Three out of four MBAs are unemployable, says study

BANGALORE: When Sayrajesh Menon of Kochi graduated from a B-school in Hyderabad in 2005, he had no doubt he would join an MNC. Instead he joined India’s legion of jobless MBAs.

He began to joke wryly that having an MBA and not having a job was “Mean, Bad and Awful.” Last month he settled for a lesser job in a call centre in
Bangalore.

Menon’s plight is understandable. Premier skills-testing agency MeritTrac has just concluded, after testing 790 B-school graduates in six cities on seven key parameters, that 77 per cent of them are “unemployable”. Heads of some top B-schools say this finding doesn’t surprise them.

“The industry is employing more and more students and finding later that many of them are not worth recruiting,” said IIM-Bangalore Director Prakash Apte.

The anomaly runs deeper. Every year India Inc needs some 1,28,000 MBAs — 2,000 as CEOs and the rest at other levels. There are 1,257 B-schools recognised by the All-India Council for Technical Education turning out only 70,000 MBAs. MeritTrac’s study sample covered this “recognised” talent pool and found that only 23 per cent of them were of employable quality.

Michael Bala of Clickjobs.com says that although India’s top B-schools produce some world-class graduates, “these are simply not enough. In any case, they are lapped up by multinationals for astronomical salaries”. He says of the hundreds of MBAs who send resumes to Clickjobs every year, “not even half deserve jobs”.

Kris Lakshmikanth of Headhunters India in Bangalore points out that many MBAs have to join small companies to improve their skills before trying their luck with bigger firms.  

Though Indian Institutes of Management were excluded from the survey, the IIM-Bangalore director attributes “poor quality of students to poor faculty rather than poor infrastructure” and says even IIMs and IITs are no exception.

He suggests that salaries must be raised to attract better teachers who are getting lucrative offers from the market.

As a result, even top schools that attract the creamy layer of students are unable to fully satisfy the corporate world’s requirements. “They totally miss out on training students in the organisational dynamics of companies in a corporate environment,” says TK Kurien, CEO of Wipro BPO Solutions.

Out of the 1257 recognised schools, only 132 have been rated as “average or better” by the All India Management Association and these produce some 20,000 graduates, but yhey are not all up to the mark, according to MeritTrac.

S. Sriram, executive director of Chennai’s Great Lakes Institute of Management, says less than 100 B-schools are “worth their salt” and students lacking even basic skills get MBA degrees only to end up without jobs.

Also “not too surprised” by the MeritTrac findings is Rajan Saxena, director of Mumbai’s SP Jain Institute of Management and Research, who says the “dubious quality” of management education comes from “ninety per cent” of schools which lack even libraries.

But students from Mumbai and Pune have got a semblance of a pat on their backs from MeritTrack, because they fared better than students from Delhi, Kolkata, Chennai and Bangalore in the skills test carried out for the survey. Bangalore and Chennai were the worst of the lot.

One reason could be that the south has seen more of a mushrooming of management institutes. J.K Iyer, professor at Chennai’s Loyola College of Business Administration, says many of these schools “are like kiosks (selling MBAs)”. Iyer says “the only time corporates visit schools in the south is for recruitment, and they end up getting bad students.”

Madan Padaki of MeritTrac hopes this “serves as an eye-opener for India Inc.” Critics both in the industry and academia insist that a national accreditation agency other than the AICTE should monitor management education.

(With Bhargavi Kerur/Bangalore and Arun Ram/Chennai)