Tuesday, February 10, 2009

How the mighty have fallen!

Guess whom IIT Bombay is looking towards to bail out placement? PSUs! Until last year, the top graduates there were targeting investment banks and private equity. The financial crisis has changed all that. ET reports:

Seeing the poor response by traditional recruiters in the first month of placement, public sector units such as IOC, ONGC, GAIL, BPCL, HPCL, BHEL, MTNL, NTPC and SAIL are being contacted by the student placement cell of IIT Bombay, inviting them to visit their campus for recruitments.

Placements on the IIT campuses across the country, which began in January, have suffered due to the economic slowdown, with even IIT Bombay, a much sought-after institute among most companies, seeing lukewarm response from the private corporate world so far. The trend is evident with placement dates being extended till April. Earlier, the placement process at the IIT Bombay used to get over within two to three days.
A reader comments that the report appears to apply to the Management school at IIT Bombay rather than the campus as a whole. But the situation for engineers cannot be a lot better. We are seeing similar problems at the IIMs where recruiters are asking that the placement fee be waived. Many FMCG and manufacturing companies long disdained by the IIM fraternity are taking their time responding- I guess they have a point to make. The IIM average salary, for long artificially inflated by the dollar-paying overseas segment, will now look a lot more modest.

I believe the corrections to the excesses that are now taking place are entirely welcome. Both the financial sector and the IT sector had created huge distortions in the graduate markets. Manufacturing companies and public sector companies were the big losers in the talent contest and we had the ridiculous spectacle of whole batches from engineering colleges veerring towards IT as though none of the other engineering disciplines mattered.

The debacle among banks and investment banks has taken the fluff out of the financial sector. The slowdown on the American economy and the Satyam episode is causing a reassessment of the IT sector. After the Sixth Pay Commission, government and public sector jobs, with their combination of decent pay, housing, job security and post-retirement benefits are beginning to look attractive. Whatever the problems it may have created, we should thank the financial crisis for restoring balance to the Indian job market and to aspiring young Indians.

14 comments:

S Praveen Kumar said...

Sir, I have 2 questions.
1. I think "distortion in graduate market" will never cease to exist. Once it was IT, then financial services and in coming years another sector will play that role, after that something else. What is your opinion on this?
2. Don't you think pay revisions for PSUs should happen more often (once in 4 or 5 years atleast rather than once in 10 years now) for them to compete with private sector?

Anonymous said...

Its all a matter of risk vs. return, since the last 10 years after the private sector (especially mnc) has taken off in India (majorly in the last 3-4 years) .. we had only witnessed the returns part of the equation .. totally forgetting the risk part .. its finally come to haunt us now ..

Anyways many people were overpaid and many people were underpaid (in the PSUs, manufacturing etc.) bringing a false sense of high and low worth respectively .. it would be good to see this taking a correction ..

Ranjit said...

The sad thing of course is that the 'correction' would not be there for long. When tmrw, the economy picks up, IT companies start hiring again, ppl will get back to their old ways. PSUs would be dumped by IITs and ppl would go where the moolah comes from.
Economic/Business cycles would never change man's greed for money..especially for we Indians.

Gaurav said...

Sir, why is there a distortion? Is there an ideal model which suggests what percentage of a batch should go to which sector? Labor force mix keeps changing all the time - it has moved from agriculture to manufacturing to services in US. Tech services firms in India will get hit on pricing and margins, not on volumes - if one looks at IBM, Accenture's etc outsourcing backlog - so IT is going to continue generating employment. It is good for the country. Regards,

Anonymous said...

Do you really think the IIT/IIM guys will stay in those low paying jobs for a long time? As soon as other opportunities become available (and they will thanks to globalization/privatization/corruption) they will jump the ship without a blink in their eyes...

Tanu Shivnani said...

anony: see u cant say they will jump the ship to corporate offers cos it completely differs 4m person to person..depends so long as u like d work n u r content wid it in every other way, the chances r pretty fair that they mite stick 2 it...

amreekandesi said...

It is increasingly beginning to look like the IT bubble is bursting, now that IT salaries are coming down, and jobs are not so secure anymore.

Plus the pay commission helped decrease the disparity between the public and private sector wages, like you said.

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6th Pay Commission said...

6th Pay Commission

By the 6th pay commission a discrimination has been created amongst the
pensioners. 6th pay commission's differential benefits to pensioners from
January 1st 2006 is in contravention of laws laid down by honorable
Supreme Court....

READ MORE >> www.right2info.com

6th Pay Commission said...

6th Pay Commission

By the 6th pay commission a discrimination has been created amongst the
pensioners. 6th pay commission's differential benefits to pensioners from
January 1st 2006 is in contravention of laws laid down by honorable
Supreme Court....

READ MORE >> www.right2info.com

6th Pay Commission said...

6th Pay Commission

By the 6th pay commission a discrimination has been created amongst the
pensioners. 6th pay commission's differential benefits to pensioners from
January 1st 2006 is in contravention of laws laid down by honorable
Supreme Court....

READ MORE >> www.right2info.com

Smit said...
This comment has been removed by the author.
themightys said...

Even at IIT Delhi, we have seen the same trend. No one knows when will the economy improve and what trough the downturn will reach. Hence, to hedge their risks of recession, students presently want a PSU job but only temporarily. Most of them would be switching sides with the upswing.