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Part I
But is this fairy-tale-like situation real? Why are foreign companies keen on hiring talent from the IIMs? Are they really offering the IIM grads the world's best managerial jobs? Or, as happens most often in the IT industry, are they hiring them to function as cheap labour doing
low-skill jobs?
"We have skills comparable to the best in Harvard or Wharton, that's why
they are picking us up," says Samanth Dutta, 26,who has been hired by the
Deloitte Consulting Group for their American practice.
"Of course, they all get stress-laced jobs which need sound analytical
skills," huffs a visibly indignant Praveen Kumar Choudhary, external
relations secretary of IIM-Calcutta. "In consultancies like MMG, they
perform strategic roles which require them to look into the whole industry,
have the right perspective, use lots of data to substantiate the
recommendations given to the clients. Companies like Lehman Brothers, who are
one of the best investment banks in the world, require highly skilled
personnel for their operation. They must be knowing in and out of the whole
financial fundas. Lehman Brothers and Mitchell Madison Group hired a total
of seven of our graduates, paying them $130,000 annually."
"If I were to find that I had been hired to do a low-skill job, then I
would quit immediately," said Shashank Raghuvir Kothi, 25, president of the
IIM-B students' council, who picked up a job with J P Morgan at a salary he
had not yet been told. "Besides, there is no such thing as cheap or
expensive consultancy: whatever any of these premier
companies offer had better be good."
"The type of job that I am supposed to do, I can be assured of getting
fired if either my skill levels or my knowledge levels are found to be
wanting," says Rajnil Mallik, one of the seven students hired as an
associate by MMG for their New York office. "The IIM curriculum undergoes
constant review. Irrelevant courses are dropped, meaningful ones are added,
and so emerge as the world's best talent, really. Second, I guess success
of Indian talent abroad has shown that we are some of the most intelligent
and hardworking people. I am not surprised that the world has finally woken
up and is taking notice. However, I am aware that there are some jobs
offered by US companies which look at India solely due to the incongruous
labour markets in the two countries. I am sure that these jobs offer
correspondingly lower salaries."
Experienced management consultants and an analysis of management consulting
firm recruiting at Wharton also indicate that Mitchell Madison or MMG could
be better classified as a third-tier consulting firm.
McKinsey, BCG and Bain make up the first tier. Andersen Strategic Services, Monitor, Booz
Allen, Mercer, etc, make up the second tier. MMG comes way down in the list.
Salary and reputation are inversely proportional (the big-name firms pay
the least because when you have McKinsey or BCG or Bain on your resume
after you quit consulting, it goes a long way.) McKinsey hired 61 people
out of Wharton, and Bain and BCG hired 23 each (Bain and BCG are about a
third of McKinsey's size, so the ratio makes sense). MMG hired three or less.
The top consulting package would be $190K (including the sign on bonus)
plus the annual bonus (which can be about 30 per cent). A first-year investment
banker on Wall Street would make well upwards of $200K (including their
bonus that is typically the main component of their compensation).
Obviously, Indian management graduates are not getting the cream of the
jobs.
So are the jobs these young people are picking up really the hottest in
the world? "What are the hottest
job opportunities for a new MBA grad from Wharton or HBS or the Stanford?"
asks Srikant Gokulnatha, an engineer from India who did his master's degree
from Wharton, worked for a while for BCG and is now with a dot-com company.
"They are not Goldman Sachs or BCG or McKinsey
or Morgan Stanley (as the case was three years ago). It is the no-name
dot-com Internet start-up with a great business idea and ten employees and
with venture capital funding from Kleiner Perkins or Sequoia or Benchmark
or Mayfield. They are the up-and-coming post-IPO technology companies that
have the leaders, the vision, the technology and the drive to change the
status quo."
Interestingly, the fad of joining start-ups has hit the IIMs too, but in a
small way, and only in those cases where all other factors, like dollar
salaries, stock options and jobs in the US, are equal.
IT start-up Fatwire of the US hired 10 students from IIM-Lucknow to work in the field of
technology, quality assurance and business development. "I opted for the IT
start-up Fatwire in the US after careful deliberations about the whole lot
of companies that come to our campus," says Amitabh Nandan of IIM-Lucknow,
originally from Patna. "It was not an impulsive decision. Start-ups were
very high on my list because of the opportunity and learning they provide."
But many students who join companies like Fatwire seem to be joining as Web
and software developers, not in the management stream, which makes one
wonder whether the IIMs are just another route to going abroad to do
software development.
