Recession or not, the world economy is definitely slowing down. And to make matters even worse we have food shortage and slower oil supplies pushing up the prices worldwide. In India, inflation touched a 42 week high for the week ending April 25th. Not very conducive for recruitment season, one would assume. US B school grads are already facing the heat of a slowing economy, According to an article published here, US B schools are seeing a downtrend in number of recruitments. Unlike Indian B Schools, US B Schools anyways do not boast 100% placement ( Fudging placement figures is a common practice in India) and with this trend god knows what will happen of them.
Coming back to home, The placement season here was more or less in sync with previous trends, a 20% increase in average placment figures was seen across most of the B Schools. The profiles offered were also better, All in all a better Placement season vis-a-vis previous years. Although, Indian MBA grads were able to thwart the US trend but the picture is not so rosy for the engineering students. Just like it happened in 2001, 2008 engineering recruits are being asked to wait for their final offer letters. In 2001, lot of companies went to the extent of canceling the placement offers altogether, a scenario which is even more likely this time also. I think, this is where we, the MBA wannabes, come into picture and this is where the access of impact becomes all the more imperative.
The impact, in my view will be on three levels,
a. MBA Class of 2009 : For the people passing out in 2009, getting placements wont be easy. Obviously, the 'A+ List' wont be affected but A list will surely feel the pinch, followed by Tier II colleges who will bear the brunt even more and the effect will be cascading. Companies have already started to pull down their future recruitment programme, which would mean fewer opportunities, fewer multiple offers and for some, less than magical 100% placement. According to a survey done after 1982 recession, each percentage point in unemployment index leads to erosion of 7~8% of starting wages. US has managed to avoid recession this quarter, which means it has managed to delay the inevitable which implies that it is far more likely now that MBA class of 2009 will feel the pressure.
b. MBA Class of 2010 : Thanks to Mr. Arjun Singh and Supreme court's judgment of reserving 50.5% seats for general candidates, we still do not know the texture of class of 2010. But picture will be clear sooner than later. Since, many of us are still making up our mind, it becomes all the more important for us to keep these things in mind before we take a final call. Globalisation has ensured that a US recession is not translated into world wide recession ( in one is to one ratio atleast). The Dragon and the elephant are shielding Asia from recession and in all likelihood will continue to do so. But at the same time, two countries are not entirely decoupled which means we will be hit but we will recover soon. We have two years before we are again thrown into the rate race, and all indicators point towards a bearish market for next few years. The summers will be affected but hopefully Final placements will be a trendsetter.
c. MBA aspirant 2008 - 2011 : This breed will be the least affected in terms of placements and exposure but they are going to have a real tough competition this year. There are a whole lot of engineers and other grads who will have their placements delayed this year. People who will have nothing to do during this wait period. MBA has almost become extension of engineering degree and the trend beating placements this year take the MBA illusion forward. In times when they are sitting at home waiting for offer letters, they would be reading about how some XYZ from some ABC got a fat pay cheque. This breed will come hard at MBA exams this year. if you are an aspirant, Beware!!
Coming back to home, The placement season here was more or less in sync with previous trends, a 20% increase in average placment figures was seen across most of the B Schools. The profiles offered were also better, All in all a better Placement season vis-a-vis previous years. Although, Indian MBA grads were able to thwart the US trend but the picture is not so rosy for the engineering students. Just like it happened in 2001, 2008 engineering recruits are being asked to wait for their final offer letters. In 2001, lot of companies went to the extent of canceling the placement offers altogether, a scenario which is even more likely this time also. I think, this is where we, the MBA wannabes, come into picture and this is where the access of impact becomes all the more imperative.
The impact, in my view will be on three levels,
a. MBA Class of 2009 : For the people passing out in 2009, getting placements wont be easy. Obviously, the 'A+ List' wont be affected but A list will surely feel the pinch, followed by Tier II colleges who will bear the brunt even more and the effect will be cascading. Companies have already started to pull down their future recruitment programme, which would mean fewer opportunities, fewer multiple offers and for some, less than magical 100% placement. According to a survey done after 1982 recession, each percentage point in unemployment index leads to erosion of 7~8% of starting wages. US has managed to avoid recession this quarter, which means it has managed to delay the inevitable which implies that it is far more likely now that MBA class of 2009 will feel the pressure.
b. MBA Class of 2010 : Thanks to Mr. Arjun Singh and Supreme court's judgment of reserving 50.5% seats for general candidates, we still do not know the texture of class of 2010. But picture will be clear sooner than later. Since, many of us are still making up our mind, it becomes all the more important for us to keep these things in mind before we take a final call. Globalisation has ensured that a US recession is not translated into world wide recession ( in one is to one ratio atleast). The Dragon and the elephant are shielding Asia from recession and in all likelihood will continue to do so. But at the same time, two countries are not entirely decoupled which means we will be hit but we will recover soon. We have two years before we are again thrown into the rate race, and all indicators point towards a bearish market for next few years. The summers will be affected but hopefully Final placements will be a trendsetter.
c. MBA aspirant 2008 - 2011 : This breed will be the least affected in terms of placements and exposure but they are going to have a real tough competition this year. There are a whole lot of engineers and other grads who will have their placements delayed this year. People who will have nothing to do during this wait period. MBA has almost become extension of engineering degree and the trend beating placements this year take the MBA illusion forward. In times when they are sitting at home waiting for offer letters, they would be reading about how some XYZ from some ABC got a fat pay cheque. This breed will come hard at MBA exams this year. if you are an aspirant, Beware!!
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