|IIM BANGALORE, 2002: Newly minted grads
wait for their turn at the interviews. They got the highest
average (rupee) salary of all IIMs
any measure, it's been a bizarre placement season for India's business
schools. As recently as January 2001, if you had asked any student
at the IIMs what his or her prospects were like, thumbs would have
gone up in response. But in barely a year, the B-school scenario
has gone from boom to bust. Courtesy: the weird series of events
that rocked India and the world beginning early 2001. Just when
it seemed that the tech downturn couldn't get any worse, the September
11, 2001, attacks on the World Trade Center happened, sending global
industry into a tailspin. Then, the mother of all corporate scandals
unravelled at Enron, raising fresh concerns over corporate transparency
and over-zealous culture. The new year brought some good news from
the US economy watchers, who pointed out that a surprise recovery
was underway. But before India could cheer, Gujarat erupted in bloody
violence. And now we might be caught in a prolonged fracas over
the Ram Janmabhoomi issue.
All that has meant that 2002 was a bad year
to be passing out of Indian B-schools-make that any B-school. A
recent report in American news magazine, BusinessWeek, points out
how at the top 15 B-schools in America, only 50 to 60 per cent of
the students have job offers compared to 65 to 70 per cent last
year. And salaries are down 5 to 10 per cent across the board. The
eye-popping signing bonuses that students received as recently as
last year, now seems a dream to many.
| ISB: DEBUTANTE'S PROBLEMS
An impressive parentage, superlative faculty,
and a competitive curriculum are just some of the reasons why
you shouldn't be writing ISB off based on its first-year performance.
December 2001: With placements just a month away,
the Indian School of Business sets out on its courting call.
A thick brochure containing profiles of its 128 students is
couriered to recruiters, including Lehman Brothers. Nothing
unusual, except that even after 10 days of receiving the brochure,
Lehman hasn't reverted. ISB switches tack. Services of its
Founding Dean and London Business School Professor Sumantra
Ghoshal are requisitioned. Ghoshal calls up someone who has
worked with Lehman. Simultaneously, Girish Reddy, an ISB board
member and Managing Director (Equities Division), Goldman
Sachs (International), contacts his friends at rival Lehman.
|ISB's Dean P. Sinha (front, middle)
with few students: Not a good year to debut
January 2002: The head of recruiting at Lehman in London
reverts to ISB with a shortlist of four candidates he wants
to check out. ISB's placement team, headed by Dean Pramath
Raj Sinha, urges Lehman to expand the list. Lehman relents,
and adds four more to its list. Finally, it ends up selecting
two for the final round of interview to be held in London
for the time being. But ISB hopes that by the end of June,
Lehman will consider a few more names from the list of eight.
So far ISB has placed 100 students and 28 still remain.
If ISB pulled out all stops
to get recruiters, it's for good reason. A year old, it is
India's only international business school. Its one-year MBA
programme, designed to make ''leaders'' instead of mere managers,
is meant more for executives with work experience than college
graduates-IIMs' staple. Therefore, in more ways than one,
ISB is a test case for a new kind of management education.
For that reason too its performance at the campus hustings
was keenly watched as much by potential students and recruiters
as the other B-schools.
So, how has it been at ISB? ''Had the conditions been good
we would have done 200 times better,'' says dean Sinha. At
the time this article went to press, ISB had placed 100 students
(88 had received offers on the campus and 12 were either returning
to their earlier organisations or getting back to family business),
and was hoping to place the rest by early June. At last count,
the highest salary offered at ISB was Rs 25 lakh, made by
Bombardier-a Canadian conglomerate-for the post of country
representative (India). The average domestic salary is Rs
8.35 lakh and the lowest accepted offer is Rs 6.50 lakh. In
terms of dollar salaries, the highest was $110,000 and the
lowest $60,000. Companies that have done the rounds include,
among others, McKinsey, GE Capital, Coca-Cola, Hindustan Lever,
Dr Reddy's Lab, and Goldman Sachs.
