EVERY OCTOBER-NOVEMBER, India Inc. gets ready to go to business school campuses to hire new talent. On campuses, students put their best self forward to impress recruiters. School cafeterias bustle with speculation on how many would get their dream role on day-one of placement. Placement season in B-school campuses is exciting and nerve-racking, too.
There has been a 25-30% rise in MBA aspirants taking the common admission test (CAT) this year. B-schools are increasing batch sizes by more than half to accommodate more aspirants. The intent to have an MBA degree is indeed high, but reality is not as rosy. A leading consumer tech start-up, a regular at some Tier-II business schools changed its hiring strategy this year — instead of making placement offers, it decided to hire interns for six months. Students were told the company would train them, evaluate their performance and subsequently confirm employment. The HR head's rationale was that she wasn't sure if students had necessary skill-sets to handle complexities of a fast-growing business.
This trend may not be all-pervasive, but companies say industry observers are exercising caution in hiring business school graduates. It is much to do with the inability of business schools to reinvent themselves. At a time when volatility and ambiguity are the norm, businesses feel the need to hire talent that can make quick decisions and has critical thinking skills. A vanilla MBA is no longer the ask. Rapid digitisation of businesses has made generative artificial intelligence and machine learning a must-have. Knowing programmes such as Python have become hygiene factors today, just as excel was earlier. But most Indian business schools lack skills to generate industry-ready talent. "Business schools are trying to reinvent, but the pace of change is slower in educational institutions compared to industry. That's where the lag is," points out Janat Shah, former director, IIM Udaipur.
Shah says most business schools are struggling to hire faculty with new age capabilities. "There are restrictions on compensation too," he explains. Greg Brown, CEO, Udemy, agrees. He recalls his recent conversations with Indian corporates that hired from B-schools but are not too happy. "They don’t find them equipped with required skills and companies have to invest in upskilling. This problem persists even in the U.S."
Most top-tier business school students get pre-placement offers post summer internship. This year, not many organisations have hired summer interns indicating a dip in final placements. "The quality of summer placements at many schools has been a concern, indicating a gap in equipping students with new-age skills," agrees Varun Nagaraj, dean, SPJIMR. "We are offering autumn internships, allowing students to engage in corporate projects in their second year," he adds.
The New-Age Manager
In the new-age manager, industry is looking for better decision-makers as opposed to problem solvers, says Amit Karna, chairperson, PGPX, Indian Institute of Management Ahmedabad (IIM-A). "Problem solving is better done by AI than by an individual. So, just having problem solvers is not enough. There are things AI will never be able to incorporate, such as compassion or empathy. So, taking information, processing it via an AI tool and making the most effective decision is something that is going to help management students the most."
Most recruiters, says Karna of IIM-A, are looking for people with an appetite to learn and upskill. "Everybody who is hiring today is pretty sure in five-six years the skills would be redundant. They are looking for extreme levels of learning ability, adaptability to new environments, ability to innovate, and ability to think creatively."
Recruiters such as Titan Company, give more importance to how a candidate performs in group discussions and case-study evaluations as opposed to grades. "We have business case competitions, gamified assessments and interactive workshops. We look for the drive for results, relevance and intent," explains Priya Mathilakath, head, HR, retail and corporate, Titan Company.
Though CHROs prefer to be reticent about the skill gap in MBA students, their focus on internship programmes says it all. Chocolate-maker Mondelez India prefers to give final placement offers to interns it trains every year. "This provides us with a valuable opportunity to evaluate performance and potential of prospective employees during internship, but also affords students a platform to deliberate and decide if our organisation aligns with their career preferences," explains Nagina Singh- people lead, Mondelez India. Several organisations prefer to hire undergrads as opposed to MBAs. This gives them an opportunity to groom talent.
Honeywell Technology Solutions has onboarded 70% of its interns into full-time employees in the past year. According to Kunal Ruvala, president, Honeywell Technology Solutions, internships provide students with an opportunity to engage in substantial projects and collaborate closely with teams.
Time to Reinvent
The greatest challenge for business schools is to get talent with digital capabilities. Though the likes of IIM-A claim they haven't had problems attracting talent, hiring from industry hasn't been easy as most business schools have caps on compensation. Most are trying to change by partnering with industry. Raman Ramachandran, director and dean, K.J. Somaiya Institute of Management, says almost 45% of its MBA curriculum is experiential where students are encouraged to work in on-ground projects. "Ten students have come back after two weeks of interning at the International Olympic Committee event in Mumbai. Business schools have to reinvent themselves in order to be relevant," explains Ramachandran. Several corporates have also partnered with business schools to launch industry relevant courses. Axis Bank has introduced programmes on Java on several business school campuses, while PwC has introduced a programme on sustainability at IIM-A.
Debashis Chatterjee, director, IIM Kozhikode, is not just proud of being the first IIM to offer online MBA in India. He also talks about how his institution has differentiated by launching programmes such as post-graduate diploma in liberal studies, a PDP in business leadership and so on. "One of our liberal studies students got recruited by a bank ahead of the MBA finance student. The bank told us a conventional MBA finance would only be good at financial transactions, but what they needed was someone who could give them a world view."
SPJIMR is working closely with industry to introduce relevant programmes that would add to skill-sets of students. It recently launched FinNovate Accelerator, which brings together start-ups, experienced mentors, and established corporates in the BFSI space for an exclusive acceleration programme. "It facilitates collaboration, mentorship, and innovation, fostering growth among start-ups and building partnerships with various industry stakeholders. This builds on our long-standing tradition of immersing students into real-world industry experiences," explains Nagaraj.
So, how are business school faculty reskilling themselves? Tier II and III campuses are trying to bridge the skill gap by partnering with digital platforms such as Coursera or Great Learning. "The faculty are learning Generative AI, digital marketing and blockchain. We are launching a lot of Generative AI-enabled features on our platform such as an AI-enabled course builder. We are giving this as a capability to the faculty," explains Raghav Gupta, MD, India and APAC, Coursera.
Tier-I campuses are focussing on cutting-edge research. "We encourage professors to create a portfolio of research on emerging areas of business. A lot of pedagogical innovations come to the forefront through their research," points out Prashant Mishra, professor, IIM Calcutta.
Research, says Karna, helps faculty to stay connected with industry developments. The need of the hour is to move to a growth-oriented mindset, he adds. "Business school faculty need to make themselves relevant by participating in growth of industry. We encourage faculty to spend time in industry. We encourage them to do executive training for industry because that's where pain-points are."
Karna himself is a consultant with a leading mobility services company which is looking at diversifying. He is also working with a global venture capital fund that is trying to enter India. "We are helping them find an investment thesis, hire the right people and look at the right structure of finding opportunities."
Business schools are attempting to change. Nitu Bhushan, CHRO, Pernod Ricard India says, "B-schools have been actively seeking live projects and mentoring by industry leaders for students to augment academic excellence with what's happening real-time," she says.
But change is slow as business schools need to be at par with industry trends to stay relevant.