Kolkata: First the surprise—and a pleasant one at that. Other than Lehman Brothers Holdings Inc., which went bust in mid-September, all international banks that made so-called pre-placement offers, or PPOs, to students of Indian Institute of Management, Calcutta (IIM-C) have kept their word.
Some 60 IIM-C students had received PPOs from financial and other companies they had interned with. Credit Suisse, HSBC Holdings Plc., Bank of America Corp. and even firms such as Morgan Stanley and Citibank NA, that have cut thousands of jobs, honoured their PPOs and are hiring.
“Even PPOs made by Merrill Lynch have been honoured by Bank of America (which bought Merrill),” said Paul Savio, a first-year student and external communications secretary of IIM-C. “Only Lehman Brothers didn’t because the company doesn’t exist, but everyone else has.”
Head start: IIM Calcutta students during Day Zero of final placements, which saw around 10 recruiters visit the campus. Indranil Bhoumik / Mint
IIM-C is the first of the elite business schools to conduct the final placements this year for graduating students. Around 10 recruiters visited the IIM-C campus on Saturday—the so-called Day Zero of final placements when students sit for on-campus job interviews and tests with employers—although Wall Street recruiters were missing.
This year’s final placements at the Indian Institutes of Management (IIMs) are taking place at a time when banks in the US and Europe are struggling to emerge from the crisis that ravaged the financial industry last year, requiring governments to spend hundreds of billions of dollars in bailouts. In India, economic growth this fiscal is estimated to be the slowest in six years, forcing companies to either stall hiring or hire in modest numbers.
Typically, at IIM-C, Day Zero has belonged to Wall Street investment banks who signed up the best students from the institute within the first couple of days. But this year, those that were most active were consulting firms such as Bain and Co., AT Kearney, Boston Consulting Group, McKinsey and Co. and Frost and Sullivan, according to students who did not want to be named.
Conspicuous by their absence were the big four—PricewaterhouseCoopers, Deloitte Touche Tohmatsu, Ernst and Young, and KPMG. They are, however, expected to turn up later, according to students. None of them wanted to be named because they have been asked by the IIM-C authorities not to speak to the press till the end of the placements.
Taking no chances
Some 10 students of the batch passing out of IIM-C this year had interned with Lehman Brothers, whose September downfall deepened the global financial crisis. Barclays Bank Plc., which has bought some of the fallen investment bank’s assets, has made an offer to one of the students, who had scored 10/10 in the post-internship evaluation.
But even those who have offers in hand want a “back up”, according to Savio, reflecting the uncertain times.
“People aren’t taking chances…so they are sitting for the interviews,” he added. Typically, people with plum PPOs would give the campus placements a miss, and the best investment banks would sign up students immediately after internship.
Some Wall Street firms would still turn up at the campus right at the beginning of the placements, but this year, there’s almost none.
Placement drive: Second-year IIM-C student Krishnan Sekar, who is not taking part in the placements as he has already landed a job with Infosys Technologies, takes a batchmate for an interview on campus. Indranil Bhoumik / Mint
Last year, some 85 companies had come to IIM-C to hire. Many more have been invited this year because of concern that most companies would hire fewer people. For the first time, IIM-C is conducting final placements in two phases— from 21-24 February and from 2 March, after the final examinations.
The top IIMs—Ahmedabad, Bangalore and Calcutta, or A, B and C—have emerged from Day Zero in the past with a large proportion of the graduating batch already placed in jobs. In the boom years, students were spoilt for choice.
Annual salary, with bonuses, touched Rs2 crore and campuses issued gag orders to students to stop them from discussing their offers with peers or the media. Recruiters resorted to aggressive strategies such as hour-long interviews to subtler techniques of wining and dining to woo students.
In 2008, one out of every four students at IIM Ahmedabad, or IIM-A, landed an overseas job offer, according to data collected by MBA community portal coolavenues.com and published exclusively in Mint. As much as 46% of the batch joined the banking and finance streams.
“There seem to be lesser number of offers being made (this year), and the process was less hectic than before,” said Vinod Nair, managing partner of Diamond Management and Technology Consultants’ India practice, who flew down to the IIM-C campus on Day Zero to recruit.
The consultancy recruits at the top IIMs and the Indian School of Business in Hyderabad (Diamond is among the consultants used by HT Media Ltd, the publisher of Mint).
The economic slowdown, though, has converted this placement season into a buyers’ market.
“It is a sombre feeling this time,” said Vineet Kanaujia, general manager for marketing at Safexpress Pvt. Ltd, an Indian logistics company which is planning to recruit students with work experience (who sit for lateral placements) at IIM-A and is negotiating a recruitment slot with the business school.
“Approach (of recruiters) this time is very cautious, of consolidation rather than augmentation.”
IIM-A student placement cell member Vivek Jain said on Sunday that final placements will begin in the last week of February, but didn’t specify a date.
At IIM-C, after the consulting firms do their cherry-picking, the consumer goods companies are expected to turn up. Starting Sunday, companies such as Hindustan Unilever Ltd and Procter and Gamble were going to sign up students who have specialized in marketing.
“Placements are on in full swing,” said Krishnan Sekar, a second-year student of IIM-C. “But we don’t expect salaries (this year) to be as great as they were in the last two years…even if the basic salary isn’t cut, perks and bonuses are certainly going to be much less.”
Sekar has landed a job with Infosys Technologies Ltd. The 25-year-old mechanical engineer from Pune, who worked full time for three years before joining the Post Graduate Diploma in Management course at IIM-C, isn’t taking part in the campus placements.
At IIM Bangalore, final placements will start on 27 February. The placement process for the batch of 250 students, which typically winds up in five days, may very well get stretched this year although everybody is keeping their fingers crossed.
Lateral placements, meant for students with a minimum 22 months of work experience, began at IIM-B in January and went on until mid-February.
“Many of our regular companies are on (a) recruitment freeze. Many companies came but gave fewer offers, they came for (maintaining the) relationship (with us),” said Sourav Mukherji, associate professor and chairperson (placement) at IIM-B, adding the trend is likely to continue for the final placements as well.
Aparna Kalra in New Delhi and Poornima Mohandas in Bangalore contributed to this story.