B-School placements: E-Comm & Start-ups play cautious
Urvashi Dalal, 22 Jul 2016
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It came as a bombshell for IIM Ahmedabad when Flipkart, India’s top online retailer, deferred the joining dates for its new graduates by seven months. Though Flipkart offered a compensation of Rs 1.5 lakh each to the recruits, it was a bitter pill for IIM-A to swallow. In the public war of words that followed, IIM-A said the “students feel cheated out of multiple opportunities”. IIM-A Placement Committee in its letter to Flipkart said, “Talented students fresh out of campus, on the eve of starting successful careers, feel cheated out of multiple opportunities that the campus had to offer, through no fault of their own, just because they chose Flipkart.” However, Flipkart justified the move, saying it was part of its organisational restructuring and human resources rationalization.

Treading cautiously

What looked initially to be a singular case in this placement season gradually emerged as part of a larger crisis, where many e-commerce and start-up recruiters delayed on-boarding their campus recruits. Despite broad placement trends and average packages at top B-Schools reflecting positive industry sentiments backed by high GDP growth predictions, e-commerce and start-ups took measured steps as their focus shifted from rapid expansion to cost-cutting and profit generation amid shrinking funding prospects.

 

Flipkart isn’t alone 

In the next few weeks, it became evident that there was a downturn for the much- hyped MBA recruitment by promising start-ups and e-commerce players that dominated placements at top B-Schools over the last 3-4 years. With more B-Schools reporting deferred job offers and a few reporting withdrawals this season, placement worry engulfed many top MBA colleges.

 

Flipkart not only deferred job offers at IIM-A (18 graduates), but also at other top B-Schools including IIM-Bangalore (11 graduates), IIM Udaipur, FMS Delhi, and MDI Gurgaon. Flipkart wasn’t alone. Other start-ups like CarDekho and Hopscotch also deferred their offers to graduates from IIMs and other B-Schools. XLRI (Xavier Labour Relations Institute) also reported that Flipkart did not take their eight students on board.

 

Prof. Ganesh N Prabhu, Chairperson, Career Development Services of IIM Bangalore shared, “A few companies have informed our institute about the delay in joining dates of the recruited students. Hopscotch and CarDekho have delayed the process till September 2016 and Flipkart till December 2016.” He added that around 19 students were affected by the company’s decision, but the institute is on speaking terms with the company officials.

Birla Institute of Management Technology (BIMTECH) too witnessed a similar situation. “As far as BIMTECH is concerned, two students were affected this year,” said Prof. K. K. Krishnan, Chairperson, Centre for Corporate Relations, BIMTECH, referring to the decision by a start-up in retail space to defer job offers. IIT Madras also confirmed that food delivery start-up Roadrunnr had asked some students to report for work only in December. 

E-commerce recruitment trend

For the last three-four years, both B-Schools and e-commerce and start-ups have been sharing a win-win placement scenario. Start-ups would get a pool of young talents while B-Schools could claim their contribution to the fast-growing sector and showcase their placement profile. Of late, e-commerce start-ups bagged premium slots at B-Schools as they offered promising opportunities and roles to fresh graduates. This trend continued for the placement year 2014-16 also. According to IIM Calcutta final placement report 2016, over 20 percent of the offers were made by e-commerce and web-based start-ups like Flipkart. 

 

According to IIM Ahmedabad officials, the Internet and e-commerce space had recruiters including Amazon, Flipkart, which formed a large chunk in terms of the total number of recruiters. In the final placements at IIFT Delhi, the list of e-commerce recruiters included Flipkart, Amazon, ShopClues, CarDekho, Bluestone, and Play Games24x7 among other top players.

 

Still, the pace of e-commerce recruiters slowed down at B-Schools. Apart from IIM Calcutta, e-commerce did not feature as the top recruiting sector in a majority of top B-Schools. Prof. Prabhu said, “Even though there was a slight dip in e-commerce hiring, the consulting firms hired in larger numbers and helped accelerate the placements.”  Dr. Sonali Kohli Mehra, Deputy Chairperson- External Relations, SPJIMR Mumbai concurs, saying, “E-Commerce slowed down hiring in keeping with its consolidation phase. Consulting stepped up the hiring.”

