More PPOs, less direct placements at B-schools as economy slides
aGlobal financial markets continue to be fragile and indicators of systemic risk remain elevateda reported the Global Financial Stability Report of the International Monetary Fund (IMF) on July 28, 2008. Inflation in India is at a 13-year high, driven by the soaring cost of food and fuel.
aThe situation is serious even at the Indian Institutes of Management (IIMs). At some, PPOs (pre-placement offers in for the batches of 200 have been revoked. The overall scenario can be considered to be dim,a comments a prominent official from IIM Calcutta who did not wish to be named. Other IIMs were not willing to confirm this fact. The faculty in charge of placements at IIM Indore observes, aCompanies and lower tier B-schools are bargaining over students as if theyare vegetables!a
For the batches graduating in 2009, the IIMs expect a 20-25 percent increase in pre-placement offers. However, even the pre-placement offers will not help remove doubts about how final placements will be. aOne needs to understand that for a company participating in final placements, the cost of recruitment per student is over Rs one lakh. This would mean that more companies would participate in summer placements, some may opt out of final placements and participate in summer placements and give out a higher number of pre-placements offers than normal,a explains Professor Prashant Salwan, Chairman-Placements at IIM Indore.
aEven at the top IIMs and other quality colleges such as MDI Gurgaon, companies may opt out of placements or recruit fewer students than usual. At these institutes the pool of companies will remain similar with one or two companies opting out. The lower ranked colleges will be severely affected,a comments Professor Subir Verma, Chairman (PGP) at Management Development Institute (MDI), Gurgaon.
Professor CS Venkata Ratnam, Director International Management Institute (IMI) Delhi, says, aSome banks have delayed the joining dates for MBA graduates. Usually students join in the months of July or August but this year it hasnat been so. Banks are waiting for the situation to improve.a Earlier this year, ICICI Bank (Indiaas largest private bank) had said that it would not announce any annual promotions and large bonuses this year. The bank had explained that the move was aimed at reducing costs in a less optimistic economic environment.
The media had also reported that Oracle and IBM have had to engage in cost-cutting exercises such as lower salary hikes and removal of employeesa fringe benefits respectively. aI do know of students who were placed in the software sector and have been asked to join later in the year than what is usually the case,a adds Professor Salwan of IIM Indore. He goes on to say, aMany new companies will be coming on B-school campuses. Cost-cutting will cause more outsourcing and hence consultants will be well off. Further, a lot of students, particularly engineers, who had opted for finance are now shifting to operations. Reason being that going by current trends, corporate finance will be the important sector in finance. Work in this sector requires much more training and a thorough knowledge of finance (thereby implying that engineers will not have it easy to shift to finance and would have to look at alternatives such as operations). Of course the importance of corporate finance is subject to the involvement of Foreign Institutional Investors and may change in the next few months.a
aIn the last 15-20 years, the focus has been more on IT. It is high time we started looking beyond this technology. We need to look at promoting innovations and ownership of intellectual properties,a Infosys Technologies CEO and MD K Gopalakrishnan had commented at a press conference held earlier this month.
aCompanies and sectors go through a cycle. The situation in the IT sector will result in old sectors such as manufacturing, civil and cement coming to the fore. The playing field will be level now that the salary offered by IT firms will no longer be a huge attraction. Students will now be required to prove themselves at the time of placements, have a clear vision as regards their career and not simply jump into companies without thinking!a explains Mr CS Somu, Chairman a Admissions at SDM-IMD, Mysore.