Three developments in the past few weeks are bringing back fears of the job market tanking again in the style of 2008-2009, making Indian b-schools consider the possibility of a rough placement season for the batch graduating in 2012.
The first is the fear of another recession in the US and the possibility that it might affect the businesses of India’s IT and consulting firms. Then there was the announcement by Prime Minister Manmohan Singh that the country’s growth might miss the government’s target for 2011-12. The third is a general air of negativity emanating out of the political turmoil in New Delhi.
Although there are no concrete signs from companies about freezes or even cutbacks in hiring, b-schools are starting to talk about what they might do in case the job market dips, and identify learnings from 2008-09 that may come in handy again.
“There are apprehensions that the IT and consulting companies which pick up students in large number here will cut back on hiring and that will have an impact. Usually most of our students get multiple offers during the placements. This time the multiple offers may not be there,” says Prof Prithwis Mukerjee, placements chairperson at the Vinod Gupta School of Management, Indian Institute of Technology, Kharagpur.
But he expects non-IT companies to fill up the deficit. “If the IT and consulting hiring reduces, we should be able to cut the slack using FMCG or operations companies which also come to hire here,” he adds.
Indian Institute of Management (IIM) Rohtak’s Director Prof P Rameshan feels that although the media has blown the fear of a double-dip recession out of proportion, it might have repercussions on the morale of the markets and lead companies to be overcautious, affecting hiring but not to a very large extent.
According to Director Prof MJ Xavier, students of the IIM Ranchi are not aiming to join the IT industry. But finance students might have to moderate their expectations.
“Many want to join banking and financial services. Those eyeing multinational banks could face some problems,” he says. The new IIMs have the pressure of demonstrating a solid placements record for their first graduates. Having small batches of upto 60 makes it easier.
“We will face no problems with getting students jobs in the FMCG sector. In any case, public sector undertakings from the local region would anyday be very happy to come and hire my graduates,” he adds.
Small batch sizes is the defence many older b-schools claim against a possible employment downturn.
“Although it’s too early to say whether jobs will really be affected, but in any case our batch sizes are too small for it to be too big a concern,” says XLRI School of Business and Human Resources, Jamshedpur’s placement chairperson Dr Rajiv Misra.
Prof Abbas Ali Gabula of Mumbai’s SP Jain Institute of Management and Research tells PaGaLGuY, “We have 180 students divided across four specializations. Even those who have taken the Information Management specialization are 45 in number which are not too hard to place even if the IT industry reduces hiring.”
“It is the b-schools with more than 400 students that would need to worry,” he adds.
Having lived a recession in the very recent past, b-schools worldwide have a fresh-in-memory visualisation of how a recession might play out.
Indian School of Business (ISB), Hyderabad’s Director of Career Advancement Services VK Menon says, “If you notice, the number of companies coming to campus never reduced when there was a recession. What instead happened was that instead of single companies recruiting 15 to 20 students at once, a larger pool of companies recruited two, three or four students each.”
Speaking about the impact of IT recruiting on ISB he tells PaGaLGuY, “IT companies only hire for consulting or business development roles at ISB regardless of a recession because during a downturn they are looking even harder to generate new business. It is the program management or delivery related roles which take a hit and are usually offered to b-schools lower in the spectrum.”
He along with IIM Ahmedabad’s placement chairperson Prof Saral Mukherjee feel that students too have self-moderated their expectations after the 2008 recession and enter placements with a clearer idea of what they want.
Prof Mukherjee, who feels there is no reason to panic yet, says that MBA students are a lot maturer about their knowledge of the market than they were earlier.
XLRI’s Prof Misra says, “Everybody on campus reads newspapers and follows financial news regularly so they know what to expect.”
A clearer picture will only emerge in October, when most b-schools’ placement committees complete a round of visits to top companies and have the math in front of them.
“We would wait and watch until then,” says Prof Gabula.