invest time in B-schools during Slowdown

MUMBAI: More and more graduates seem to think that it could be the best time to pursue a B-school degree that could be handy in a tight job market. Applications for various full and part-time management courses rose by more than 20% this year at most business schools. Also, there was a renewed interest for more than 60% of the part-time programmes and nearly 70% of executive programmes.

According to Sujata Khanna, founder of Career Launcher, said, “The reason for a surge in applicants is the factor of economic slowdown as one perceives the job market will be tight for the next two years and hence, people want to invest the time in education.”

Something similar happened in 2001 after the dotcom bust, when the number of applications had touched a peak in B-schools. “A year after Y2K, we saw a 40-45% increase in students, who wanted to prepare for various B-schools entrance examinations,” said Ms Khanna.

Jamanalal Bajaj Institute, a leading business school in Mumbai, has recorded a 25% jump in applicants for the MH-CET entrance test scheduled in February. The institute takes 120 students for the post-graduate degree.

Students feel that it makes sense to be armed with an MBA or a post-graduate degree in such times, so that when the market rebounds they would be better placed than others, said an official with the Jamnalal Bajaj Institute of Management.

Narsee Monjee Institute of Management Studies (NMIMS), which conducts the NMAT entrance test for its full-time MBA courses sometime December-end, has received approximately 46,000 applications for its 360 seats. It’s a 21% rise over last year. “If you’re an admissions officer, it’s a great news, because it means you're going to have a lot of decision-making power and have a richer pool of applicants,” said VK Sreedhar, registrar of NMISMS.

Another leading business school in Mumbai, Wellingkar Institute of Management, has also seen a rise of 12% in online applications this year as against last year for its 3-year part-time masters degree. Similarly, applications for Symbiosis National Aptitude Test (SNAP), which is going to be held on December 21, has shown a significant rise.

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MBA's appering for civil exam

JAIPUR: Neeraj Mathur, a final year finance student had purchased geography and general knowledge books last week. After, he failed to grab a decent job in a campus placement session held in his college in a midst of an economic slowdown. "Now I have decided to appear for civil service exam. Its no lesser then a suicide to wait for a job in a present scenario," said disappointed Mathur.

Like, Mathur hundreds of MBA graduates studying in city B-schools are disappointed by the lukewarm response from the corporate due to recession. Many of them have given hopes of getting a lucrative job. Now they are eyeing on the competitive exams like IAS, Bank PO and other government jobs.

Another MBA student Trilok Khandelwal, from Purnima College is busy revising his commerce books to clear the fundamentals of accountancy before he appear for Bank Po exam in the coming months. "I have taken a loan for my MBA programme. The instalments would commence from April next year. The worry is if I failed to get a job by them who would pay the instalments" added Trilok.

The students are left with less options. Either they can wait for the recovery of market or they could grab a job which ever is available, suggested many management schools to their students. Rajesh Kathori, director Podar Management College agress that "Though the market condition is not favourable at present. There are jobs available only for the competent ones"

This year sudden spurt in students appearing for the Civil service and other competitive exams due to the implementation of Sixth pay commission. It has attracted many students from management and science background to appear for the exam. "Government sector jobs have become very promising with the implementation of commission. Now, the salary of a MBA graduate is present scenario is much lesser then a government scribe," Mahesh Vardhman.

Students also opined that uncertainty in private sector is also a reason that over the years working executives left their jobs for government sector.

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Slowdown affects placements at ISB

The simultaneous slowdown in the US and Asian economies is going to affect the placements at the Indian School of Business (ISB). Information technology and information technology-enabled services (IT, ITES) firms, finance and real estate companies are especially not expected to recruit large numbers this year.

These sectors combined made 280 job offers out of the total 657 made for the Class of 2008, which had 421 students. The Class of 2009 has 440 students.

ISB dean M Rammohan Rao said: “We do not expect the companies to recruit in large numbers, as they did last year. But that will not mean that the students will go job-less. We are inviting more companies to the campus this year for campus recruitment.”

The institute is asking its students to set realistic salary targets. Last year, 230 companies participated in the placement drive. The average cost-to company (CTC) package for an international offer stood at $ 144,812. For a domestic offer, it was Rs 19 lakh per annum. The financial sector made 95 offers last year, IT and ITeS sectors made 148 offers and real estate made 37 offers.

The dean added these sectors are in turmoil now and this year might see a spurt in offers from telecom, pharma and health sector companies, which are growing at a healthy rate. Airtel, the largest private cellular operator, has assured a campus visit during the placement season. “It is not just Airtel, but other cellular operators will also visit the campus,” Rao said at a strategic seminar held last week.

The IT and telecom sectors have been losing their position to other sectors in the last three years. For instance, if 56 per cent of the total offers made to Class of 2006 were from IT and telecom companies, it was 50 per cent for Class of 2007 and dropped to 36 per cent for Class of 2008. The trend is same with financial services. The number of offers from the sector fell to 14 per cent of the total offers made for the Class of 2008 from 17 per cent for Class of 2007. Both sectors peaked respectively for the Class of 2004.

