Till just a few months ago, job placements at India’s premier tech and business schools seemed to be defying the economic slowdown.
A falling GDP growth rate, rising levels of unemployment and other economic woes did on impact the generous job offers at the Indian Institutes of Technology (IITs) and Indian Institutes of Management (IIMs). News reports referred to the institutes as ‘slowdown-proof’.
Yet, just months later, the coronavirus crisis has risked upending things in an unprecedented manner.
The economic fallout of the COVID-19 pandemic has brought in uncertainty about the placement offers which were handed out to students over the past few months. IIT and IIM administrations are now frantically appealing to companies to not withdraw the job offers they had made.
The First Signs of Worry
In what is being seen as possibly the first signs of a greater impending crisis, Gartner, a US-based research and advisory firm, has revoked its job offers to several IIM students. The firm has rescinded internship offers as well.
Prof Amit Karna, Chairperson of Placements at IIM Ahmedabad, confirmed the revocations by Gartner in a conversation with The Quint, “Jobs offers made to three students were revoked by the firm.” IIM Calcutta has also reportedly confirmed Gartner withdrawing its offers.
IIT Delhi, IIT Madras and IIT Kanpur have seen at least one recruiter revoking job offers, reported Business Standard. “We will try to create new opportunities for affected students after the lockdown period,” said C S Shankar Ram, convener of the All IITs Placement Committee (AIPC) and placement advisor to IIT Madras.
Unemployment Rate ‘Shoots out of Range’, Over 23% in Last Week of March
These developments come at a time when joblessness is at record levels in India. On 7 April, the Centre for Monitoring Indian Economy (CMIE) released alarming data on the jobs crisis.
In March, India’s unemployment rate stood at 8.7 percent – the highest in 43 months. In the last week of March, which was also the first week of the nationwide lockdown, that number shot up to more than 23%.
“The unemployment rate during the last week of March was 23.8%. Labour participation rate fell to 39%.”CMIE
But given that the IIMs and IITs remained relatively less affected due to the high unemployment rates in recent times, are things likely to be any different now? We spoke to Amit Karna, Business Policy professor and head of placements at IIM Ahmedabad, to understand the situation better.
Deferments Likely, Students Worried
How worrying is the situation for students at the moment?
Amit Karna: From an MBA school perspective, it’s quite early to judge. Graduation happens in March-end. Majority of the firms give the 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: ‘you know what, we can’t take them’.
Till then, for those whose offers have already been revoked, 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, “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.
A Loss-Loss Situation
Pratham Mehta, a final year Chemical Engineering student at IIT Delhi, tells The Quint, “There is certainly a worry now. We heard the news about Gartner revoking their placement offers. Students who have been placed in tech companies are really worried as well.”
Mehta explains a factor that compounds the worries of students whose offers get rescinded, “IITs have a rule, right, that once we get placed in a company, then we cannot sit for placements at other companies.”
Therefore, at institutes where such a rule is in place, those whose offers get revoked have also missed out on the opportunity to get hired by several other companies that were part of the placement process.
Given the economic downturn, these other companies will likely be unwilling to expand hiring and recruit the students who’ve lost their offers elsewhere. For such students, this will only amplify their worries.
Mehta stresses that there is little that a college administration can realistically do if a company chooses to rescind their offers, “Blacklisting is not really an option. Even if the companies are blacklisted from the campus, it would be a problem for the juniors, right? So, I don’t think the companies would get affected much with such a measure. They would move to other colleges. So, the best appeal now (to the recruiters) is an emotional one.”
‘Please Be Considerate’: Institutes Appeal to Recruiters
Prof V Ramgopal Rao, Director of IIT Delhi, issued an impassioned appeal to all recruiters on 3 April. Rao requested the companies, “Please be considerate to keep your promises. A few months of delay may be fine. Please do not complicate the lives of these brightest children in an already complex environment. If at all, they are capable of getting you out of recession faster than you can imagine.”
The All IITs’ Placement Committee (AIPC) too has written to recruiters, requesting them not to cancel offers.
The following is the text of Rao’s entire statement to the companies that have provided job offers to students in colleges and universities across India.
“An Appeal to Recruiters:
A sincere request to all the corporates who have offered jobs to graduates of IIT Delhi (and for that matter, of other IITs, colleges and universities in India which follow similar placement policies) and thinking of withdrawing them now because of current situation.
- Please note that, in IITs, the placement process works very different from similar top institutions abroad.
- Once a student is offered a placement, as per IIT Delhi policy, the student is not allowed to sit for other placements. Students trust the companies with their offers and do not even apply for other companies.
- As a result, if a job or an internship offer is withdrawn at this stage, the student, having given up her/his right to apply for other similar jobs, will end up not having any job right now.
We all understand that these are difficult times. But please be considerate to keep your promises. A few months of delay may be fine. Please do not complicate the lives of these brightest children in an already complex environment. If at all, they are capable of getting you out of recession faster than you can imagine.”
An Online Conference of Recruiters and B-School Placement Chairs
“We did an online conference with all the recruiters and I invited all the B-school placement chairs. This happened last Monday (30 March). We had recruiters, placement chairs and student placement committees.”Prof Amit Karna, Chairperson of Placements at IIM Ahmedabad
The online conference initiated by IIM Ahmedabad included participation not just from other IIMs but also B-schools like 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 talked of rescinding offers.
The only thing they are saying is, “Give us some time.” So, we have communicated to the students also that, “In a normal scenario, you would have expected a joining date 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, which is good.
‘Other B-Schools to Face Greater Impact’
Do you think that beyond the IIM A-B-C (Ahmedabad, Bangalore, Calcutta), the impact in other B-schools will be far 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
Amit Karna says, “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 logistical problems.”
The logistical problems are manifold. For example, for financial sector firms in India, there are concerns about taking in “virtually-connected” summer interns because of issues pertaining to data safety.
Additionally, all internship opportunities abroad have naturally been cancelled. U Dinesh Kumar, head of Career Development Services at IIM Bangalore, told Business Standard that some Gulf-based firms had withdrawn their summer placement offers because of travel restrictions, but added that the placement team had found other opportunities for the affected students.
Numerous reports of summer internships being cancelled are coming in from across the country. For instance, at IIM Calcutta, a start-up has reportedly revoked seven internship offers, while certain medium-sized organisations and start-ups have reportedly withdrawn their summer internship offers to students at IIM Shillong.
But those seeking internships still have a year or more of their course ahead of them. The more immediate concern is for those who have to enter the job market this year. Especially for students who had already landed offers but are now worried that they may have to be looking for opportunities yet again if their offers get rescinded.
At a time when even those graduating from the top tech and business schools are worried by the goings-on, and the employment scenario looks bleak to put it mildly, the only certainty right now seems to be that the jobs crisis is going to be around for a while.
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