Monday, Oct 20, 2008
With top-notch companies collapsing, MBA graduates may not get their dream job offers.

The dream job of every management graduate may just have lost its sheen. With multiple sectors in diverse markets plumbing financial depths every other day, recruitments in the otherwise plush “management profile” may take a nosedive. The most coveted of all sectors and touted as the dream job of the IIM graduate — Investment Banking and the financial sector in general — received an irrecoverable blow when top recruiters Lehman Brothers and Merrill Lynch wound up last month.

While bailout packages have not brought even a semblance of order into the system that has gone haywire, the MBA student in India may be forced to diversify into tertiary sectors such as manufacturing.


With summer placements starting in mid-November at the IIMs, and other B-schools advancing their placement season, all eyes will be on the campus recruitment scene this year. Even as news trickles in of markets across Asia and Europe following their U.S. counterparts on the downhill path, B-schools and the IIMs gear up for both their admission and placement season.

The mood differs
Going by an increase of 50,000 in the number of applicants for the Common Aptitude Test-2008 (for entry into the IIMs and other top-notch B-schools), the mood of the MBA aspirant is still optimistic, if not upbeat. However, B-school graduates of the 2007-2009 batch looking at passing out of their courses this year, are not as optimistic about their prospects.

Star employers such as Lehman Brothers and Merrill Lynch showed early signs when they reduced their intake of management graduates last year for summer placements. In IIM-A, the financial sector saw internships drop from last year’s 57 per cent to 35.9 per cent while consulting and marketing sectors saw a rise in intake from 17 per cent and 14 per cent respectively to over 22 per cent this year.

With the summer placement looming ahead in November, Merrill Lynch and Lehman Brothers will be deeply missed. Investment banks are slot zero companies which lap up the cream of every college and both these companies had made pre-placement offers to students who did summer internships with them. These students will now participate in the placement process now. Also, 13 job offers had been made in the last placement season.

Sourav Mukherjee, chairperson-placement at IIM-Bangalore, said students should not concentrate on finance alone. The much-coveted finance portfolio will be looked at with renewed caution. “This season will definitely be bad compared to the last few years.”

Prof. Mukherjee says that there may be two eventualities: either the slump will be confined to the financial sector or there will be an overall dip in the sentiment itself.

In the former case, he says that IIM-B will look at allowing more companies to come in or even diversify into various international job profiles such as the Middle East. Every year, 200 companies write to IIM-B to participate in placements, and nearly 70 are invited to the campus. This year, we may invite all 200 to come, Prof. Mukherjee says. However, in the second scenario, things will be a lot worse. “General optimism is that there is still international interest in India. We are at the edge, since finance provides the most attractive job profiles,” he adds.

The mood among students is that of uncertainty and all eyes are on the placements in November. “Students will be playing it safe. There is time till March for the main placements but the internship offers will be seen as an indicator. Consulting firms have not been affected so far, so we hope that will go strong,” says Anuj Pradhan, final year student at IIM-B.

Tactical move
Assuming that the total pool is constant, if the top-notch institutes eat into the “less-preferred” IT, marketing or manufacturing sector, smaller MBA institutes will feel the pinch. Lata Chakravarthy, Dean of IBS, Bangalore, says that keeping the current situation in view, the college has advanced its placement season by more than two weeks.

On the day the placement season started, Lehman Brothers crashed, creating panic among students. “We have been preparing students in terms of their expectations. Since the market is not upbeat, we tell them to gear up in terms of domain knowledge. We conducted extra mock interviews and group discussions. So far, our recruitment season has been fine, but we are keeping a close watch,” she explains.

B.V. Krishnamurthy, Director of Alliance Business Academy (Bangalore), says that the problem is deeper than it seems.

“The U.S., apart from facing a recession, is also facing an election year, and it is unlikely there will be any policy decision till March. This means that the uncertainty will be stretched out, in which case corporations will wait and watch.”

The industry may recruit, but colleges will be wary of an engineering college-like situation where deferred placements and long gestation periods have left many a student in a limbo.

“Every year, there is an increase of 20 per cent in remuneration. This year, that is unlikely as a result of which sectors such as manufacturing may be able to attract better students,” Prof. Krishnamurthy says.