Big churn of B-school grads, not enough talent: report

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A study says only 132 B-schools out of 1,257 produce quality entry-level human assets; and the 20,000 they churn out aren’t enough to meet India Inc.’s requirement of 128,000 executives.

New Delhi: Marketing guru Jack Trout calls it the tyranny of choice. You enter a supermarket and have tens of thousands of products stacked on hundreds of shelves staring down at you, vying for a piece of your mind space. So much to choose from that you don’t know what to buy.

Human resource managers face a similar sort of situation while recruiting for entry-level positions. A report by MeritTrac, a Bangalore-based skills assessment company says the thousands of MBAs churned out by the rapidly mushrooming B-schools often put recruiters in a dilemma, as the sheer numbers tend to cloud their ability to detect and pick up quality.

So if there is a demand-supply mismatch, it isn’t because of the abundance of human assets, but because of the lack of quality. Which, in simple words means that despite the numbers, it is supply that is inadequate.

The report says that even by conservative estimates, India Inc requires about 2,000 CEOs and 8,000 senior managers every year. And assuming a senior to middle manager ratio of 1:4 and a similar ratio for middle to junior managers, the gross requirement of fresh MBA recruits is 128,000.

And with the economy growing like never before, this figure can only go one way – up.

On the supply side, out of the 1,257 B-schools in the country, some 1,125 are rated below average and have to be excluded, while estimating the employable pool of MBAs for managerial roles. From the remaining 132 B-schools, some 20,000 candidates make it to the category of employable and industry- ready ones.

With such a demand-supply disparity and issues of attrition, skyrocketing salaries and a structurally deficient educational system, hiring and retaining quality managerial talent, becomes a Herculean task for the recruiter.

In such a scenario, the report says, recruiters need to screen out unemployable candidates at the very outset.

The MeritTrac report recommends a systematically designed and scientifically calibrated assessment process to ensure selection of the right man for the right job.

The report has found that companies that assess candidates both on job-skill requirement and general attributes such as verbal skills, quantitative abilities, mental application and group interaction are able to eliminate 77% of ineligible candidates at the very outset. In other words, for every 100 candidates that are tested, only 23% make it to the next round.
Against this, companies that focus only on job-based skills send 56 out of 100 candidates to the next level of assessment, making the next step twice as time consuming.

The study also demonstrates the lack of correlation between the number of B-School grads and employable talent. Delhi, with the maximum number of graduates — 12,900 out of 70,000 a year from six hubs – ranked third in terms of the number of recruitments. In contrast, Mumbai, with only 8,100 graduates, had the maximum number of recruits.
Kolkata, with 6,000 graduates, came next, and ahead of Delhi.

The other three hubs, Hyderabad, Bangalore and Chennai, fell short of expectations.
In terms of skills, Hyderabad candidates topped on articulation, followed by those Chennai and Mumbai/Pune respectively. Kolkata led the pack when it came to grammar. Mumbai/Pune pupils towered above the rest on assertiveness and confidence while Chennai lagged behind in them.