Could the economic downturn due to the coronavirus crisis retrospectively affect placements at the top business schools of the country?
Concerns have been raised about whether some companies would end up revoking the job offers they had granted to graduating students over the past couple of months, after US-based research and advisory firm Gartner recently withdrew its job offers to several IIM students.
Several companies have also withdrawn internship offers to students at different IIMs, with many citing the logistical difficulties of the lockdown as the reason.
We spoke to Amit Karna, Business Policy professor and Chairperson of Placements at IIM Ahmedabad, to understand the situation better and get an idea of what could lie in store for students set to graduate in the batch of 2020.
The following are edited excerpts from the conversation.
‘Too Early to Be Sure, but Deferments in Joining Dates Very Likely’
We’ve seen reports of Gartner withdrawing its offers. How many IIM Ahmedabad students had job offers from the company, which have now been revoked?
Amit Karna: Jobs offers made to three students were revoked by the firm.
So, how worrying is the situation for students at the moment?
Amit Karna: From an MBA school perspective, it is quite early to judge. Graduation happens in March-end. Majority of the firms give their joining dates in April and May. Gartner is an exception in that it has decided so early. Barring a few outliers, most of the joining happens in June.
Right now, we don’t even know whether there will be more cancellations or not. We don’t know how many will end up with their offers rescinded.
As of now, majority of recruiters have said, “We will stand by the offers but we need time to decide on joining date.”
By mid-May and June, we’ll get a more definitive picture because there might be some companies which will initially defer, then there may be one more deferment and then they could tell us that you know what, we can’t take them.
Till then, for those whose offers have already been rescinded, will you be trying to get other offers for them?
Amit Karna: Not really. Right now, if I go to a firm and ask them for an additional offer, they are saying that “We don’t even know when the ones whom we have hired are going to join, so give us some time.”
So, that is why we are planning to wait, including for the Gartner students. We will wait until about May-June. But till then, if we get emails from firms asking for a couple of students, say because they’ve heard about Gartner rescinding, then yes, we will take that forward.
You’re hoping there won’t be cancellations and it will be limited to postponements in joining dates?
Amit Karna: Not many. We don’t expect too many, but then again, all of these are scenarios based on when the lockdown will be lifted, whether things will be normal around June/July, etc.
The offers were made in February. Whether the firms will go back on that…most of the firms have a long-term relationship with us so I don’t think it is likely to be the case. But deferment is a very likely scenario, by a couple of months at least.
Online Conference of Recruiters and B-Schools to Discuss What’s Next
What are the steps that IIM Ahmedabad has been taking? Is the institute reaching out to the recruiting companies?
Amit Karna: We did an online conference with all the recruiters and I even invited all the B-school placement chairs. This happened last Monday (30 March). We had recruiters, placement chairs and student placement committees.
Did it only have other IIMs in attendance or were there other (non-IIM) B-schools participating as well?
Amit Karna: We called other IIMs, B-schools like Management Development Institute (MDI), SP Jain Institute of Management and Research, and Jamnalal Bajaj Institute of Management Studies.
What were the takeaways from the online conference with recruiters?
Amit Karna: A majority of the discussion was around summer placements (internships), because discussing final placements (job offers) in April is too early. But at the same time, we did ask recruiters to tell us what the students should expect. In general, at least as far as IIM-A recruits are concerned, most of them have said that they will be honouring the offers. Neither have they spoken about changing the compensation nor have they spoken of rescinding offers.
The only thing they are saying is, “Give us some time.” So, we have to communicate to the students also that “In a normal scenario, you would have expected a joining data confirmation in April, but please be patient till May.”
We have also told the recruiters that we understand that deferments are a natural outcome of what is happening currently, but understand that students have their loans, there is panic, they are sitting at home, so at least communicate with them. As far as possible, if you can start virtual onboarding, that is good.
‘Other B-Schools to Face Greater Impact’
Do you think that beyond the IIM A, B, C, the impact in other B-schools will be more?
Amit Karna: Yes, it will be much greater. At a place like IIM-Ahmedabad, there are around 600 offers for say around 400 students. But in the smaller IIMs, there would be 200 offers for 200 students. So, that additional bargaining power helps (the likes of IIM Ahmedabad but isn’t available for smaller B-schools).
Frankly, IIMs in Ahmedabad, Bangalore and Calcutta (IIM A-B-C), especially IIM Ahmedabad, will not really see too many offer losses.
Gartner for example is now famous (for having rescinded their offers). Next year, students applying to Gartner will be very few. And I don’t think firms can afford that, because they generally invest a lot of blood and sweat in making a brand on campus.
And by the way, that doesn’t generally involve much advertising – entire brand-building is done by signalling, good summer internships, career development, honouring their commitments, positive stories. One negative story can kill that.
Summer Internships Worse Affected
You’ve spoken about how, at the moment, there are more problems regarding summer internships (for students who are about to enter the second year of their MBA) than job offers (for graduating students). Why is that?
Amit Karna: The peak of information about what will happen to the job offers will come in May-June. But at the moment, summer internships (for students moving into the second year of their MBA) have been hit worse, because they begin towards the end of March or early April.
Several internships have been postponed and not taken place so far because of purely logistical problems. For example, if it’s a marketing internship, you have to do sales. If it is a bank, the problem is in regulatory compliances, to be able to give you access to data. In case of international internships, there are travel restrictions in place so students can’t travel abroad.
But those companies which are able to conduct internships, they are telling us that they can take more interns. The other day, we had about eight cancelled internships, but within a week, we were able to get six of them alternate offers.
So, for internships, it isn’t about the economic downturn but about logistical issues.
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