Graduating management students' employability quotient at less than 10%: Survey

Seventeen-year-old commerce student Vishal Pandey is absolutely sure about what he wants to do after his graduation. “I’ll do my MBA and then work in a big company where I can earn lots of money,” he grins. Aspirations such as Pandey’s are not uncommon in a country where an MBA degree has come to be viewed as a guaranteed key to success. From the ‘90s, when such specialised courses were the domain of a privileged few, acquiring a management degree today has become much more accessible.

From a few hundred MBA colleges in the early ‘90s, there are over 3,000 institutes today.

Unfortunately, the jump in number has not meant a simultaneous improvement in the quality of education. In December last year, Aspiring Minds — a Gurgaon-based employability solutions company — conducted a first-of-its-kind survey testing Indians’ employability quotient after a management degree. The survey covered more than 32,000 MBA students across 220 colleges, only to find results that would leave people like Pandey disillusioned. Their report revealed the employability of management students to be lower than 10% for any functional role in human resources, marketing and finance.

For Vini Avlani, a PR professional in Mumbai, the report comes as no surprise as she learned the truth the hard way. Last year, Avlani, 23, graduated with an MBA from a private college in Mumbai.

While the course kept her on her feet and equipped her with the skills she thought ‘would be required’, the lack of placements was a big shock. “Companies were reluctant to hire freshers since we didn’t have any ‘real’ experience. Many of the jobs offered were sales profiles which were far from the glamorous dreams many of the students had about marketing and finance profiles,” she states.

Teething issues
According to Avlani, the problem lies in college policies that allow people to pursue the degree immediately after graduation, in contrast to foreign universities. “While I understand that some people want to finish their education at one go, MBA colleges need to ask for minimum work experience before enrollment,” she says, adding that she faced difficulties grasping several financial concepts in her second year, which would have been easier had she been exposed to them in the real world.

“Our report also revealed that the understanding of basic concepts is weak. In college, there tends to be an emphasis on rote learning, which does not help at the workplace,” says Varun Aggarwal, Chief Technology Officer  (CTO) of Aspiring Minds.

The lack of development of cognitive skills like decision-making and problem-solving are also hurdles. “Only 40% MBA graduates spoke correct English, a basic requirement for every sales profile. So there’s a huge gap,” adds Aggarwal. Avlani points to the importance of functional skills when she cites an example of her classmate who topped every semester but was weak in English. “He would struggle in the group discussion/personal interview (GDPI) sessions and despite his capability, was one of the last students to be placed.”

Even students from the more reputed colleges have been exposed to the effects of decreased employability. A recent survey by the Graduate Management Academic Council, an institute that conducts the GMAT exam, found that 13% Indian management graduates were without jobs, as opposed to 95% US students who found employment. The reasons for unemployment ranged from lack of industry/functional experience (47%), low remuneration (29%) to over-qualification (29%). Even the average salaries for Indian graduates were remarkably low when compared to other countries — $34,000 as against $85,000 for US citizens and $1,00,000 for European citizens.

For Chirantan Shah, a consumer research analyst with the ITC group, the quality of education in Tier II and Tier III management institutes is the problem. “They don’t have the requisite resources and are not able to get their students paid summer internships, which are essentially your window into the actual work scene,” says Shah, an IIM alumnus.

A pervasive trend
Even hospitality and creative professions like advertising are not immune to the effects of low employability. Parth Shah (name changed) is employed as cabin crew with a UAE-based airline.

By qualification, however, Shah is a hotel management graduate, from one of India’s premier institutes no less. After spending four years learning the ropes in college, Shah worked with a five star hotel in Mumbai for barely six months before deciding to jump ship. “The stress was too much and the money, too less,” he explains.

Pavithran Nambiar, general manager at JW Marriot, believes that not everyone is cut out for the service industry. “In cities like Mumbai, the hospitality industry is associated with a certain degree of glamour. Many become a part of it and then are unable to adapt to the odd hours, the hard work involved and the realisation of no weekends.”

Nambiar states that university scores have no bearing and attitude is what matters, not aptitude.

“The hospitality industry needs people that can embrace the service culture and paint a smile on people’s faces despite their own issues. Guests can be obnoxious and demanding but you have to learn to keep your ego aside and just have your goal in mind.”

While India’s growth in the education sector cannot be disputed, the mushrooming of colleges should not be seen as a sign of greater prospects of employment. An overhaul in teaching methods and course curriculum is the need of the hour.