Sinha, who spends most of his time on placement-related
issues these days, says that the average salary of the students
placed is up 2.5 times. ''B-school rating agencies generally
look at the percentage jump in salary that a student gets
after finishing his MBA,'' points out Sinha, implying that
ISB more than delivers on that count. Due to the relatively
mature profile of its students, ISB got more ''lateral'' entry
offers-that is for posts of senior manager and above (one
student was even offered the job of executive assistant to
Adi Godrej). Of the 150 offers received until March 19, 2002,
110 were such. That's one more reason, Sinha explains, why
the school has opted for a rolling placement; companies need
to invest more time in selecting candidates for senior-level
posts. How the class of 2003 fares, however, will prove if
isb is worth all the hype.
-E. Kumar Sharma
In comparison, just how bad is the scenario
in India? So bad that little is coming by way of placement information
from the six Indian Institutes of Management (IIMs) (besides the
Faculty of Management Studies, Delhi, and XLRI, Jamshedpur) that
BT-Cool Avenues spoke to. Few were willing to reveal what their
top and lowest salary offers were. Instead, data on average or median
salaries and function-wise placement was made available to BT-Cool
Avenues. Flashback to last year and the same B-schools were jostling
each other to get stories printed about their top-dollar salaries
and fancy foreign posting offers. ''This is the worst year in a
hundred for B-schools,'' quips Pramath Raj Sinha, Dean, Indian School
of Business, which is backed by Wharton, Kellogg and London Business
Sinha may be exaggerating for effect, but it's
a fact that both the number of offers and average salaries on campuses
are down. For example, at IIM-A-the most revered of B-schools in
the country-the average salary at Rs 5.88 lakh was lower than last
year's Rs 7 lakh. Interestingly, graduates with work experience
benefited more, with their salaries rising as much as five times
over their pre-school salaries.
The number of pre-placement offers (PPOs) from
Indian companies shrank, although foreign companies actually made
more PPOs. In fact, almost a quarter of IIM-A's class of 2002 got
jobs outside India.
Similarly at IIM-Bangalore, the average salary
offered by Indian companies slipped to Rs 7.3 lakh per annum from
Rs 7.6 lakh last year. So did the lowest salary offer, from Rs 3.6
lakh to Rs 3.5 lakh. Even the number of participating companies
at IIM-B fell from 59 in 2001 to 55 this year. Says IIM-B's Arvind
Thippanaik, 24, who took up a Rs 6.8-lakh per annum salary job with
Johnson & Johnson: ''Given the downturn, I thought it would
be a bloodbath. But fortunately, there is no drastic reduction in
the number of companies coming for recruitment.''
Pramath Sinha's own school, keenly watched
because of its international parentage and a unique one-year programme,
seems to have made a hard-landing in its first year. Although placements
at the Hyderabad-based school started on January 11, there is a
''rolling placement'' that will continue until June. At last count,
some 56 companies-including McKinsey, Goldman Sachs and Hindustan
Lever-had visited the campus and made 150 offers to 88 students.
ISB's Class of 2002 has 128 students. Says Sinha: ''Had the conditions
been good, we would probably have done 200 times better.''
The Great Shift
The churn in industry led to some predictable
results. Consulting jobs were harder to find. Accenture chose to
stay away, and Andersen-not just because of the scandal-chose to
hire fewer people off campuses. PricewaterhouseCoopers, which made
more than 40 offers last year, was much more cautious. It made 13
offers at IIM-C and four at IIM-B. McKinsey, the big daddy of consulting,
was on a diet too. The Firm refused to give any exact numbers but
said that its intake this year was comparable to last year's. The
result: at IIM-A, a favourite hunting ground for general management
and consulting jobs, just 16 per cent of the class opted for these
| WHY THIS VEIL OF SECRECY?
Be it admissions or placement, Indian B-schools
just don't reveal enough.
As soon as you land up in a B-school,
one of the first things you will be taught is the importance
of corporate transparency and disclosure. Post Enron, the emphasis
will be greater. But that, like most other things taught at
B-schools, is only theory. For example, try comparing the placement
data provided by an IIM with that of, say, Wharton Business
School. The IIM's report will read like Enron's balance sheet:
it will hide more than it reveals. But Wharton will bare all,
and also slice and dice data for you every which way. In fact,
few Indian B-schools provide placement data on their websites.
