The placement season this year is turning out to be much worse than expected. My expectation was that at least in the top 20 B-schools all the students would be placed even though salaries would be down by about 20%. But as it turns out, things are a lot different in January 2009 than they were in January 2008, when placements were almost over in most B-schools.

Almost all multinational companies (MNCs) have stopped recruiting. It is likely that in many of the top 20 B-schools about half of the graduating batch won’t get a job by April when it finishes its programme. In lower-rung B-schools, the unemployment rate could be between 60% and 100%.

Even in the Indian Institutes of Management (IIMs), where the placement season begins after a few weeks, the pre–placement offers are not encouraging and there is a pall of gloom.

These are indeed testing times for our B-schools and students. Instead of just waiting for the good times to return, our institutes should be proactive in changing the environment. For this, they first need to change their orientation from being just placement-centric. The silver lining is that this change could become a necessity for those who choose to emerge stronger from the crisis.

Also Read Premchand Palety’s earlier columns

Dark clouds: The administrative building at IIM Calcutta. With this year’s placement season turning out to be worse than expected, B-schools need to relook academic processes and produce job creators, not job seekers. Indranil Bhoumik / Mint

The principal justification of the hike was the high salaries that the students were getting. Students also did not mind the increase as getting educational loans and repaying them seemed easy.

Now, many could face the situation of a high loan burden and no income to repay it. How long this crisis will last is anybody’s guess. Even though some say that the crisis could last for two years, nobody seems to be sure when the era of high pay packages will return to the campuses.

The flip side of the crisis is that students from top institutes are willing to join start-ups and now some B-schools are looking at ways to reinvent themselves, one of which is by promoting entrepreneurship among students.

The National Entrepreneurship Network (NEN), a not-for-profit initiative that promotes the entrepreneurial culture among institutes, has been approached recently by many top B-schools. NEN is networked with at least 500 high-growth and high-potential start-ups throughout the country and is facilitating the interface between them and the institutes. It has so far enabled 73 students to get placed in start-ups over the last seven months.

Hopefully, the orientation of our B-schools will change from creating job seekers to creating job creators. Starting one’s own enterprise has been one of the least preferred options for students. The other day, B.S. Sahay, director of Institute of Management Technology, Ghaziabad, told me how last year three of his students, who won the best business plan award in a national contest, were still reluctant to convert the plan into an enterprise because they had good job offers. However, Sahay convinced them to start the business instead of running after jobs. This year, such students won’t have the luxury of options.

B-schools, on their part, should also reinvent their academic processes. Curricula need to be revamped, with redundant courses being scrapped; instead, more time should be devoted in identifying growth areas, filling demand-supply gaps and generating good business plans. They should also introduce courses such as how to start a business, write a business plan and raise capital.

Some institutes such as the Birla Institute of Management Technology are trying to reinvent themselves by focusing on areas such as rural business, social entrepreneurship, microfinance, micro-entrepreneurship, green business and clean technology, etc. It’s time B-schools started incubators on campus and helped students get finance for their projects. As of now, not even 10 B-schools have functional incubators.

Only those B-schools that are proactive in reinventing themselves can meet the crisis head-on. Those who just wait for the economy to recover are likely to lose out.

Premchand Palety is director of Centre for Forecasting and Research (C-fore) in New Delhi, from where he keeps a close eye on India’s business schools. Comments are welcome at