B-schools expanding, but where are the jobs?

From its current capacity of about 437 students, the Indian School of Business (ISB) in Hyderabad is planning to increase its student intake for the 50-week post graduate programme in business management to over 560 for 2009-10 academic season.

Xavier Labour Relations Institute (XLRI) in Jamshedpur is doubling its student capacity for its two-year MBA in personal management and industrial relations (PMIR) to 120 for the coming academic year.

The Indian Institutes of Management (IIMs) are also bound to increase student intake owing to increased reservations for other backward class (OBC). IIM Bangalore has hiked student capacity for the batch starting academic year 2009 to 350, up from 270 students in the previous batch.

Owing to continuing demand for management courses, several business schools have increased their student numbers. “There is high demand to pursue a MBA degree,” adds Madhukar Shukla, professor of organisational behaviour and strategic management at XLRI. The institute has already got AICTE (statutory authority for technical education) approval for increasing capacity.

“The demand for management education is so high that we have to increase our student capacity,” adds an ISB official. However, most of these institutes are finding it a Herculean task to find jobs for their students. With companies shying away from campuses due to the tight economic situation, ISB has so far successfully placed less than 300 of its 2008-09 batch.

Recruitment industry experts question whether it is the right time to expand student capacity aggressively.

Says a New Delhi-based human resource consultant Yogesh Saigal, “There might be huge demand from MBA aspirants. But in these turbulent times, India Inc may not be able to absorb many management grads.” Earlier, a MBA course was done as it assured a person a job at the end of the programme. But, that’s not the case today.

No wonder MBA aspirant Nagesh Ram (name changed on request) is in a dilemma. The 25-year-old chemical engineer from Pune is doubtful whether the gruelling two years at a MBA school, along with the Rs 5-12 lakh he may have to shell depending on which school he gets admission into, will be able to guarantee a decent job.

“Till last year, if you secured admission into any of the first or second rung B schools, a well paying job was almost guaranteed. But today, seeing students from top B schools jobless, I wonder whether the time is right to jump into the MBA bandwagon,” says Nagesh, who has cleared CAT (common admission test) with a good score and is doing rounds of interview and group discussions at some institutes.

However, though it may no longer promise a job, a MBA still gives that competitive edge to individuals over their peers, says Kris Lakshmikanth, founder CEO and MD of Bangalore-based recruitment firm Head Hunters India. “People are hoping that the economic situation would improve over the next two years, and by that time the job scene would also be booming. So individuals can actually stay away from the pressures of current times, do a MBA, and get some value additions,” says Lakshmikanth.