Ask them why, and they'll say ''it's confidential''. "(Disclosing)
overall average salaries tends to send out confusing signals
to two of our most important constituencies-potential students
and firms that recruit at our campus," says IIM-C's director,
|IIM-A GRADS: World, here we come
But such absurd secrecy-fuelled obviously by a desire to
maintain their lure among applicants-isn't limited to placement
alone. It starts right with the admission process. Applicants
who clear the combined admission test (cat) and the interviews
have no clue as to why they end up where they do. For instance,
somebody might make it to IIM-A and somebody else, despite
being as bright and competent, may be placed at any of the
other IIMs. Even the weightages assigned to the various aspects
of admission are not revealed to the students. And if you
didn't make it through cat, keep guessing why.
Besides, Indian B-schools seem to be more political, thanks
partly to the government's undue meddling. IIM-C's chairman
Subrato Ganguly quit on February 12 this year, although he
was to retire only in April. Why? He was protesting against
the government's decision to control the appointment of IIM
directors and chairman. Incidentally, IIM-A has also been
without a chairman since August last year, when I.G. Patel
Infotech jobs weren't any easier to find. The
big news, however, was the return of Infosys after a year's break.
The company refused to reveal how many students it picked up on
campuses this year. Foreign tech biggies like i2 Technologies, Fatwire,
and Blueshift Technologies were missing, while the Satyams and Wipros,
on whom the students rely for heavy recruitments, proved abstemious.
For instance, Wipro nabbed just four candidates at IIM-B. But a
bigger let down from the students' point of view was the dramatic
reduction in the intake by companies like HCL Technologies (down
from 80-plus to 30-plus) and Polaris (from 70-plus to 30-plus).
Therefore, it was upto marketing and finance
to save the day for the class of 2002. Coca-Cola India, ITC, HLL
and P&G were some of the consumer goods majors who put on a
strong show. In finance, the most active recruiters were in retail
banking and insurance, led by firms like Citibank, American Express,
GE Capital, ICICI, and Metlife. Usually the hottest recruiters,
investment bankers laid low.
On the whole, there were fewer international
job postings, although there were some happy stories like that of
IIM-B's Sachin Prasad, who got a S$400,000 job with P&G's Singapore
office, soon after he finished his summer placement at the company's
Mumbai office. ''It's a dream job for me,'' says Prasad, just 24
years old. At IIM-A, 29 overseas investment banking jobs came the
Fewer hunters on the B-school campuses, however,
meant that there was more game for those who did come. Until last
year, too many companies were chasing too few students at the IIMs.
For example, in 2001, the top five recruiters picked up more than
a fifth of the outgoing class at IIMs, and by the time the next
top five left the meeting rooms, a third of the class had been cleaned
out. That usually left the day two recruiters cribbing.
But this time round, with the number of offers
per student falling, companies had the luxury of being more discriminating
in their offers.
|Prasad got a $ 400,000 a year "dream
job" with P&G in Singapore.
So, is the MBA bubble bursting? At the tier-one
schools, certainly not. To be sure, not everything is hunky-dory
at the top schools. But the sheer competitiveness of the entrance
examination ensures that only the best talent gets into these schools.
Therefore, companies will continue to make a beeline to top schools.
But the hundreds of lower rung institutions-which BT-Cool Avenues
chose not to survey, simply because of logistical issues-need to
sit up and take stock. Not only is their raw material (students)
poorer than that of the IIMs, but their faculty, infrastructure,
and corporate contacts are dismal too.
No doubt, a clutch of tier-two B-schools is
pumping in a lot of money into infrastructure and image-building.
But ultimately, their success will depend on how well their students
perform on the job. It's the corporates' experience with alumni
that will determine whether or not they return year after year to
these campuses. And 2002 may be a good time to embark on some serious
CoolAvenues.com is an MBA-community network.
The survey was coordinated by CoolAvenues' Shailesh Vickram Singh,
Lokendra Tomar, and Sandeep Dhaka. For more details visit www.coolavenues.com/placement/2002/index.htm.