Campuses warming up to summer placements  ( October '22,2001, FE)

It’s the season for summer placements once again and management campuses are beginning to buzz with activity. But this year, with the global slowdown gathering force and Indian economy itself in no better shape, the impact on corporate profitability and the need for cost management is making its presence felt on summer placements too. India Inc. took a quick round of the management institutes across the country.

While early trends indicate predictably a significant drop in information technology (IT) recruitment from last year and a drop in the number of overseas recruiters, trends also point to an important shift towards brick and mortar fast-moving consumer goods (FMCG) firms, besides banking and finance. Interestingly, stipends have been largely unaffected, and in many cases, have even increased.|

Early trends
For the five-decade old Xavier Labour Relations Institute (XLRI), Jamshedpur, this year’s summer placements has seen FMCG companies and the banking and finance sector come back with a big bang. As many as 55 per cent of the placements were for FMCG companies while about 30 per cent were for banking and finance.

Dr Sharad Sarin, Professor of Marketing and the head of placement cell at XLRI says, ‘‘FMCG firms saw an increase of about 15 per cent over last year.’’ The largest haul was by Hindustan Lever Limited with a total of seven students. Other recruiters in this category included Procter & Gamble, Glaxo, Nestle, Asian Paints, Colgate - Palmolive, Pepsi, Coca-Cola, Gillette, Britannia and Reckitt Benckiser.

Among sectors, FMCG, banking and finance are the dominant sectors. With the IT downturn, one obvious change is the lesser openings in this sector and correspondingly fewer students are also looking at sector.

Alongwith IT, even consultancies have partially rolled back on summer ecruitments.‘‘Since business expansion and newer diversifications by corporates have been stalled, the demand for fresh talent has taken off on a finicky score,’’ says a faculty from the Symbiosis Institute of Management Studies (SIMS).‘‘Consultancy is a sector where summer recruitments are saturated,’’ says Mr Arun Narayan, placement co-ordinator, Narsee Monjee Institute of Management Studies (NMIMS).

Another area that has displayed withdrawal symptoms is the automobile sector. ‘‘The drop in business and a depression in prices has left the sector as a dull prospect for potential recruitments,’’ says Mr Jatin Narang, trainee second year, Indian Institute of Business Management (IIBM), Pune.

According to Dr Amit Mookerjee the Placement Coordinator at Management Development Institute (MDI), Gurgaon,‘‘ There is a clear movement away from new areas to traditional ones like FMCG. Major hot sectors now are finance, insurance, services, communication and telecom. Biotech is another area that holds promise.’’

Ms. Aditi Dixit, Member Placement Committee, Xavier Institute of Management, Bhubaneswar, says while the general response of companies is comparable to last year, the response from the IT companies is not as encouraging as it was last year. Given the fact that XIMB was a hot favorite with IT companies, the lukewarm response from this sector reflects the grim scenario on the campus.

According to Mr Kapil Dahiya, student placement coordinator at IIM-A, the first year choices are normally ‘‘fairly spread out with no clear preferences emerging. Thus, marketing, finance, consulting all get equal weightage as a rule.’’

While there has expectedly been a certain market slowdown with overseas recruitments coming down from 60 last year to 38 this year of the total 105 recruits who have found placements this year, IIM-A has still fared well. “We have done better than most other B-schools for the simple reason that most recruiters have shown a preference for the so-called blue-chip B-schools this year. Even the investment banks have made us their focus and though initially there were apprehensions that not many I-banks would show up at the campus, thankfully this did not happen.’’

‘‘At least seven of the ten overseas recruiters were exclusive only to IIM-A, including Merill Lynch, a first timer to India, Goldman Sachs, Morgan Stanley Dean Witter, UBS Warburg, International Finance Corporation, JP Morgan Chase and Lehman Brothers. In all, we are expecting around 60-70 companies this year,’’ he said.

And while the total number of companies visiting the IIM-A campus is more this year compared to last year, Dahiya attributes this to the fact that more companies were invited since the batch this year was bigger than last year’s batch. While there were 165 students last year, this year there are 200.

Faculty of Management Studies (FMS), Delhi, had a good placement season completing its placements in one day, with a record 126 offers for its 90 students. Says Mr Ajay Pandit, placement and corporate relations advisor, ‘‘Consulting heavyweights like Accenture, Andersen, Hewitt, besides consumer giants HLL, ITC and Coke among others recruited aggressively. Regarding stipends the highest offer was Rs 26,000 and the average Rs 17,500. We expect 50 per cent of the students to get pre-placement offers from the companies.’’