Companies from real estate, which boomed through the years 2006-07, made six per cent of the total offers for the Class of 2007 and six per cent for Class of 2008. During the last placement season, 50 per cent of the students changed both function and the industry, 21 per cent changed the function and 10 per cent moved to the new industry. This year, there could be a shift in industry segment.

Though ISB has been promoting entrepreneurship, this year it further decided to place some students of Class 2009 in the start-up companies set up by the ISB alumni. “It would be easy for the start-ups to find people who would align with their thinking and business vision. Also, the students, apart from finding a job for themselves, would have the opportunity to learn from their peers,” said deputy dean Ajit Rangnekar.

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B-schools feel the placement pinch

'We have been asked to take a practical approach and not look only at dream jobs'— Student from Institute for Technology and Management.

Saurabh Gupta, an engineering student from Thane, Mumbai, got himself a job at an IT company at a monthly salary of Rs 7,000. Had he graduated last year, Gupta would have been drawing around Rs 25,000 a month.

All the same, Gupta is not complaining. Many of his batch-mates are still looking for jobs and some are even settling for salaries as low as Rs 5,000 a month.

“I decided it was better to take this job and gain some experience rather than be jobless," said Gupta. He paid Rs 2 lakh for a three-year Master’s degree in computer engineering.

Out of 60 students, Gupta's institute has been able to place only eight so far. Last year, half the batch had found jobs by this time.

The situation at various second-run management and engineering institutes is no different, courtesy the slowdown that has impacted even their better-known counterparts like the Indian Institutes of Management (IIMs) and Indian Institutes of Technology (IITs).

In fact, average salaries for final placements at some second-rung B-schools are expected to fall as much as 35 per cent with some schools finding it tough to achieve a 100 per cent placement.

For instance, at SIES College of Management Studies (SIESCOM), Navi Mumbai, the average annual salary has dropped almost 33 per cent from Rs 6 lakh last year to Rs 4 lakh so far. The highest salary last year was Rs 12.5 lakh; this year, the institute expects it to peak at Rs 8-10 lakh.

The lowest salary has dropped 50 per cent from Rs 4 lakh to Rs 2 lakh this year.

"With the tier-I B-schools also approaching other companies beside their regular recruiters, many companies have withdrawn from the campuses. This is affecting placements at tier-II B-schools," said Jharna Lulla, placement manager, SIESCOM.

Another B-school, the Institute for Technology and Management (ITM), has seen a 30 per cent drop in its highest salary from Rs 10 lakh last year to Rs 7 lakh this year.

The lowest salary was Rs 3.5 lakh, and the institute has decided not to allow any company on the campus that offers less than this. ITM thinks it will manage 80 per cent placements this year.

"Companies are taking advantage of the financial meltdown and quoting lower salaries. We have asked students to be patient because the situation might improve in the next few months,” said Arun Saxena, placements chairperson, ITM.

For its 2007-08-batch of 360 students, ITM had placed around 90 per cent of the students by January 2008. This year, the institute so far has been able to place only 30 per cent of the students.

"Students who wanted placements in the financial sector are going for sales and marketing jobs. We have been asked to take a practical approach and not look only at dream jobs," said a student from ITM who requested anonymity.

At another engineering institute, only six companies have visited the campus so far against 20 companies last year. The institute says software companies have declined to come for placements this time.

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research is key for excellence in B-schools

Foreign educational institutions are bound to be allowed to come in to establish institutions either on their own or as joint ventures, so the competition will intensify

The report of the committee to review the functioning of the Indian Institutes of Management (IIMs) which was submitted to the Union ministry of human resource development (HRD), has been facing criticism within the IIMs since October. One of the biggest criticism was that the panel’s recommendations interfere with the autonomy of the IIMs. The panel in turn finds the B-schools’ management development programmes eroding the quality of their teaching and research. The ministry has now invited public comments on the recommendations.

Former Maruti Udyog Ltd. chairman R.C. Bhargava, who headed the panel, speaks about IIMs‘ autonomy, faculty MDPs and of dealing with intensifying competition from private business schools in an interview with Mint.

Excerpts:

The IIMs have turned out to be leaders in business education in India till now and they attract the brightest of students, both boys and girls. At the end of two-year post graduate programme, they are very much in demand, both inside and outside India. That’s the measure of the quality of education at the IIMs.

What we felt as a committee is that now they face a challenge from private investment in business education. It has been growing rapidly and will continue to grow because everyone has seen there is a big gap between demand and supply of good business education in this country—for 1,800 odd seats at the IIMs, about 2.5 lakh candidates take the exam every year. People invest where they see demand.

Foreign educational institutions are bound to be allowed to come in to establish institutions either on their own or as joint ventures so the competition will intensify. There is already some competition from private business schools but IIMs are still way ahead.

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