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OTHER STORIES RELATED TO COVER Price of being Jobless: $80,000

When Uday Singh made it to the Indian Institute of Technology, Roorkee, in 1998, it called for a lifetime of celebration. On graduating in electronics, Singh was looking forward to being wooed by top Indian and multinational companies with offers of six to seven-figure salaries and the assurance of a secure future. Four years on, celebration is the last thing on Singh’s mind. Not only is he without a job offer, much like his 105 batchmates but, worse, Singh is not sure whether a business management course at one of the hallowed Indian Institutes of Management—a natural academic progression for many iit graduates—will augment his employment prospects. For, the placement malaise is widespread, spanning engineering and business schools across the country: the class of 2002 is facing the toughest hiring environment since the early 1990s.

Average annual salary at IIM Ahmedabad slipped from Rs 6.7 lakh last year to Rs 5.9 lakh this year

Overseas job offers at IIM Bangalore dwindled from 63 to 20

Number of companies visiting IMT Ghaziabad fell from 120 to 60

Infotech placements at IIT Roorkee dipped from 400 to 200

The triple whammy of the three-year-old economic slowdown in India, the six-month-long recession in the US and the information technology meltdown is finally taking its toll on the campuses: jobs are fewer, salaries offered lower or stagnant, and recruitment practices stricter. The average salary offered at iim Ahmedabad—ranked among the top 10 business schools in the world by The Economist—fell from Rs 6.7 lakh last year to Rs 5.9 lakh this year. The Institute of Management Technology, Ghaziabad, which had wound up its campus placement in 16 hours last year, was forced to extend it to two months this year. The recruitment procedure itself has become more rigorous: psychometric tests are being conducted, and to cope with the furious downsizing candidates with multifunctional expertise are being preferred.

"With global downsizing you never know when you will lose your shirt." Rahul Saksena left a Rs 48 lakh annual offer from a Singapore trading firm to take up a Rs 5 lakh a year job with ICICI in India

Many institutes, such as iim Kolkata, aren’t disclosing the average salary their graduates were offered this year. Stated reason: “Average salaries tend to send confusing signals to potential students and recruiting firms.” Probable reason: Salaries don’t match expectations and last year’s high levels. Though many business schools and technology institutes have had more companies visiting the campuses than in previous years, that’s not necessarily a reason to gloat. It’s only a reflection of the fact that the absence of traditionally big recruiters has provided an opportunity to many smaller companies to recruit from the institutes they could never hire from before.

"I have received an offer, but so had 45 of my seniors last year. All their appointments were cancelled at the last minute." Yogesh Kulkarni from Mumbai’s Veermata Jijabai Institute of Technology is one of the 54 students snapped up by Infosys this year. But Kulkarni is not celebrating as yet.

Global consultancy majors like Arthur Andersen, PriceWaterhouseCoopers and Accenture did not even show up at iims, the traditional bastions of foreign recruiters. In fact, consultancy firms—the most sought after by graduates—have been virtually absent from the campuses. Investment banks, the other big employers of B-school graduates, have also slashed hiring this year. Engineering graduates are reeling under the impact of the cooling down of the infotech industry and shrinkage in overseas placements. Having maintained a trailblazing average annual growth of 50 per cent through most of the 1990s, sales of it industry are estimated to rise by just 15 per cent in 2001-2. From 80 it companies that visited iit Mumbai last year, the number dropped to 30; at iims, the number of infotech companies visiting the campus came down by 50 per cent. The bad news had begun trickling in last year itself with withdrawals and postponement of job offers—iit Roorkee saw as many as 150 Indian and global job offers being cancelled.

Such is the fear of insecurity that stability is scoring over relatively plush salary packages, and the once enticing overseas offers are being remorselessly rejected for safer Indian jobs. Rahul Saksena of the Faculty of Management Studies, Delhi, (fms) declined a $100,000 (Rs 48 lakh) annual salary job with a Singapore-based trading company for a “safer and stable” Rs 5 lakh annual salary job with ICICI.

Though it firms, along with finance and marketing majors, were still recruiting this year, a marked shift in the trend is beginning to emerge. As much in India as in the US, sectors like consultancy and it are beginning to make space for sectors like insurance, healthcare, pharmaceuticals, bio-sciences and it-enabled services. Though the numbers were not big enough to compensate for the loss of jobs in other sectors, it certainly helped. Says Shivee Sharma, an iim Bangalore graduate who landed a job with MetLife India Insurance: “It is an emerging sector with tremendous potential which is both exciting and challenging.”
Also born of the lull in placement mart are institutes like the Hyderabad-based International School for Business that are hoping to replicate the US B-school success stories of roping back working alumni. So while the iims grapple with a lacklustre clutch of job offers, the isb with its focus on middle management entry, has attracted over 100 offers for lateral entries, including at the country head level, this year. Other institutes like the imt have entered into a trendsetting tie-up with GE Capital. Under this customised management programme, GE employees will be able to acquire a three-year postgraduate diploma in business management even as they continue to work.

However, flagging corporate hiring has not diminished the lure of the MBA degree. Quite to the contrary, most business schools are witnessing a remarkable increase in the number of applicants. The reason is simple. Lay-offs and scarcity of jobs have both students and working professionals opting for further studies. The fms saw the number of applicants skyrocket from 15,000 last year to 27,000 this year, with the percentage of shortlisted candidates with job experience going up from 30 to 60 per cent. For engineering graduates, acquiring a higher degree is emerging as Hobson’s choice. Only 15 graduates opted for higher studies from iit Roorkee last year. This year’s tally is 70. While fresh graduates are tuning into changing times, students at the entry level are opting for different academic streams. Many schools report that this year’s applicants show a marked preference for courses in marketing.

The gloom on the campuses of business and engineering schools threatens to spread to other colleges, even those not offering professional courses. At a time when companies can pick up MBAs and engineers for the salary of regular graduates, especially from second-rung business and engineering institutes, the job prospects for plain graduates would dim too. Warns a placement consultant: “With the job market so tough, MBAs will eat into the employment opportunities for plain graduates. That will only escalate unemployment.”
Add idle hands and eager minds to the already long list of the country’s economic woes.

—with Uday Mahurkar and Stephen David