Over the last month, B-schoolers have received seemingly contradictory news. Some articles bemoan the ‘crisis’ facing them, others talk up expected placements. This is the season when candidates start shortlisting B-schools to apply to, and companies start the process of recruitment of students. So are B-schools really doing badly? Is a B-school degree still relevant? What is the reality? How to sift reliably good news from the bad? The depressing view on B-schools was presented in an ASSOCHAM report that talks about B-schools closing down and difficulties students face in finding placement. It suggests a dual cause for this. Issues on the demand side, with economic slowdown and consequent reduction in hiring; and supply side issues like oversupply of management graduates, and inadequacies in the education of these graduates.
An ET article says placements in top B-schools are likely to be good. Pre-placement offers are very strong this year, and the economy is looking up. I believe the report refers primarily to 2013 figures. The mood is more upbeat this year; placements should be better too. And Business Standard, again quoting ASSOCHAM, said 2013 had a capacity of 4,88,000 seats, and many B-schools closed. The reality is, there are too many seats, and too many graduates chasing too few jobs. All this is the inevitable downside of a boom. B-schools came to be seen as a “good business”, and many were set up with basic infrastructure, inadequate teaching facilities and little industry linkage. Such institutes only deliver the MBA “tag”. Recruiters do not hire a “tag”, but a potential manager. They have a “noise” problem—too many graduates, too many institutes, and of such uneven calibre that it is impossible to grant a degree any sort of face-value, so to speak. They naturally endeavour to reduce noise—grading institutes, offering different job profiles and starting salaries, and staying with familiar institutes.
So what do recruiters look for? The ‘dream recruit’ is one who is productive immediately. This implies a person who fits in the work and social environments, is able to lead as well as follow, works well in groups, has excellent communication, leadership and analytical skills, is knowledgeable and neither arrogant nor subservient. He/she should have a strong grasp of theory, be able to reason, and be able to use it in different situations! Such paragons are rare, but those who meet many of these parameters tend to do well. One issue cited often is students having high analytical skills, but poor soft and decision-making skills, even if they come from top institutes.
Recruiters we spoke to have a broad idea of what a good B-school is. It’s one where: a) the infrastructure is good, and the entry screening is strong—so students are bright; b) there is diversity—social/geographic, of gender and entry streams—to ensure an easier “fit” across domains, and a healthy ability to handle “situations”; c) a strong faculty helps build theoretical understanding into a practical orientation; d) there is a strong exposure to industry; e) course structures are relevant to industry; f) a large proportion of students already have work experience as they “are mature, easier to integrate”, and relate better to situations and people; g) offer “stable” recruits—that is, those who don’t “job hop”. MBAs are said to “be stable only in their third job”.
Recruiters are showing an increasing proclivity towards graduates of one-year courses, who tend to have worked before. Professors too say theory is easier for them, as they can relate it to real-life work experience. Recruiters judge value on what students deliver vis-a-vis starting salaries and the stability of recruits. High salary and low stability is the ultimate destroyer of value. Witness the communications industry, which now hires undergraduates from good colleges, and not MBAs who need “training for industry fit and are unstable to boot”. Investing in graduates provides better roi, and may ensure greater stability.
Fact is, industry needs a “plug and play” creature. Institutes need to focus on orienting their courses so students learn to handle real situations, improve EQ and soft skills and “finish”, besides giving students a theoretical framework. Industry is prepared to help in this; it’s an investment in “relevance”.
A.K. Balaji Prasad, Market researcher
(Balaji is MD, Drshti Strategic Research Services)