Hard times on B-schools; placements, enrollments down drastically

With economic slowdown hitting the corporate balance-sheets, a large number of business schools other than the top 15-20 institutions like IIMs, are going through hard times on account of a sharp drop of 40-50 percent drop in campus hiring and almost an equivalent ratio of decline in the number of students opting for fresh admissions, reveals the ASSOCHAM latest assessment.

The Associated Chambers of Commerce and Industry of India (ASSOCHAM) paper on "B-Schools are facing the consequences of economic slowdown" reveals that economic slowdown has impacted the campus hiring which has gone down by 40-50 percent over last one year. The salary packages which are offered at b-schools and engineering colleges are also being curtailed by 35-40 per cent as compared to last year.

While releasing the paper, Mr. D S Rawat, Secretary General ASSOCHAM said, "Recruitments at the campus have gone down drastically. As a result a large number of the B-schools and engineering colleges are not able to attract students. More than 190 B-schools have already closed down in 2012 in the major cities Delhi-NCR, Mumbai, Bangalore, Ahmadabad, Kolkata, Luknow, Dehradun etc. Another 165 are struggling for their survivals, reveals the ASSOCHAM report.

"The situation in the engineering colleges is worse since a mushrooming growth in their numbers with many of them lacking in adequate infrastructure and quality teaching faculty, reveals the ASSOCHAM assessment. This could do when the economic growth was robust, but now only the best will survive", adds the ASSOCHAM paper.

Mr. Rawat also commented that the global uncertainly has certainly affected the placement pattern at b-schools & engineering colleges. This year the numbers of placements are fewer and there is also no hike in the average pay packages. Apart from the IIMs and a handful of others, it will be difficult for the several business schools to get 100 per cent placement in future, added Secretary General.

The paper further pointed out, this year the offers from the financial and telecom sectors have also gone down by 35 per cent. The pay packets offered are not very encouraging lesser than last year", said Mr. Rawat.

There has been a drop about 15,000-18,000 in total registrations this year, Over 35 per cent drop in students appearing for the MAT exam conducted annually by the AIMA, adds the paper.

There are several instances where the students opting for particular colleges in the university held counseling (cases in point are colleges under IP University, Delhi) did not show up forcing the college managements to scout for new enrolments. Some of these colleges have been forced to close several programmes making the faculty redundant in the process. "The situation is quite bad", said one of the Directors of the institutions surveyed in the report.

"Many parents and students are re-thinking on investing two years and several lakhs in a course, with the dem­and and placement of MBA graduates not as good as before due to slowdown, highlight the paper. It estimated that around 300 to 500 institutions have become defunct as they are not getting enough students to be viable," adds the ASSOCHAM paper.

The paper also stressed besides quality of education in an institute, students are more concerned about the placement and salary statistics and discounts offered on the fee structure.

MBA seats in India grew almost four-fold from 95,000 in 2006-07 to 3,60,000 in 2011-12-resulting in a five-year compounded annual growth rate of 30 per cent. Unfortunately, job opportunities for MBAs have not grown in the same proportion as the period coincides with the global financial slowdown. The MBA capacity in the country was built based on the projection of a 9 to 10 per cent economic growth rate.

Mr. Rawat further said that the quality of higher education in India across disciplines is poor and does not meet the needs of the corporate world."We have a peculiar situation. On the one hand, there are no jobs available; on the other hand, corporates are searching for skill sets not available with the students", pointed out the ASSOCHAM paper.

ASSOCHAM has advised the B schools to improve the infrastructure, train their faculty, work on industry linkages, spend money on research and knowledge creation, as well as pay their faculty well in order to attract good teachers and wait for better times.

(ASSOCHAM)