Monday, December 29, 2008

B-school placements in the aftermath of the Terrorists attacks & the Financial Tragedy (Part II)

Not much has changed since part-I of this series was published. GoI is on the verge of announcing a second stimulus package, RBI is expected to further reduce key rates and oil has plummeted to record lows. All these factors together with the impending Obama stimulus package effect have created some but insignificant hope for the B-school students in India. Companies are revisiting their freezed hiring decisions and considering to go to selected campuses in order to acquire good talent at low prices. But this is clearly not sufficient.
Many top B-schools have their final placement week scheduled in mid January, only after which the clear effect of the current stimulus package on the total hiring plans of the industry will be visible.
Current Economy slowdown (I don’t call it a recession for India) has left everyone grumbling to gain the maximum possible at the cost of others. Companies regular at tier-II campuses have developed new found love for tier 1 B-schools whereas tier-1 regulars can be spotted at IIMs hunting for the very best in India. It’s an employer’s market and companies aren’t complaining. B-schools have been left at the mercy of the hiring companies with regards to slots and other modalities. B-schools on the other hand in order to achieve the majestic 100% placement figure coercing the regular companies to hire from their campus, at times even threatening to ban slots to these companies in future if they refuse to hire now.
In this circus, the students are suffering the most. Almost all B-schools students have huge education loans to repay and above all meet the never ending expectations of their dear ones. Top performers will definitely get through as there is always a demand for good talent but Its the back benchers who will find the going difficult.
B-schools have already begun to find ways to get rid of the back benchers from the placement process. High minimum CGPA requirements to be eligible for placements, unnecessary debarring of students from the placement process, wasteful job profiles at disgustingly low salaries etc are some of the tricks being resorted by B-schools to achieve the majestic placement figure. A prominent B-school in NCR has increased the minimum CGPA required for placements to such high levels that it effectively makes half the batch ineligible for placements. Not that the colleges are not trying to place these back benchers but just in case the placement efforts don’t bear fruit, these highly ranked B-schools have a reputation to protect.
Eventually, still three months are left for the current batch to pass out and hopefully by then most of the students will be placed. The current scenario reaffirms the age old Darwin theory “Only the fittest will survive, rest will perish”.

Sunday, December 14, 2008

The Human Resources CEO

Marketing in 1970’s, finance in 1990’s, But HR in 2000’s? Today media is flux with management surveys saying that the new breed of CEO’s will necessarily come from the HR department. Although the trend is clearly visible, but are we ready for the change? What is it that makes an HR guy the man-Friday for the top job? Let us look at a few reasons why an HR guy will be the chosen one in future.
In today’s increasingly complex world, a person can’t be a genius in everything. Even superman can’t be expected to match such high expectations. Resting on this reality, the modern CEO has a team of specialists to help him with different aspects of the job i.e. we have CFO, COO, CTO, CIO, CMO….the list just keeps getting longer. So what does a modern CEO actually do? The main job of the modern CEO is to keep his army of executives motivated and extract maximum productivity out of them. It is his responsibility to get the job done from various specialists, put the efforts together and deliver the final product. When Henry ford was asked by the US supreme court to step down from the chairmanship of Ford motors due to his lack of engineering expertise, his reply was that although he knew minuscule regarding the technicalities of building a car, he knew the ones who were experts at that and he was effective enough to get the work done from these people. This was the mantra behind Henry Ford’s success. The mantra can’t be truer than in Today’ world.
In the modern corporate world, tales galore of how successful CEOs like Jack Welch, Neville Isdell etc were first employee’s manager over anything else. They devoted the majority of their time in finding and nurturing the best talent and getting work done from them. This accomplished, the corporate results took care of themselves. So where does the argument leave us now? Although the trend has gained momentum, it is still premature to predict where the tide will turn. HR CEO’s will have to perform in their new role to prove their worthiness. HR will continue to be looked upon as an organizational support function till the new HR chief executive proves his mettle.
HR managers to get into the driver’s seat of their organization have to first equip themselves with critical non-HR skills in Finance, marketing etc. Clearly the trend is not visible here. HR managers have to prepare themselves before they can occupy the front seat.

Thursday, December 4, 2008

B-school placements in the aftermath of the Terrorists attacks & the Financial Tragedy... (Part I)

Financial crisis that has taken the world by storm had been in the making for some years now. It is ironical how the entire financial mechanism all over the world was unable to detect the looming threat at the right time. Add to this economic tragedy the ill effects of terrorism and the final mixture looks potent enough to blow us all.
It is now a known fact that 2009 is the worst year to past out of a B-school in India. Financial sector which accounted for roughly about 20% of B-school placements last year has seen business plummet to record lows. Although none of the Indian financial giants have gone bankrupt at the time of publishing this post but their fortunes have been severely affected by the current financial mess. The international Ivy League investment banks like Lehman brothers which to some extent were responsible for driving B-school salaries sky high have gone bankrupt. Many Indian Financial giants have already freezed fresh hirings and are currently revisiting their business strategies.
IT-ITes is another bread butter sector for the Indian B-schools. Rising IT exports had resulted in IT companies also absorbing about 20% graduates last year from the top rung B-schools in India. Rupee depreciation has affected the IT sector more than its appreciation did last year. Add to that the effects of the current economic mess, and the placement picture gets gloomier.
All sectors are interlinked and when the economy is in mess, only few sectors can look up. Automobile companies in India are already feeling the Pinch. Tata motors & Ashok Leyland have laid off thousands of temporary workers (Tata alone laid off about 4000 workers), closed their plants for short intervals to get rid of the excess inventory & Mahindra Automobiles reported a decrease of more than 40 % in profits . Tourism and hospitality are also down as people can’t spend if they don’t earn. Realty sector is the worst affected of all. Unitech in its bid to get over the current liquidity crisis and meet its financial obligations sold a stake in its telecom unit to Telenor of Norway, laid off hundreds of employees and is now planning to sell off a stake in the hotel chain it was developing. DLF, Omaxe and Prasvanath have also either laid off employees or resorted to huge salary cuts to tide over the crisis. Everyone is aware of the aviation sector mess and I don’t intend to elaborate further.
Now add to a already gloomy placement season, the effects of the terrorist attack on Mumbai. If investors can’t travel to India because of security reasons, will they invest in India? Will any investor put his money in a project, the security of which can’t be guaranteed by the local government? Experts say that the terrorist activities won’t affect the Indian economy in the long run but effects will be seen in the short run. So what future holds for the B-school batch passing out this year?
A prominent B-school in Gurgaon has opted for a roll-on final placement process this year as opposed to a week. A roll-on final placement process was completely unheard of till now among the top B-schools in India. Another famous B-school in Mumbai with an international campus has opted for two placement weeks against the usual one. The same applies to another famous B-school in Pune with affiliation to a prestigious group of Institutes. Another well known B-school in Ahmedabad which held its final placement week last month failed to place around 50% of its batch. The school has now opted for a roll-on process. All this was before the Mumbai Terrorist attacks, the effects of the attacks are yet to be seen on placements. According to some estimates, atleast 10-15% premier B-school pass outs of last year are either unemployed or being considered to be laid off. Companies which hired in bulk last year are non-committal about visiting campuses this year. Some companies have resorted to hiring only from their summer interns while many have completely freezed new recruitment.
However not everything is gloomy for students and companies. The positives and what students can do to tide over the current employment crisis will be discussed in the subsequent post.