The Indian Institutes of Management, which sit at the top of the business education totem pole, can normally rely on the power of the IIM brand to land their wards well-paying jobs year after year. But as this year's placement season looms, some are being forced to do the unthinkable - seek outside help - in the process, painting a sorry picture of the economy where slowing growth is forcing companies to cut back on hiring.
IIM-Indore, a relatively new member of the IIM fraternity that was set up in 1996, plans to partner with some placement firms to make sure that all 450 students in the current batch receive offers. The institute is in talks with around five agencies.
"We are trying to help our students get good placements," said N Ravichandran, director of IIM-Indore. "At this point, we have to keep the names of these agencies confidential," he said.
Other IIMs may go down the same path. Sunil Goel, director at Global Hunt India Pvt Ltd, said apart from IIM-Indore, Calcutta and Lucknow had also contacted the firm. Tier-II and III B-Schools are also likely to feel the slowdown pinch.
"We are in discussions with some of the institutes, but nothing is finalised as yet. We may help them with some form of consulting if the need be," Goel said. But both the older IIMs - Calcutta was set up in 1961 and Lucknow in 1984 - denied they had sought help from external agencies for placements.
Final placements at Indore may begin in February, with about 60 companies. The 2011 batch had an average salary of about 14 lakh in 2011, up 27% on the previous year's level of 11 lakh.
Average Salary may Get Hit
IIM-Indore had not used external agencies in 2009, the toughest year in recent memory as it followed the financial crisis of 2008. The batch size that year was 180 and the institute was able to place all. This year the external agencies will carry on a parallel placement process, once the institute receives a definite number of offers by itself, a placement coordinator said in a mail to ET.
Officials say that given the large batch size - 450 is the biggest among all the IIMs - the average salary is likely to take a hit. This is because as the placement season draws to an end, the quality of job offers, both in terms of salaries and job profiles, gets affected. "These firms will help us in bridging the gap for the last 100-150 students," said a senior official from the institute's placement committee, who did not wish to be named.
The thinking is that these agencies will function independently of the IIM Indore placement cell and will provide opportunities to the participants beyond the existing pool of recruiters. The IIMs were set up at the initiative of India's first Prime Minister, Jawaharlal Nehru, to train managers that were to run factories and businesses of a fast-industrialising nation. The ones at Ahmedabad and Calcutta were set up in 1961, while the business schools at Bangalore and Lucknow came up in 1973 and 1984, respectively. Ahmedabad, Calcutta and Bangalore, the big three, sit at the apex of Indian business school rankings, with Ahmedabad traditionally occupying pole position.
Lucknow, Indore and Kozhikode -- the last-named also opened its doors to students in 1996 -- invariably feature in the top 15. Whether the firms will get paid for their services to IIM-Indore is not clear. "We have not yet decided on how the institute will compensate these firms or what will be the payment structure. But we will choose only those that bring the best job profiles from their clients. We will also give them a threshold figure for salary packages depending on which sector the job offer is coming from," the official pointed out.
The lateral placement process (meant for candidates with work experience) has already begun at campus and the institute has been able to place more than 100 students so far. The process is likely to conclude in another week or so. Saral Mukherjee, chairperson of the placement committee at IIM-A, said the situation is not as bad as it was in 2009.
"There was panic in 2009, but things are not as bad this year. In 2009, many companies had put a hiring freeze, but this year, we have not seen even one recruiter who said it is not hiring. There could be some firms hiring lesser number of people, but the quality of jobs has not gone down as yet. We shall get a clearer picture during the final process."
The idea of engaging any external agency for placements did not seem very prudent to him. "When the institute and recruiters form a partnership, the engagements are on a much higher level. There is a constant dialogue between the two parties. Thoughts and expertise are shared on a regular basis. The relationship goes much beyond recruitment alone. External firms can not bring that on the table. They could be useful only in a few cases, for instance, tapping a new geographical location."
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