IIM Placements, MBA and the Monsoon

Economic Times has a unique streak of boom and burst stories. It is sometimes euphoric and 'irrationally exuberant' and then a few days later filled up with all gloom and doom. I got a taste of it very recently when it ran two stories, in a matter of few days about the placements at IIMs across country. 

It ran stories about placements at IIMs. And how this year there were no signs of sluggishness in the recruitment, despite the recession. Here, here, here, here and here. It was extremely excited when Reliance came to recruit 2 executive assistants. 

And it did this story. How placements have been affected by the recession. Within the article, there was a hint that this is a result of over expansion. Larger batch sizes under depressed job market conditions have created problems. Indirectly, the reservation policies were blamed too.  

This kind of reporting hurts in two ways. It raises expectations outside (amongst both MBA aspirants and students) and hurts the overall brand as it is shown as having failed on earlier expectations. People enter with starry eyed dreams about the multi-million jobs, which crash as soon as they get into summer placements. It creates conditions where people believe that an IIM degree is a lottery ticket to that crore-plus salaries. Not everyone has the needed profile and neither the capacity. More fundamentally, there are hardly few jobs like those available in the world. In the Indian context, it becomes difficult to explain the exact nitty-gritty s behind those kinds of jobs.

Such kind of media reporting is no different from the pump-and-dump strategies. Pump up the brand, the name, the expectations and then later dump it. They are primarily catering to the eager middle class, ever ready to lap such stories of express rides into the upper class. A middle class fed on stories of salary packages and 100 % placements (two prominent criteria by which any college is judged these days). The unfortunate are those who left well paying jobs, not caring about the market conditions (since IIM placements were always painted as recession-proof and highly rewarding), and now have to leave the campuses with jobs offering lesser salary than what they had been earning earlier. The Facebook page of IIM confessions is full of such stories. 

In the last recession, soon after Lehman brothers collapsed, IIT Madras (I was a student there then) placements was directly affected by recession. The job offers just collapsed reflecting the slowdown as economy came down to 5-6% growth from 9% earlier. But it picked up back quickly as economy also rebounded to 8-9% levels. The primary drivers were good agricultural growth (5%) and huge jump in government spending to offset the slowdown in private and corporate spending (it grew by 13% compared to 3-4% earlier). But that led to high fiscal deficits and the inflationary conditions. After the 2011 crisis, the government was left with very few options to pump up the economy as fiscal deficit was already high. The growth is again down to 5% levels and this has impacted the company hirings. No expected expansion, no new projects/products and hence no new hands needed. 

I am hoping that this year we get a good monsoon (unlike the almost failed one last year). Good agricultural growth leads to expansion in demand (especially in FMCG which I want to target), which would hopefully translate into good job opportunities. The sentiments in stock markets should be bullish (unlike cautious optimism now or downright gloom a year earlier). Booming stock markets lead companies to new investments and new hirings (the relation is not this simple, but let us assume). These also depend upon the monsoon again. It is a pre-election year and the government would not want negative sentiments prior to elections. So it may do some pumping towards the year end. 

Overall, the more the things change the more they stay the same. This year a clutch of elite (supposedly), highly educated, suited-up, talented (again supposedly) MBA grads will be scouring the skies for a good monsoon alongside impoverished, illiterate, unsophisticated farmers across India. I will  definitely remember to join the poojas, yagnas, ceremonies for the various rain gods.

PS: Monsoon click by me. Taken in Khurdha district, Odisha.