Crash of i-banks, global crisis delay recruitment season
MUMBAI: That the global meltdown triggered by the collapse of top investment banks would have a direct impact on business school placements was predicted by recruitment experts a long time ago. Now, this prediction seems to be coming true.
September-October is the time when the country’s premier management institutes, the Indian Institutes of Management (IIMs), release figures on the pre-placement offers (PPOs) made to their students. The second week of October has ended and yet, the IIMs have maintained silence over their PPO figures.
Pre-placement offers are those that companies make to second-year management students depending on their performance during summer internships. At the IIMs, PPOs are made somewhere around September, six months before the final placements that happen in March. Last year, towards the last week of September, the PPO numbers had peaked at the IIMs, with IIM Ahmedabad (IIM-A) and IIM Bangalore (IIM-B) getting over 70 and 79 such offers, respectively.
At IIM Lucknow last year, five students received PPOs with an average salary of Rs 1 crore per annum from top investment banks.
After the bloodbath on Wall Street triggered by the US subprime crisis, the scene has changed. We’re well into the middle of October but there has been no official announcement from any of the six IIMs on their pre-placement season. No consolidated figures have been released over the number of PPOs so far. When contacted, the only response that spokespersons of these institutes have to offer is that pre-placements are on and “we will release our official numbers in a few days”.
But recruitment consultants paint a pretty bleak picture for the hiring season at the institutes. Sandeep Chaudhary, business leader (consulting) at human resources firm Hewitt India, said, “There won’t be any crore-plus salaries being offered anymore.”
Rajeev Mehrotra, the country manager of HR solutions company Kelly Services India, added that the offers this time are likely to decline by 8-12%.
The sentiments are not unfounded. Investment banks have been top recruiters at
B-schools and now, they themselves are struggling to stay afloat amid the economic crisis that’s unfolding globally. Lehman Brothers became the first casualty and fears of other following are looming large.
Last year, about 21% of the total offers made during the final placement in March at IIM-B came from investment banks. At IIM-A, the figure was 10.98% of the total offers.
The delay in the PPOs this time reflects the changing metrics due to the global turmoil. However, the mood at the institutes is still optimistic. A placement official at IIM-A said that though there is anxiety lacing the pre-placement season, firms from other sectors such as FMCG and consulting could fill the vacuum created by investment banks that have gone bust.
But there is no denying that the speed with which PPOs are generally made has decreased, and chances are that the situation will be remain the same during the time of final offers as well.
g_priyanka@dnaindia.net
