Tuesday, 05 December 2023

Denial, anger, bargaining, depression, and acceptance. Those are, quite famously, the
five stages of grief, and a student from the Indian School of Business (ISB)—one of
India’s top business schools—went through all five of them in the course of one phone
interview with me recently.

We were discussing campus placements, and what had happened when he sat for job
interviews during ISB’s Day Zero last week.

“It’s a bloodbath,” he told me, requesting anonymity, “It feels like there has never been a
worse time to graduate.”

Day Zero, for the uninitiated, is the first day of campus recruitments at India’s premier
colleges. A fateful day for the graduating batch, it’s when some of the most sought-after
recruiters show up on campus and have the entire batch to choose from (though, to be
honest, that’s only been via Zoom since Covid). Over the next three months, there will be
many more such recruitment days (imaginatively called Day 1, Day 2, and so forth)
where India’s B-Schools will continue vying to get their students placed in the best
possible seats in the corporate world.

But if mention of a “bloodbath” didn’t already give it away, this year is like no other in
recent memory. ISB, which typically places around 65% of all its graduating students on
Day Zero, has managed only 45% this time around, a credible source deeply familiar
with the developments tells us. And it isn’t just ISB.

Across India’s premier B-Schools, the number of offers are down. Salary packages are
down. And the anxiety is palpable.
Welcome to the very first edition of Day Zero, a brand-new newsletter from The Ken,
where over the course of 12 editions starting today, I’ll take you behind the scenes of the
toughest placements season in years. Every Tuesday morning at 9 am, we’ll go beyond
just the headline numbers and into the still hopeful, but increasingly nervous, campuses
of India’s colleges. We’ll talk to students, alumni, faculty, recruiters, and industry
experts to try to figure out what’s really going on.

Day Zero is a premium newsletter, which means it’s behind a paywall, but given the
importance of placements for graduating students and the unprecedented nature of this
year’s recruitment trends, we’ve decided to—for a limited period—make it free to read
for everyone signing up with an official college email ID. So be sure to share it with any
college students or faculty you may know who would like to read it.

Now, onto our first edition. Which is about how ISB and its peers got here, scrambling
to get 100% of their graduating students placed, and what the next three months may
look like, not just for their students, but thousands of others across all colleges in India.

Does size matter?

Numbers are impactful, but on a certain level, they are unemotional. I’ll quote the same
ISB student I introduced earlier for a glimpse into the pressure both students and B-
Schools are feeling at the moment.

“It’s crucial to get a job. Any job. The sooner, the better. They will introduce as many
days as possible till they get the whole batch placed. That’s where it’s at.”

Usually, beyond Day One, only a small number of students remain unplaced at ISB, who
are then called in on a rolling basis as more recruiters show up. But this time around,
the B-school is quietly introducing Day Two and Day Three to tackle the large numbers
anxiously awaiting a job offer.

It’s not just the number of offers that are down. The average salary package will be less
than Rs 30 lakh (US$36,000) per annum, says the industry source deeply familiar with
the developments. That’s quite a bit lower than the peak in 2022.

Murmurs about trouble with B-School placements have been doing the rounds for a
while, but things cranked up a notch last week, when panicked news rippled through
WhatsApp groups and Twitter threads that one in every six students in IIM Bangalore
(IIM-B) have reportedly been unable to secure internship placements—a first for the B-
School, according to The Telegraph.

Soon after, a spokesperson from the institute responded saying, “while we do not deny
that job market activity is lowkey everywhere, we do not see a need for alarm.”

How did India’s top B-Schools get here?

One reason IIM-B is having trouble with internship placements this year has to do with
the increase in the batch size: ~ 600 at IIM-B versus ~400 at other IIMs, an alumnus
tells us. This is also what The Telegraph’s story points out. Students graduating have
gone way up, but at the same time, demand from recruiters has gone really,
really down.

ISB, too, is suffering a similar fate, only at a much higher scale and stakes with final-
year placements.

This year, ISB’s batch has 873 students, higher than last year. In fact, since 2022, the B-
School has recorded a sharp increase in intake. If you remember, the job market was
very different back then. Companies were on a hiring spree and promising the moon to
students. The B-School put this to good use.

Quite unsurprisingly, the institute witnessed an exceptional placement season in 2022.

An all-time high average salary of Rs 34 lakh (US$40,800) was recorded, according to
its placements report. More than 130 first-time recruiters showed up.

Cut to 2023. Much like companies, B-schools too increased their headcount with gleeful
optimism. But when the going gets tough and there is an economic downturn,
companies can simply shed off employees—which they eventually did. They can stop
hiring—which they also did. But educational institutions that upped their batch sizes
cannot simply shed their students the same way.

