In this article, I will try to answer some questions related to the impact of COVID-19 on placements in Indian business schools. I will cover mainly three points in this article-
- Likelihood of Placements Scenario In Business Schools
- Impact on Summer Placements
- Impact on International Placements
See the situation is very serious. The virus is very virulent, it is a once in a lifetime event when this kind of outbreak happens. It has spread throughout the world quickly, governments kept trying and it’s there all over the world. The situation seems grim for some countries. But the way it has been contained in China, Taiwan, Hong Kong, and South Korea, it’s likely that the spread can be contained in coming months in most countries. This will give ways to come economies back on the track, and hence everything will sway towards normalcy slowly. This will also make placement scenario at top business schools on normal track in the next one or one and a half year. My whole analysis of placement scenario is based on these assumptions. But if the threat of the virus persists for 3-4 months or more than that then major economies along with them the world economy will face a severe recession. In this case, everybody will be hit severely and placements at business schools will be severely affected even some students at top business schools might remain unplaced!
How is the Coronavirus outbreak going to impact the placement process at business schools in India (Class of 2021 and 2022)?
As the economic activities have slowed and normal business has temporarily stopped in major economies, companies are likely to stop hiring temporarily unless the situation becomes normal. Although they are unlikely to rescind the offers because they made to maintain relationship with B-Schools. So, it would not affect much placement scenario at top business schools as placements are already done and for upcoming batch placements will be a year later, and till then, the situation is likely to be normalised.
Although the placement process is likely to deviate from the usual functioning. In the top B-Schools, more companies are willing to come, but since the batch gets placed early, some companies don’t get the chance to hire. Suppose 150 companies are willing to hire from a top B-School, the placement committee will give slots to all these companies, but generally, all students get placed in first 100 companies, and hence, the remaining companies do not get any students to hire. In the current scenario, companies might be reluctant to hire, but to maintain a relationship from business schools for the future, they would take part in the placement process and hire some students. The number of offers made may be lower than the number of offers they usually make. This will definitely increase the number of companies who will take part in the placement process. Hence the number of companies might increase to 130 from the usual 100 companies. The compensations part is also likely to remain the same, since all companies try to maintain parity, so if they are not going to increase the compensation then they are not going to reduce it. But the parity part is applicable only to the reputed companies, so there might be some companies who reduce the compensation part but that’s would be for a handful of companies.
Also, new companies who will get the opportunity to hire because of fewer offers from prominent recruiters, will offer compensations close to median placement offers. They might be offering very less to their traditional hires but when they come to prominent business schools, they ask for median and try to offer median compensation. These new companies coming to campus will hire even though they themselves might be reluctant to hire as usual. Because when the business atmosphere is not same, they need talent to run their companies. Hence, they may stop hiring from other colleges and even might layoff some underperforming employee but for the top-notch talent, they will come to top business schools in the country to hire.
For other business schools, especially for tier 2 and tier 3 colleges, this outbreak might be a double whammy. Less no of companies would be interested to hire from there, also some visiting companies might opt-out from the placement process as they have the bargaining power. Compensation may also drastically reduce in these colleges when compared to the top business schools. And, in the given scenario, even hiring companies may reduce the compensation. Concept of parity applies only in top management positions.
Hence, if the situation comes under control in coming 2 or 3 months, placement prospect of top business schools is not going to be affected much but in other colleges, it might be impacted to a large extent. But, if the coronavirus persists for a longer term then everybody is doomed businesses, governments, society, humanity.
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Will there be any difference in the impact on summers and final placements or the impact will be similar?
There will be a huge impact on students who are currently doing /going to join summers internship. Many companies offer summer internship because they want to check the students while working. They don’t want to take the risk of evaluating students in a short time. At the end of the summer internship, a lot of companies roll out PPOs (Pre-Placement Offers). This year, as many students are being offered work from home, they may not get projects that are generally offered to summer interns. Also, there will be students who work on projects after the lockdown is lifted, and they would not get sufficient time because of academic constraints from B-Schools. Hence, this would influence the chance of PPOs.
Some companies have rescinded the internship offers because of the COVID-19 outbreak. Also, many B-Schools are considering to reduce the upper cap of work experience required to make internship optional e.g. if a student has more than 4 years of work experience before joining the B-School, then internship will be optional for him/her. The cap for the same could be as low as 2 years. Also, B-Schools are introducing an extra course in place of internship for students who still fall in the mandatory brackets.
In all these cases, this year’s summer internship is likely to be hugely affected. But for the next year, summer internships are likely to be usual. Because companies will have the option of whether they want to offer a PPO or not. And also when it comes to judging students nothing is better suited than the summer internship. Internship will be a better option for companies when they do not want to make any mistake and want the best of the best. Also, in the internship, they make the least commitment but get their work done and judge students.
All this relevant only for top business schools. In other B-Schools, the next summer internship may be hugely affected.
Hence, currently, the summer placement is under a huge impact (although it was done way back). But, next year's summer placement is likely to less impacted. On the other hand, upcoming final placement will be less affected in top business schools (MBA 2019-21) and currently graduated batch (MBA 2018-20) will have some impact (Offers by one or two companies has been rescinded). But for tier 2/3 MBA B-Schools, the current summer placements/internships, as well as the upcoming summer and final placement will be hugely impacted.
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How much impact is going to be on international placements?
This is applicable in for top 5 business schools in the country. Because almost all companies who offer international roles or almost all international companies hire from these campuses. In international placements impact of summers and final placement is likely to be same but to a different degree. For summers, many international companies take interns and some reputed companies hire for domestic as well as international locations. But in the final placements, fewer companies come for international locations.
This year many international summer internships have been cancelled and, in some cases, work from home has been given, as internship started after coronavirus outbreak and many countries have stopped allowing international flight. As far as the final placement is concerned, jobs already has been offered for the Class of 2018-20. Since there is no constrain to defer the joining dates, companies are likely to defer the joining date and will wait for the situation to normalise.
Upcoming summer placements at international locations are unlikely to be impacted because the economies are likely to recover once the thread has been contained. But final placements might be dull depending on the severity of the impact of the outbreak on economies.
Suggestions for Incoming Students at Indian Business Schools
As far as the suggestion is concerned, see the upcoming summer placement (Class of 2020-21) and final placement (Class of 2019-21) is going to be affected to some extent in the top business schools in the country but other business schools likely to be affected hugely. In this scenario, companies will not be generous while giving offers. So, for best the companies there is likely to be huge competition among students. In this scenario, students who have a similar profile as the role offered by companies would have a better chance. So, I would advise them to focus on their specific strength as they would be able to do their best in the competition.