At MDI, Gurgaon, where the placement process began in September and will continue till mid-December, 40-45 students have already been placed for their summers and all the 133 students are likely to be placed by mid-December. Around 10-12 companies have already visited the campus this year, including Asian Paints, Britannia, Colgate Palmolive, Gillette, ICICI, Pepsico, Jones Lang Lasalle and Ranbaxy.

Speaking about the placement procedure, Dr Devi Singh, director, MDI, said, ‘‘We do not have a placement week for the summers. Ours is an on-going process and starts in mid-September and continues till mid-December. We encourage only one company to visit at a time to pick up the students. This is in order to ensure that the academic schedule of the students is not disturbed.’’ Last year 10 per cent of the students received pre-placement offers based on their summers and this year the figure is expected to go up to 20 per cent.

Compensation levels
Compensation or stipend levels this year are hovering around the Rs 12,000-17,000 mark on an average for Indian recruiters. The average stipend (as cost to companies) at MDI last year was Rs 15,000 per student per month, which is estimated to go up this year to Rs 20,000 per student per month.

Despite its poor showing in recruitments, one area IT appears to score over the others is monetary packages. The cost-cutting programme of the corporate houses has not affected the compensation of summer trainees, since they are preferring not to recruit rather than offer lower compensation. The highest stipend on XIMB, for instance, has been an offer of Rs 25,000 per month by IT major Cognizant Technology Solutions. There was a 20 per cent overall increase in the average stipend in the FMCG sector.

In the banking and finance sector, the rise was 12.5 per cent with the highest offer being Rs 20,000 per month. In the consulting sector the average was Rs 13,500 with the highest being Rs 15,000.

B-schools insist the focus in summer placement is not on the stipend but on the contribution it makes to the learning process of the students.

Says Dr Amit Mookerjee of MDI, ‘‘Summer placements are not viewed as career placement. The emphasis is on the learning involved and project reports have to be submitted in a specified time frame. The evaluation of the reports is included in the awarding of the final grades to the students.’’

Summer projects
According to Dr Leena Sen, NMIMS, the need to create a mindset that is more sharply focussed on industry and corporate needs will prove effective. ‘‘We have a lot of mock interviews, hypothetical case study discussion rounds and even holistic skills and personality development programmes. These initiatives speed up during the summer selection rounds to put up a polished set of trainees to prod the corporates against refraining from recruitments,’’ Dr Sen informs.

Interestingly, some of the B-schools subscribe to an upswing in summer recruitments at a time of downtrend. This is because for cash-strapped corporates, the lure of cheaper-sourced projects from summer trainees will prove cost-effective. But importantly, this is a reality that is particularly relevant to the FMCG sector.

‘‘Interest for cost affordable manpower through summer recruitment is exhibited only by the FMCG sector due to the immense scope for live assignments on relaunch repackaging and other core cost pruning initiatives,’’ says Mr Verma from NITIE. ‘‘The Close-Up toothbrush that was launched by HLL had a visible role of our trainees right from planning to delivery,’’ he adds.

Another new trend this year is that additional transnational corporates are coming to the conservatively ‘less hot’ campuses, while the relative newcomers are migrating to the IIMs who wield an aura. ‘‘Companies like Siemens have come to us, while the ones like Perfetti have travelled straight to the IIMs without stopping at our stands,’’ says a trainee from SIBM.

The projects that the trainees handle at the corporate front have also undergone a noticeable shift from the boom happy past. ‘‘The research projects are now racing ahead of live projects,’’ says Prof Kalim Khan, faculty of research and quantitative analysis at the Rizvi Institute of Management Studies and Research.

‘‘When Britannia came to the campus, their major thrust was to get trainees for market research project rather than hard core implementation initiatives,’’ says Prof Khan. The rationale is two-fold: Obtain disguised research at deliverable costs. ‘‘The companies can access free market data since the students shield the institute’s identity rather than the companies name at the time of data collection. Thus it becomes an anonymous research to get absolute data.’’ he argues. Clearly, this is a year when management institutes are grappling with a whole host of new factors in their summer placement programme for the coming year.

(Reporting by Mukta Magazine in New Delhi, Tarun Narayan in Mumbai, Jaidev Mazumdar in Kolkata, Jyotsna Bhatnagar in Ahmedabad and Dilip Bisoi in Bhubaneswar)