And so they are now irrevocably stuck with a huge number of students for another year,
as in the case of ISB, whose batch sizes and total offers for the last few academic years
are in this chart below:
Terrible timing

Students are angry. Those set to graduate from B-Schools right now began their courses
in 2023, when recessionary fears loomed large. An MBA is often seen as a parking lot on
rainy days by many—because maybe you can ride out the recession doing a course and
come out with an MBA once the economic downturn has passed. At least, that’s the
hypothesis that most students go in with.

Not if you’re at ISB.

ISB is one of the few institutions in India that offers a one-year postgraduate
programme (PGP) as its flagship programme. A majority of B-Schools have a two-year
MBA. This is alright in normal times and quite frankly, is ISB’s USP as well. But right
now, it is also what is making life hell for the B-School’s placements office. Not much
has changed with the economy this year. If anything, things have gotten progressively
worse.
That said, every B-School has handled subpar placement seasons at some point or the
other. But it’s unlikely they provoked as much anger among ISB students as they have
this year.

There are two reasons.

First, ISB increased its fees from Rs 36 lakh (US$43,000) to Rs 42 lakh (US$50,300)
this year. That’s the greatest stressor for most, if not all students—especially for those
who have taken out an education loan.

Second, unmet expectations. Many students are having to settle for less and
compromise on one or more of these things: the job role, the type of company, or the
salary. With such high uncertainty when the outcome is high stakes and potentially
explosive, you do not feel like your future is in your control. Here’s another ISB student
I spoke to:

“I expected so much when I set foot in ISB. But right now, I can’t afford to wait it out. I
have to start somewhere. I’ll take up any offer that comes my way.”

A small group also spoke about how career pivots have become practically impossible.
Recruiters like the consulting firm Bains, for instance, exclusively interviewed only
candidates who already had Bains on their CV. Most companies are taking safe bets by
hiring only clear fits—people who have worked in the same industry or in a similar
functional role, or with exceptional talents, leaving no room for experimentation.
Students who came in thinking about ISB as an inflection point in their careers have
been left disappointed.

Now, what’s happening at ISB and other B-Schools are as clear a sign of a tough job
market as you can get. But if you’re looking for tactical information, like which
recruiters showed up on campus or what kind of companies are hiring, here’s some of
what we could find out.

For this edition, we focussed largely on three sectors that have traditionally been big
recruiters from B-Schools: consulting, technology, and product companies (select few
startups).

Consulting
Founded by Rajat Gupta and Anil Kumar, both senior executives at McKinsey & Co, ISB
has always been known as a consulting-focussed B-School. Thirty percent of offers last
year came from consulting firms, and the Big Three—McKinsey, Boston Consulting
Group (BCG), and Bain—accounted for a significant chunk of those offers.

“This year, the Big Three were a huge disappointment. McKinsey and BCG combined
floated 40 offers to students, almost half of last year’s number… And Bain only
interviewed students who already had Bain on their CV and ended up hiring just two
people,” says one graduate of ISB right after Day Zero ended.

A large part of the reason behind this is that both Bain & Co. and BCG have delayed
joining dates by over eight months for earlier hires. My colleague Vanita has written
about this.

An ISB alumnus from one of the Big Three firms also said that the attrition cycle inside
these firms has been disrupted.

“It is a pyramid structure and there is a healthy attrition cycle that happens. But right
now, the exit opportunities are very low. Many startups and VC firms are not hiring.
So, many people who would have normally sought out jobs outside are staying put.
This has slowed down hiring immensely.”

Other firms such as KPMG, Deloitte, PricewaterhouseCoopers (PwC), and Ernst &
Young (EY) are floating offers, but we don’t know those numbers right now.

Technology

Technology firms are the second-biggest recruiters at ISB after the consulting sector.
Because of the abysmally low hiring action from the Big Three firms, many students who
were vying for consulting jobs have changed gears and are now competing for other
roles in IT firms, product companies, and startups.

IT bellwethers Wipro, Infosys, HCL Tech and Tech Mahindra were all empanelled to
compete on Day Zero, but did not hire many. This likely can be blamed on the tech
slowdown, but surprisingly enough, Accenture was a big recruiter and if anything, hired
more than last year. “Day Zero numbers would have been much worse if not for
Accenture,” an ISB student says.
Google, Meta, Microsoft, and Apple, were absent on campus. And while Amazon showed
up, it hired in smaller numbers than earlier.

Startups

Startups’ love affair with B-Schools may be winding down and that’s got to affect
placement trajectories this year. Startups have, for a while, been the bread-and-butter
opportunities for students seeking to land product roles on campuses.

This year at ISB, Disney+ Hotstar listed themselves but didn’t show up. Top choices for
many—Swiggy, Uber, Cred, Nykaa, Games24x7, and Dream 11—were nowhere to be
seen. Instead, gametech companies like WinZo and Zynga, fintech company Navi, and
B2B startups DevRev, Medianet, and BrowserStack all hired in good numbers.