With the global financial crisis hitting several sectors, top management institutes are worried it will adversely affect the job prospects of their students, who are expecting a drop in the number of offers and the level of pay packages. Several top notch companies have already conveyed their intention to freeze campus placements, while some have decided to hire a limited number of candidates in the final placements.
Management institutes like the IITs fear the hike in average pay packages could reduce by 20 per cent, whereas students are apprehensive of a more severe downturn.
"The market meltdown will definitely affect the final campus placements with indications that companies would squeeze their requirements to a bare minimum. Companies, which had recruited five-six students during the last campus placements, may now restrict the number to one or two," Prof Sourav Mukherjee, placement chairman, IIM-Bangalore, said.
The situation has forced IIM-B to invite more companies to take part in the placement drive. "This year, we are approaching more companies from the non-financial sector," he added.
With lesser chances of investment banking companies -- the worst hit by the crisis -- seeking campus selection, institutes are turning to greater number of companies from the non-financial sector. About 30 per cent of the companies that annually come for campus selection at IIM-B are from the financial sector.
The investment banking sector, which used to bring in hefty pay offers, may also refrain from recruiting this year and this could pull down the pay packages's upper limit. "With chances of investment banking companies coming for campus selection diminishing, students may not get big pay package offers," said Prof Prashant Salwan, chairman (placements), IIM-Indore said. He was, however, confident that the IIM-I graduates would suitably be placed in other sectors.
"Pay packages for fresh students may not be as attractive this time. For the last five years, the increase in annual package offered to fresh graduates used to be in the range of 20-30 per cent, but now it could be in the range of 10 per cent, with average salary being Rs 14,00,000," said Prof Sushil Kumar, placements chairman, IIM-Lucknow.
Ameet Padiyar, convener, placement committee, IIFT, New Delhi said, "Some companies have indicated that they will not come for recruitment this season as they are reviewing their requirements and placements will be on freeze till they complete the review." With four more months to go for the placement season, others are still in the process of gauging the impact.
Students, on the other hand, are expecting a drop of almost 30 to 50 per cent in the annual pay package.
"We are stressed because the meltdown is going to affect our careers badly. This time we expect pay package offers less by 30-40 per cent than last year. Last year, 173 students received 367 offers and average annual pay package was Rs 13,70,000," said Sachin Sharma, a third semester student at IIM-Indore.
Normally, about 4,500-5,000 jobs are offered to the 1,600 odd graduates from the seven IIMs alone. Besides, there are several other institutes like IIFT, XIM & XLRI, Symbiosis, ICFAI, Mudra and SPJIPMR, whose graduates also get a good number of job offers.