The global credit crunch -how is it going to affect B-school placements?

Every newspaper and TV channel worth its salt is talking of the global economic meltdown and the weakening of the rupee. But, have you wondered what is going to be the effect of this meltdown on the B-school graduates?

The international banking sector is on a nosedive. Within a space of six months (the crisis started with the Bear Stern collapse in March), big names like Lehman Brothers, Bear Stearns and AIG have been wiped out. Other hotshots like Barclays Capital, Goldman Sachs, HSBC, J.P. Morgan, Ernst & Young, Merrill Lynch, Morgan Stanley, Citigroup, American Express and Deutsche Bank will be more circumspect in their hiring.

Even hirings in the Indian banking sector have slowed down. According to a faculty member in charge of placements at MDI Gurgaon, the joining dates of MBA graduates in many banks have been delayed (the normal joining dates fall in the months of July and August). Obviously, the Wait and Watch approach is being followed.

Although not confirmed by official sources, it is a known fact that Pre-placement offers have been revoked in a couple of IIMs. But it’s the second tier MBA schools that are going to be most hard hit by this economic downturn. It is quite possible that some companies may even back-out from the placement process. Or, they might outsource the process to consultants because companies have to shell out round about Rs 1 Lac for each hiring during the final placement process.

Consequences of the economic slowdown could include:

• Less hiring so as to cut down on costs
• Comparatively lower salary packages than before
• Placements in Tier 2 MBA schools will be hit

The markets are predicted to go down even further. But, will there be any long term setback? I don’t think so. Placement for the 2008 batch should be a level playing ground. In my opinion, Marketing, Consultancy and Operation are going to be the big draw of this season. What’s your take on it?