Lean season begins for job-seekers

As campus-hirings take a hit,the country’s bright new graduates learn about recession the hard way

JAYA BASU

As the economic slowdown is spreading its claws deeper and organisations are moving towards leaner structure, campus placements this season have taken a strong hit.

According to a leading consultancy firm Hewitt Associates which is actively involved in campus placements, the downturn is evident at two levels this year. Firstly, there are less multinational companies active in the market. Secondly, they have also reduced the required numbers from the campuses.

According to the industry sources multinational companies like Hindustan Lever (HLL), Procter & Gamble, Nestle, Glaxo Smithcline Beecham, Reckitt Benkiser all are taking lesser people from campuses this year. However, both HLL and Nestle refused to comment on the issue saying that the process is not yet over.

The sources also informed that major banks like Citibank and Standard Chartered who were picking up nearly 50 people out of four Indian Institute of Managements (IIMs) every year have made only 22-25 placement offers to IIMs this year.

Also, management students this year face a more rigorous and elaborate selection process this year. Companies are also looking for people with more cross-functional expertise. The focus is more on the selection process, with psychometric tests being used to a greater extent to get a perfect match of student profile with the job profile.

According to Ajay Pandit, placements advisor of Faculty of Management Studies (FMS), New Delhi which recently finished its placement having placed its 80 students within two days, placements this year strongly indicate the resurgence of the general manager than functional specialists with companies looking for people with more cross-functional exposure. Hewitt Associates’ campus placement co-ordinator Pushp Deep Gupta says that with MNCs making lesser offers this year, the Indian companies like Dr Reddy’s Labs, Tata Administrative Services (TAS) have emerged as the biggest beneficiaries who are rapidly going in for professional management.

Not only this, the Indian companies have also gone up in the slotting. In IIMs where earlier these were considered only on the fourth or fifth day with very few choices left, now due to the absence of MNCs, they are considered on the second or third day itself.

Among all sectors, placement in the information technology sector is hit most. According to the industry observers, most of the IT majors are staying away from campus recruitments. Though Infosys, TCS went to IIT, Mumbai but recruited less than half the number this year. In fact, Wipro, HCL Technologies, Satyam Computer Systems and Hughes Software were conspicuous by their absence at the ongoing placements. The downturn in IT sector is being considered the major cause with the September 11 attack making it even worse. As a result even US majors like Intel, Cisco, Nortel and Lucent with R&D and development centres in India have also stayed away. The September 11 effect has impacted the recruitment process of investment banks and consulting firms abroad because their clients are not spending much on buying consultancy and they wait and watch the situation every quarter. As a result, international consultancy majors like Accenture, Arthur Andersen, KPMG, PWC have also stayed away from the campuses. These firms didn’t go FMS at all this year.

But the emergence of new sectors like telecom, healthcare, pharmaceuticals, IT-enabled services has brought some cheers to the campuses. Dr Reddy’s which never went to B-school to hire talent earlier has shown interest this year. Also domestic pharma and FMCG giant Dabur, Ranbaxy and telecom major Bharti are reported to be active this year in campuses. The FMS placement report clearly mentions that emerging sectors like telecom, pharmaceuticals and insurance absorbed a much larger proportion of the batch compared to previous years.

Regarding salaries Pushp Deep says that they are expected to be stagnant this year around Rs 6.5 lakh per annum in major B-schools both for fast-moving consumer goods and banking sectors whereas every other it showed a growth. Also all the newly recruited executives will have to do without stock options, he added.

Moreover, this year there will be lesser opportunities for foreign placements. US firms like Goldman Sachs, Deutsche Bank, Morgan Stanley who used to come to IIIMs with foreign placements and dollar salaries too are expected to take fewer people from IIMs this year. IIM Ahmedabad that placed 64 (out of 180) people abroad last year is expected to place only 35 this year. In Mumbai B-schools the highest dollar salary recorded so far has fallen from last year’s $ 110,000 to $100,000. The $100,000 pledge was made by Singapore based Olam International at S.P. Jain. Olam made the highest foreign offer at $100,000 per annum in FMS as well.

Though some of the top B-schools like FMS and XLRI, Jamshedpur have managed to place all their students, IIMs where campus placements are yet to take place are reported to be less selective this year. And institutes with large batches or not so large standing have had a gruelling time. Says Pushp Deep that due to pressure on workforce most of the companies are extra cautious in terms of hiring and have dropped a list of target schools this year. Prof A.K. Biswas, chairman, (placements), IMT, Ghaziabad, where 80 per cent of the total 120 students have been placed, “with companies now becoming extremely selective, student expectations this year have to be more realistic”. Hence the students this year are advised to be more practical, not compromise on quality and be realistic as far as salaries are concerned. Last year’s placements in IMT were over in 3 days and some companies had to return empty-handed. But this year while the quality of companies has not been affected, but the quantity of offers that has been hit across all the sectors.