Employment

OTHER STORIES RELATED TO EMPLOYMENT Hard Times Ahead

Within a fortnight of taking charge as dean of Kellogg’s School of Management in July last year, Deepak Jain got reports of some of his students—on the threshold of top consulting jobs—being asked to defer their joining. While some employers postponed the offer up to September 2001, others deferred the joining till April or September of 2002.

The Guwahati-born Jain almost immediately swung into action. He dug out the well-connected alumni of Kellogg’s and requested them to come up with six to nine-month-long projects that would ensure the graduating students were productively employed while they waited out the deferment period. Jain followed this up with roadshows all over the US and in critical foreign markets where he held round tables with recruiters. “I was simply overwhelmed at the response. The number of projects on offer were much more than what were actually required,” says Jain.

DEGREE OF DISTRESS: Indian graduates are among job hunters in New York City

While the dean managed a positive outcome from dire circumstances, his initial fears were not unfounded. Summer interns for 2002 were finding fewer options as the shadows of recession grew longer. Normally, companies return to campuses in January each year to conclude their recruitment season for summer interns. Among the top business schools like Wharton, Kellogg, Harvard, Stanford and Columbia, this is a tame affair as most students have already clinched their slots in the first round of interviews in October-November. This year, however, with most companies failing to make their offers in the first round of interviews in November, the later rounds were virtual crowd-pullers.

"In the new scenario, we now have to hunt for jobs in areas other than investment banking and consulting." Rohit menezes, MBA graduate

If bagging internships in a recession year has proved difficult, it is worse for those graduating in a market which was tentatively recovering from the dotcom collapse, only to plunge into the throes of a recession. Not only did the luxury of job options vanish overnight, graduates found it difficult to come by job offers. As the Wharton Journal candidly put it: “In case you haven’t heard, the party is definitely over ... the economy is slowing, most companies are hiring cautiously, and Wharton mbas are standing face-to-face with a recruiting season that grows darker by the day.”

The situation is worse for international students. Having forked out $70-80,000 for a good mba course, they have the added disadvantage of finding an employer who is willing to justify to the Immigration and Naturalisation Service (INS) its demand for an H-1B work visa. At 54,000 between October and December last year, H1 visa applications with the ins were down by 58 per cent compared to the corresponding previous period. A point to ponder for Indian students who account for up to 10 per cent of the graduating business school students in the US. At Wharton, about 80 Indians would be a part of the 800-strong class that will be graduating in May this year. Their fate has been mixed, though most students managed to make good breaks. Unlike earlier, however, they had to choose from fewer—in some cases, only one—options.

With top-ranked institutions struggling, events have turned out even worse for the second- and third-tier business colleges, typically not having the cushion of a high-powered alumni network. “There are a lot of internationals here. And they are constantly griping about the market. Some of them have been turned away by companies who are not willing to look at anyone without a green card,” says a senior professor at Baruch College in the University of New York.

A high performer 2001 graduate from the Chicago School of Business who landed a plum job in consultancy recalls wistfully that the market has undergone a tremendous transformation. “I remember that companies courted us through the year. The floor for us was $600,000 for the first three years.”

A mere pipedream today as graduates contend with a tough job market. Traditionally, 70 per cent of the graduates from business schools opt for jobs either in investment banking or consulting. In a regular—read non-consulting—corporate entity, a fresh graduate runs the risk of falling into a rut and is rarely given the opportunity to play a strategic role. Consultancy is full of opportunity and equips the graduate for big breaks in about 3-4 years. This option narrowed considerably this year when consulting giants such as Booz Allen & Hamilton Inc and AT Kearney announced cutbacks at the beginning of the recruitment season.
“When the economy sours it has a cascading effect on jobs in investment banking and consulting,” says Rohit Menezes, a Wharton graduate this summer. “As a result, the job hunt is for non-traditional enterprises, that is, arenas other than consulting and investment banking which are the choice of almost 70 per cent of Wharton graduates. And these don’t necessarily come to Wharton.” Menezes himself is part of the tribe for whom it has been business as usual—he was given a job offer by the Boston Consulting Group after the completion of his internship with them last summer and proposes to join their New York office by August.

In similar circumstances is his batchmate Bhawana Malhotra. She went through the paces for a chartered accountancy with Arthur Anderson before joining up with McKinsey in Delhi as a tax and legal specialist. Thereafter, she moved to Wharton in 2000 and is open about moving back to India if the “right offer” comes her way. In Malhotra’s case the imperatives are slightly different as her husband is Delhi-based. At the moment, though, she is taking up the offer of being a consultant with McKinsey at its New Jersey offices where she had interned last summer.

In the case of another Wharton student, however, the story was different. Srikanth Nagarajan interned with Booz Allen and Hamilton in New York but has now ended up with a job as an equity analyst with UBS Warburg. “I am fairly happy with the way things shaped out. I have shifted to a wider area of finance,” he says. An engineering graduate from Anna University in Chennai, Nagarajan has worked his way in the US market from 1993, his last stint being as a senior manager with Sabre Inc.

Stressful as the year has been, graduates and business schools alike are drawing lessons from the experience. “Students graduating from schools should factor the risk of recession into their career,” says Malhotra. “After all, we can face it at any point of our professional life.” Jain takes this further. “I would say that business schools should build on this experience and come up with the concept of short-term projects. I would recommend institutionalising it like it a residency programme for doctors,” he suggests.

Meanwhile, students—unlike in the heady days of yesteryear—will need to rely on networking, career fairs and the alumni for summer positions and job postings. Even though industry captains feel the corporate sector will come back gradually, the rules of the job market may well have changed forever.