Salaries are down by 25%, international offers have dried up, and at some top business schools nearly half the graduates can't find jobs
By Alison Damast
Students at Indian business schools are having just as hard a time as their American counterparts landing jobs after graduation, and they are facing one of the most painful recruiting seasons in years, according to a new report.
The job placement figures this year at nearly a dozen ofIndia's top management schools—including four Indian Institute of Management campuses (IIMs)—are more dire than expected, according to the highlights of the 2009 MBA Placement Report, released on Apr. 22 by MBA Universe, an India-based Web site about business schools.
It's a sharp reversal from last spring, when Indian B-school students had what was their best recruiting season ever. This year the average salary across top tier B-schools is down 25%, wiping out the record 20%-to-22% salary gains students made last year.
A. Kumar, the site's editor, said the global financial crisis is having a serious impact on the morale of Indian students.
"Students who saw MBA admissions as the ticket to good jobs have started questioning the return on investment, perhaps for the first time in several decades," Kumar said in an e-mail.
The news comes at a time when many students from India are opting to study at business schools in their home country, rather than to go abroad to a U.S. or European school, as many have done in the past. Admissions officers at top U.S. B-schools reportapplications from Indians are down this year, with many worried about obtaining student loans and H1-B visas, as well as the strict hiring restrictions on any companies receiving federal bailout funds under the Troubled Assets Relief Program. Meanwhile, the growing reputation of top-tier Indian business schools like the IIMs is making them a viable option for Indians who otherwise might have chosen to shell out $100,000 or more for a brand-name U.S. degree.
PLACEMENT PROBLEMS
But Indian students opting to stay at home will face significant challenges ahead, especially when it comes to landing a job. At many business schools, career placement officers anticipate the hiring season will continue long after graduation, extending into the summer and perhaps beyond.
Even top-tier schools like the Indian School of Business in Hyderabad have extended their job placement season indefinitely because only 57% of students have found jobs, according to anApr. 2 report in the Business Standard, one of India's leading business newspapers. The school has not yet released its official placement numbers, according to the MBA Universe report. A spokeswoman from the Indian School of Business did not return several e-mails seeking comment about placement results.
Complicating matters, "the picture is dull" for students looking to land jobs outside of India, according to the report. The best international offer at any of the IIMs came from the Indian Institute of Management Calcutta, where the highest salary topped out at $86,785. At the Indian Institute of Management Ahmedabad, the highest international offer was $83,000, down from last year's peak of $280,000 to $360,000. Meanwhile, schools outside the top 20 are facing an even harder time placing students, Kumar said.
"The second- and third-tier schools will see a constant struggle until the economy revives," he said.
Abhishek Nagaraj, 22, a first-year student at IIM Calcutta who is interning at an investment bank in Mumbai, is spending his summer working as an intern at a financial firm. Among his classmates, there is "this perception that we are at the bottom right now," he said, referring to the economy.
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The graduating class of Indian School of Business (ISB), Hyderabad has not been fully placed and the procedure has been extended. “The ISB has set up a special task force with the support of our board members to continue to find the right opportunities and appropriate openings for its talented and experienced students,” said the school’s official statement.
Washington: As many as 1,00,000 Indians and an equal number of Chinese will return to their native countries in the next three to five years, a move that will greatly boost their economies and undermine technological innovation in America, a new US study warns.
The study on immigration by a team at Duke, Harvard and Berkeley universities led by Vivek Wadhwa, an Indian-American technology entrepreneur turned academic, says "America's loss is the world's gain".
There are no hard numbers available on how many have returned, but anecdotal evidence shows that this is in the tens of thousands, says Wadhwa, executive-in-residence for the Pratt School of Engineering at Duke University and fellow at the Labour and Worklife Programme at Harvard Law School.
"With the economic downturn, my guess is that we'll have over 1,00,000 Indians and as many Chinese return home over the next three-five years," said Wadhwa. " This flood of western educated and skilled talent will greatly boost the economies of India and China and strengthen their competitiveness.
"India is already becoming a global hub for R&D. This will allow it to branch into many new areas and will accelerate the trend," he said.
"The US has always had the luxury of being arrogant about immigration because it has been the strongest magnet for the world's best and brightest," but as the study shows "there are other strong magnets now".
"We are effectively exporting our economic stimulus. Policies like those which the US just enacted which prevents some banks from hiring foreign workers will have the opposite effect from what they intended - they will send jobs abroad and scare away top talent," Wadhwa said.
The study released on Monday Ewing Marion Kauffman Foundation, based in Kansas City, Montana, indicates placing limits on foreign workers in the US is not the answer to America's rising unemployment rate and may undermine efforts to spur technological innovation.
"A substantial number of highly skilled immigrants have started returning to their home countries in recent years, draining a key source of brain power and innovation," said vice president of Research and Policy at the Kauffman Foundation, Robert E Litan.
"We wanted to know what is encouraging this much-needed economic growth engine to leave our country, thereby sending entrepreneurship and economic stimulus to places like Bangalore and Beijing," he added.
The report builds on an earlier Kauffman Foundation report by Wadhwa documenting a queue of one million H-1B holders and their families anxiously awaiting longer-term work visas and growing frustrated with the immigration process.
Until recently, America has been the prime destination for the world's best and brightest immigrants.
"Immigrants have made tremendous personal sacrifices. They would leave behind relatives and friends and accept second-tier status in American society," said Wadhwa.
"Now countries like India and China are providing equal career opportunities and a better quality of life. So the most highly educated and skilled are often returning home," he added.
The two-year study covered 1,203 Indian and Chinese subjects who had studied or worked in the US for a year or more before returning home.
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As business models evolve, post-recession MBA jobs will, too, with employers looking for well-rounded types with strong leadership skills
By Eitan Ahimor
When trying to explain the regression that usually follows a chaotic event, Albert Einstein once said, "I know not with what weapons World War III will be fought, but World War IV will be fought with sticks and stones." While the MBA job market may not revert to "sticks and stones," its future is likely to be quite different from what came after the last recession in 2001.
There is no doubt that the current recession will also be followed by an increase in MBA recruitment, but the nature of the opportunities offered to freshly minted MBAs will change. In the period following the dot-com crisis, companies sought MBAs with special skills and knowledge of niche areas, such as structured finance and private equity, as they strove to extend their business and gain market share by offering their customers sophisticated products and services. This strategy resulted from the flourishing capital markets, available funding, stiff competition, and increased consumer demand. Both MBA students and business schools were quick to seize upon these new market needs as many students chose to specialize in things such as financial real estate, financial engineering, advanced securitization, structured finance, and other exotic courses. Many MBAs saw business school as a gateway to a niche area instead of the place to develop leadership and general management skills like corporate finance, marketing, and operations. In our current recession, however, this approach is bound to change.
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HYDERABAD: Professor M. Rammohan Rao, who presided over the controversial meeting of Satyam’s board of directors approving acquisition of Maytas Properties and Maytas Infra on December 16, stepped down on Wednesday as Dean of the Indian School of Business (ISB).
Explaining the reasons for his decision, he said the shocking revelations by Satyam Chairman B. Ramalinga Raju, of which he had no prior knowledge, meant that the controversy surrounding the Information Technology major was far from over.
“My continued concern and preoccupation with the evolving situation are impacting my role as Dean of ISB. Given that my term with the ISB anyway ends in a few months, I think that this is an appropriate time for me to step down,” he said.
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