"I always wanted to work for a start-up," says
Rajdeep Dua, who joined Fatwire with Nandan. "Fatwire was my dream company.
In my first job, I was looking for a job with a lot of responsibility and
job content. Money was important but not the first criteria. I am to be
based in New York as a software developer. I opted for the IT company because
I love working in Web technology and there is hardly any difference between
theory and practice."
In general, though (and you can look to magazines like the Industry
Standard for more insight on this), management consulting firms are having
a
harder time recruiting at the elite US business schools. McKinsey, BCG and
Goldman Sachs will always attract the best but things are rougher for the
rest. In fact business schools are finding it harder to hang on to their
students who often quit in the middle of their studies to start their own
businesses. The
eventual graduates increasingly tend to either join dot.com companies or
start their own ventures, so US companies are now willing to be more
unorthodox in searching for talent. In terms of opportunities and financial
rewards, it is much more attractive for top tier US MBAs to work in the
high-tech Internet world.
The compensation levels are often different for Indian MBAs and US MBAs.
For instance, MBAs in the US get hired as
consultants, MBAs in India tend to get hired as senior associates which is
a level below. This is more a reflection of experience (the US business
schools require a lot more experience when you apply) rather than anything
else. Top tier management consulting firms such as McKinsey and BCG have
extremely high standards that are non-negotiable so the hires from India
are capable of performing at the same level as any of their peers from
outside of India, once they get equivalent business exposure.
Some more questions surface:
The institutes themselves seem to be making little effort as yet, unlike
the IITs, to motivate their alumni to start contributing to their corpus
funds, as several faculty members admitted informally to rediff.com.
"Until 1991, we were just a training ground for the PSUs," says Raja Sengupta, who
became the second highest paid graduate of the Class of 2000, with his job
at $ 130,000 per annum from the Mitchell Madison Group, at their New
York office. "Our alumni have not been around for long enough to have
earned enough to start paying back big money to the IIMs. After all, even a
highly paid employee of a big company only remains a wage earner. It is
only the very successful entrepreneur who can afford to make big financial
donations to his old college."
And very few of the IIM products seem to ever become entrepreneurs. Shashank
speaks the mind of most of his classmates and seniors when he admits
candidly : "If I am earning the equivalent of Rs 1.5 million a month, why
would I ever want to take a risk and try breaking out on my own?"
IIM grads insist that money is not an important selection criterion for them, but
their reluctance to strike out on their own, even some years down the line,
even after gaining experience, contradicts their claim. "I was looking
for a job which offers the thrill of working, public acclaim and financial
comfort," says Vivek Saxena, another student hired by Fatwire.
The other issue that remains dormant, but extremely pertinent, is that
engineers continue to be the single largest group amongst the student
population of the IIMs, with IIT engineers being far more in number as a sub-group. The question whether engineers, especially from premier
institutes like the IITs, are really being wasted working for MNC banks or
consumer product companies, after going through the IIMs, still remains
unanswered.
Yet the entrance test itself is designed to judge the skills of
quick calculation that engineers would have, as against commerce or social
science graduates. Again, this is like wasting MTechs to do coding, just
because the hirer can afford to hire them, and they are available. Are not
the IIMs too contributing to wasting education subsidised heavily by the
tax-payer on low-skill jobs, just because they pay well?
"If one can create substantial value even by working in a bank, I do not
see how the question of wastage comes in," argues Mallik of IIM-C. "IITs
provide much more than engineering education. They teach you discipline,
how to interact effectively, the value of teamwork. This is what companies
around the world value so much, because to run a business based on sound
commercial judgement, you cannot afford not to be disciplined."
Adds Sachin, a first-year student and placement representative of IIM-L:
"The best jobs in the country go to the IIM graduates, so even the IITians
want to be there. Secondly, IITians who have gone through the IIMs are
perhaps the best intellects in the country or at least the best talents
left in the country, so the companies show a high preference for them.
Thirdly, many jobs today like those of managers in IT companies and consulting firms
require you to have a technical/engineering background as well, so their
education is not really wasted but in fact leveraged. Besides this, if an
engineer does not wish to remain in the technical line, his education is
wasted already. The IIMs at least salvage the manager in
him, because the hard fact is that an IITian who wants to remain a techy
will run away abroad at the first opportunity. That is a greater loss to
the country."
Part III: IIM's most-sought-after graduate
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