Flipkart Defers Joining Of IIM Graduates By 6 Months – The Implications

By now, most of you would know that Flipkart  has deferred the joining of new hires to December 2016. Graduates from across top schools in India are furious. Placement Committees across IIMs are seething too.

Why is Flipkart doing this?

“We have re-designed our campus program in order to align that with our new business focus and provide meaningful opportunities to our campus hires. As part of this re-design, we are looking at a decentralized program that takes into account specific business needs as per the business unit. As part of the redesign process, we will be postponing the joining of the new recruits by a few months. This postponement was necessitated by the fact that Flipkart is undergoing an organization redesign that involves creation of new units in some cases and integration of a few units,” Flipkart said in a statement. “Instead of June 2016, the new recruits will now be part of the improved campus program in December 2016. Flipkart will also be paying an additional joining bonus of Rs.1.5 lakh to all campus recruits.” – Source, Livemint

The above doesn’t sound very convincing. Even if it is the case, it is highly irresponsible and graduates who turned down other offers for Flipkart are facing a loss of pay for at least 6 months which is in the range of  INR 8 to 10 Lacs. The joining bonus doesn’t come even close to compensating for that figure. It is an unwelcome 6 month gap in one’s career story – graduates can try to take up other short term projects/assignments during this period but they are not very easy to find. Apart from this, more importantly there is a constant fear and uncertainty around whether they will actually be in a job even in December. What if the date gets pushed further? What if Flipkart decides to not hire anyone at all?

All of the hiring took place in January and February of this year. What has happened in the last 2.5-3 months that it has been forced to take such a step which risks such ire from the eco-system and bad PR? If this was seen coming then they shouldn’t have hired so aggressively. If they didn’t see the ‘changes’ coming then how does it give any confidence to those graduates left stranded that things will be alright come December?

As per verified placement reports on InsideIIM – Graduates from IIM Ahmedabad, IIM Bangalore, IIM Indore, FMS Delhi, XLRI Jamshedpur, SPJIMR Mumbai, IIFT Delhi are schools we know for sure who will be affected by this. IIM A had 17 students who decided to join Flipkart i.e. about 5% of the batch. It is a significant number of students.

IIM Ahmedabad Placement Chairperson has rightly taken up the issue according to ET,

“The decision to defer the date of joining, coming as it does so close to the earlier promised date of June 2016, is sure to make this talent pool regret their decision of joining your company. Talented students fresh out of campus, on the eve of starting successful careers, feel cheated,” it said. While restructuring calls for tough decisions in an organisation, “the matter of campus hiring could have been handled much better with campuses forewarned well in advance and engaged as partners in “the matter of campus hiring could have been handled much better with campuses forewarned well in advance and engaged as partners in this decision making”. This is likely to have an impact on future campus hiring drives.

“Future engagement of Flipkart with B-school campuses is bound to get affected as a relationship based on mistrust and lack of transparency can never be mutually beneficial,” the email said. – Source, ET

The cost of tuition in almost all schools where Flipkart has hired from barring FMS and TISS is upwards of 12-13 Lacs. Majority of the students have an EMI burden which exceeds 25k per month. Although there is a moratorium period of 6 months given to students after graduation, it is not an option you want to exercise.

There is no doubt that a lot of top schools would explore blacklisting the recruiter for the upcoming summer placements (Sep-Nov 2016) and final placements early next year. Even if Flipkart is not blacklisted, this incident is sure to affect the quantity and quality of applications they receive in the future. The last thing a potential employee wants to grapple with is insecurity.

Pushing back of joining dates has been a regular thing for engineering graduates in India for over 6-7 years now. We routinely see engineering graduates being given joining dates which are a year to 18 months after the original (assumed) joining date. However, such occurrences have been very rare in the B School space especially at top schools. Given the brand equity created by Flipkart in India over the last 3-4 years, this is quite unprecedented. This is not only bad PR for Flipkart but also the entire start-up eco-system. Over the last few months, similar occurrences are making the top talent in India re-consider joining a start-up.

( Trivia – In 2009, Bank of America withdrew job offers to foreign MBAs in the US after being bailed out by the US taxpayer.)

The halo around the new-age companies in India is surely fading a little.

 

 

Team InsideIIM

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Comments

2 comments

Debdutta Dhar

Flipkart needs to rejig things considerably if they want to stem the almost continuous downward spiral they have been on over the past few months.

nitieprasad prasad

Who should REJIG ? B Schools or Flipkart.. I feel it is better for B Schools to REJIG ? It is B Schools and its M B As who benefit most out of REJIGGING ! .. As commonly believed it is B School professors who extend REJIGGING consulting to Flipkart like companies are the best ones to REJIG ? It is nothing wrong for them to do so ! … There is need to rethink Paradigm shift in placements in colleges.. Placements were the BEST thing to do 10 yrs back.. but not 10 yrs later on.. Let B Schools and its students ready for this. It is real case of needed awakening for the higher education portals .. B School students feel CHEATED , and feel REGRETTED of their decision is NATURAL.. Teaching to FLIPKART to involve their partners is something they know well.. Flipkart need no lessons on this.. Future relations will be effected is nothing but THREATENING ! Is it not ? .. Good piece to rethink management education ..