IIM BANGALORE, 2002: Newly minted grads wait for their turn at the interviews. They got the highest average (rupee) salary of all IIMs

By 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 School.

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 two functions.

WHY THIS VEIL OF SECRECY? Be it admissions or placement, Indian B-schools just don't reveal enough.

IIM-A GRADS: World, here we come 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, Amitava Banerjee. 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 resigned.

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 students' way.

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. Sachind Prasad, IIM-Bangalore

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 sock-pulling work.

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.