falling, and companies are no longer hiring as many people as they used to.
Representatives of some schools such as the London School of Economics and Political Science, or LSE, which offers a master’s in management and not a master’s in business administration, and University of Chicago’s Booth School of Business say that students, after a surge in interest in India, are realizing that recession has hit the country as well and jobs may not be theirs for the taking.
“A student told me earlier: ‘For most of us, it’s Mumbai, Shanghai, Dubai or goodbye’,” said Fiona Sandford, director of careers service at LSE, which held a fair last year for Indian recruiters that included TAS, the on-campus recruiting arm of the Tata Group, Infosys Technologies Ltd and Tech Mahindra Ltd.
But that was before economists discovered that the recession was a global one. No fair will be held this year as Indian recruiters have not confirmed their travel to London.
“Students realized it is harder to hide but attraction in working in these tiger economies continues. But perhaps the tiger is roaring not so loudly,” added Sandford.
Some students say India will remain a long-term bet for many and recession has nothing to do with their plan to move back home.
At Chicago’s Booth School of Business’s Class of 2009, Pooja Rajput said her decision to join Citigroup Inc. in Mumbai in June is partly to move back home near her parents after nine years in the US, and partly to put India on her resume.
“If you have a year-and-a-half of India experience and a US degree, you can make the same amount of money (as in the US),” said Rajput, 25, an MBA student who was part of a team of 22 from her school to visit India last month. She and her batchmates met Indian companies and scouted for internships and full-time jobs.
Rajput added that India’s pull remains strong, even for non-Indians. Despite the slowdown in India, she said, 30% of the group on south Asia that she co-chairs at her school, is composed of non-Indian students and their membership has shot up in the last two years.
Alumni networks in some international schools say they do get desperate calls from people who have lost their jobs in the US and see India as an alternative destination. A network formed in April last year to help Wharton students, and alumni, find a job in India has received 300 applications.
“Yes, indeed. I get emails all the time (from those) who have lost their jobs in the US. It is tougher and tougher to help people as India has also got affected,” said Pankaj Dinodia, a 2005 Wharton alumnus who set up the network and has worked for Goldman Sachs Group, Inc. in India.
The network helped Kumar land his summer internship in Mumbai.
Before deciding to take up a job offer from this bank, Kumar, who graduated in three-and-a-half years instead of the usual four, sat down to talk with his sister and brother-in-law, both of whom are in the US and have worked for investment banks. They discussed India’s attractiveness as a place to work, given that it may not be touched by recession as much as the US.
The talk also focused on the fact that since Kumar meant to return to India anyway, this was a good time to do so. Decisions such as his have worked to the advantage of recruiters.
“Because applications are more from that perspective, competition has increased but it’s not that we suddenly decided to consider (these foreign applications),” said Sri Rajan.
Vinod Nair, managing partner of Diamond Management and Technology Consultants’ India practice, said his firm is getting two to three times the applications it got last year from abroad. (The firm is among the consultants used by HT Media Ltd, the publisher of Mint). These applications range from students about to earn their degrees to more experienced professionals.
“You are looking at competition going up significantly,” said Nair, who will travel to the top Indian Institutes of Management and the Indian School of Business, Hyderabad, for on-campus recruitment.