 

The real shock came only in May-June when recruiters deferred their offers. This reflected the troubles brewing in e-commerce and start-up ecosystem for the last few months where many high-profile companies like Snapdeal and food ordering platform Zomato had to slash jobs. Many rating agencies have downgraded valuation of many firms including Flipkart even as funding scenario got tougher for Indian start-ups. What followed was the rationalization of human resources and restructuring at many start-ups. Growing concern on cash burn and investors’ anxiety over spends made them cautious on hiring.

 

How do B-Schools reflect on the ‘change’?

There was a mixed response to the crisis. While IIM-A and IITs criticized recruiters heavily for not keeping their words, some B-Schools chose to live with it, and a few others termed it an opportunity for top institutes to explore the potential of their graduates in off-campus recruitments.

 

In an e-mail addressed to Flipkart, IIM A wrote: “Future engagement of Flipkart with B-School campuses is bound to get affected as a relationship based on mistrust and lack of transparency can never be mutually beneficial.” It added that “With campus perception of recruiters trickling down from one batch to the next, this can significantly hurt the brand Flipkart on campus during subsequent rounds of campus hiring in the years to come.”

 

Meanwhile, the placement committees of IITs decided to bar such defaulters from their premium placement slot. This means that Flipkart and others that breached recruitment terms would no longer be allowed to sit among the first row of recruiters for the next season. Students were cautioned while entering their preference for start-up recruiters. Kaustubha Mohanty, convener of the IIT placement panel said that students are being educated about the risk of joining start-ups.

 

The day-one slot, a premium slot for recruiters in the placements across IITs and IIMs is generally reserved for the most reputed companies. The list usually includes top companies such as Google, Microsoft, Goldman Sachs, McKinsey & Company among others. Flipkart has been accommodated in the Day One slot across top B-Schools for the last four to five years. 

 

Thinking ahead

Many B-Schools, however, are not unduly worried. Dr. R. Gopal, Director, DY Patil Institute of Management, Pune said, “We have encountered such cases in the past. On an average, there are always one or two such companies every year. We have seen this happening in the last three-four years.”

Prof. R. GopalProf. R. Gopal,
Director,
DY Patil Institute of Management, Pune

 

We have encountered such cases in the past. On an average, there are always one or two such companies every year. We have seen this happening in the last three or four years.

Some B-Schools opine that rather than over-reacting to the situation, they must talk to recruiters and find out the best possible solution for the students and recruiters. “IIMB is facilitating the job search to the affected students. Those not interested in other job options are looking at the good experience from short-term internship opportunities during their long waiting period,” says Prof. Prabhu.

 

Dr. Uday Salunkhe, Group Director, WeSchool, Mumbai suggests that the recruiters must assign some projects to the affected students for the time being so as the rapport between the B-School and company remains unaffected. “It would be good if the company could also assign some useful projects to such affected students and pay a stipend. What is most important is that the relationship between the two institutions should be preserved,” he said.

Dr. Uday SalunkheDr. Uday Salunkhe,
Group Director,
WeSchool, Mumbai

It would be good if the company could also assign some useful projects to such affected students and pay a stipend. What is most important is that the relationship between the two institutions should be preserved.

Turning the crisis into an opportunity

Many top B-Schools suggest that this crisis has brought an opportunity for them to showcase their true potential and explore constructive engagement mechanism for their graduates. They feel that the crisis that has emerged at top B-Schools including IIMs is a litmus test for their processes and quality. They say that it is also a testing time for B-Schools like IIMs which are hugely funded with public money and government-supported infrastructure. “IIMs are heavily funded with public money. It is time now that they prove their worth in an open market,” says Dr. Atish Chattopadhyay, Director of IMT Ghaziabad. “If one is competent enough to get into a top B-School, his capability only stands to increase and a little bump in the placements must not be such a concern for such bright graduates,” Dr. Chattopadhyay sums up.

Dr. Atish ChattopadhyayDr. Atish Chattopadhyay,
Director,
IMT Ghaziabad

 

IIMs are heavily funded with public money. It is time now that they prove their worth in an open market. If one is competent enough to get into a top B-School, his capability only stands to increase and a little bump in the placements must not be a concern for such bright graduates.

Stay tuned to bshool.careers360.com for more B-School Placement stories

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