Placements 2007 at top Indian B-schools took off from last year's placements at a much positive note as every cue since then has been much better than expected. Indian economy has gone into further over-drive with a target of sustained GDP growth rate of 9-10%, with India Story becoming more and more credible to the world over.
Nothing could define the overall sentiment more than the statement by International media, "If you are not in India, you are missing something."
But unfortunately, during all this positive note and excitement, Placements 2007 didn't turn out to be as extraordinary as expected. This year again, we had usual media headlines of IIM grads becoming Crorepatis or fresh students abandoning Investment Banking jobs at foreign locations for desi shores, and the now-routine stories about certain percentage going for entrepreneurship or social sector, showing an overall great year placements-wise, or as they say, another good season. However, Placements 2007 with all its eye-popping salaries, became significant for some other reasons as well where some IIMs decided not to release salary data, while some used company confidentiality clause to hide names while flaunting highest salary and median salary, and almost all of them gave figures which were hiding more than what they were revealing.
The Placements 2007 took a different twist when IIM Bangalore decided to take a leaf out of Mario Puzo's book and implemented 'Code of Silence', which was quickly followed by IIM Lucknow.
Over the last few years, placements at IIMs have been under increasing media stare and have become a kind of media circus where whole recruitment exercise shifted from being a simple recruitment exercise to a media attention-grabbing exercise, where each institute seems to be in a race to prove itself by way of placements data. In fact the hype went so high last year that some IIMB students dashed a letter to IIMB Director and expressed fear about their safety. The result was even more masala for media. So when IIMB decided to implement code of silence on salary details and other vital figures, it looked like the whole sheen has gone out of placements coverage if seen from media perspective. In fact the disappointed was so high that a leading newspaper carried a story with the title, "IIMs Veil Data, Bury the Placement Charm."
However, this is not the first time IIMs have barred media. Earlier in 2005, IIMs had decided to withdraw from B-school Rankings (Click here to read "IIMs Snub MBA Rankings"), which resulted in a huge hue and cry, and the impact was considered so fatal that Business Standard even wrote an editorial on it.
But the sudden decision to bar salary data was more than expected; as of late whole salary drama had gone out of control and was impacting overall balance in institutes themselves. The high salary figures, which were offered to less than 10% of the class, were impacting not only inflow of recruiters but also the overall moral of rest 90% of the class. Hence, to think that security issues are driving these salary bans is to stretch issues of law and order a bit too far.
In fact there are various reasons why salary details get banned and which, in our view, are steps in the right direction, as over a period of time these juicy stories are going to do more harm than any benefit.
Highest Salary Package and Very Low Median / Average Salary
Every year institutes have been talking of those big salaries (last year some civil servant got a package of INR 45 Lakhs at IIM Ahmedabad, and an ISB student bagged an offer of USD 233,000 p.a.), but they rarely mention lowest salary or highlight median salary. When the highest offer is of INR 45 Lakhs and median is just INR 9 Lakhs, one can safely assume that 60-70% of the class is below the average (interestingly, very few of the B-schools in India provide median salary details unlike their international counterparts), and hence, these high figures are causing more heart-burns, and are also creating myths, which have started to turn quite counter-productive.
Hype Impacting Reality
In every placement season, whatever number of corporate visit a campus, the worry of placement committee is not Day Zero but Day Five, as placing the tail-enders becomes a big task and nerve-wrecking exercise; and to have a good placement season, you need to have a good line-up of companies even on Day 3, 4 and 5. Further, salaries apart, job profiles are also very important which many of the mid-size companies are able to offer instead of high paying jobs. Unfortunately, given the high decibel publicity given to a crore figure salary, a lot many first-time potential recruiters are slowly becoming just potential only as they can not match the figures, which are being touted by the media, and hence, are opting out of whole process, thus, denying a lot many students a desired job profile with a fast growing mid-size company.
To put things in perspective, Indian PSUs have been able to recruit from IIMs this year, e.g., BPCL, a public sector oil major, was also a recruiter at IIM Bangalore. Given govt.-regulated pay scales and well-defined entry level for management trainees, no way the salary offered by BPCL including all perks can be beyond INR 4 Lakhs.
Statistics, Statistics & Statistics: Devil in Details
Placements 2007 is a bumper year or an average year or a disappointing year. If you try to figure that out from all reports and press releases, chances are that the picture will be as rosy as hopes of UPA govt. about poverty eradication by Budget 2007. The media is full with, "Jobs are raining at... India calling... Crorepati grads at IIMs," so it seems a bumper year. Well, we tend to disagree. As per CoolAvenues internal metrics, this year can be seen at best as an average year in a booming market. There were no great additions, and despite all talk and hoopla, not many venture funds and private equity players were present barring some instances, and the corporate list was a regular list, i.e., Mckinsey, E&Y, D&T, Bain & Co., HLL, ICICI, P&G, UTI, HPCL, and so on and so forth... So any thing great compared to last year??? Well nothing really.
Other unfortunate aspect of this statistics is calculation of key figures..