Wednesday, May 11, 2011

Slowdown over? MBA job offers suggest so

When a global financial crisis struck markets across the world two years ago, with several countries finding their economies in recession, MBAs from the finest institutions found job offers shriveling up on campus. But a global management education survey conducted in 2011, shows that the market for B-school graduates seems rather robust, with over 50% of students surveyed receiving job offers before they graduate.

The survey involving 4,794 soon-to-be-graduates from 156 management institutions worldwide, conducted by the Graduate Management Admission Council (GMAC), which runs GMAT, a globally accepted entrance test, found that 54% of B-school students had job offers before they graduated. This is a significant rise from last year. Only 32% of the final year batch of B-school students in 2010 had job offers before graduation.

But the optimism this year needs to be tempered with the fact that the figures haven't yet touched the dizzying heights that they had reached in the year 2000, when 70% of all B-school graduates had job offers before graduation. But when compared with a slump in 2003, the upswing seems to be a lot quicker this time round. "I firmly believe that the current recovery is based on stronger fundamentals, as corporates are now more pragmatic after having learnt from the last few years," says Madhukar Kamat, CEO and MD of the Mudra Group. Kishore Biyani, CEO of Future Group, feels that a sharper fall this time has itself brought positive change.

According to V.K. Menon, Senior Director, careers and admissions at the Indian School of Business, Hyderabad, MBA hiring patterns lag behind business cycles, both during an upturn as well as a downturn. "When there's a downturn there's a great deal of cost-cutting in companies, with employees losing their jobs. When the business cycle turns, there is some optimism, but companies are wary of taking any quick decisions, or hiring in a hurry," says Menon.

Some, like Milind Sarwate, Group CFO and Chief HR officer at Marico believes that, both during an upturn as well as a downturn, there is an "over-reaction" when it comes to hiring patterns, with companies hiring more than they need on the one hand, and firing more than they need on the other. He too, feels that hiring patterns are a "lagging indicator of the economy."

The good news is that the Asia-Pacific region has contributed the most to the job offers that candidates have received this year (67 %). "It's but natural that Asia has fared well, as many Asian economies have recovered faster, and some never went through a stringent recessionary phase at all," says Kamat.

"Clearly there are two worlds; while on the one hand, you have the developed countries where job creation is still an issue,on the other hand, you have the emerging economies in the Asia and Pacific region, where there's still very strong economic growth," feels Nitish Jain, President of the S.P. Jain Centre for Management, Dubai, Singapore.

Source: The Times of India, May 11, 2011

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