B-school grads shunning jobs at manufacturing firms
Rediff - India
The Indian manufacturing sector today hardly recruits
management graduates from premier institutes.
The flip side: most management graduates do not want to work
for manufacturing companies either.
Reason: Management graduates say that the pay is comparatively
low in manufacturing firms and career growth is slower than in
other sectors.
The irony: Most management graduates from premier Indian
management institutes are engineers.
So, today, you have the spectacle of an engineer from a
premier engineering institute increasingly selling soaps and
detergents in a fast moving consumer goods company.
Says Delhi-based Shailendra Choksey, whole time director at J
K Corp and a cement industry veteran, "This is not new.
Typically, management students prefer to go with sunrise
industries. About four to five years back the manufacturing
sector was not doing well and there was a lot of hype around
the IT sector. Moreover, we found that MBAs from premier
institutes never stuck on and their commitment levels were
very low."
Statistics bear this trend out. While the 2005 admission
season has just begun, in 2004, 28 per cent of all IIM
students preferred to be in the BFSI (Banking, Finance,
Securities and Insurance) sector, while 29 per cent preferred
jobs with IT companies.
Another 11 per cent took up consulting assignments, while the
others preferred to work in marketing functions. An
approximately 70 per cent of all IIM graduates in 2004 were
engineers.
Says Choksey, "Now we prefer to recruit from tier-II and
tier-III management institutes. The managers from these
institutes have an ear to the ground, are able to interact
better with our target audience which is typically rural and
semi-urban, are more committed to their jobs and they also
stick with the companies."
B V R Subbu, the outspoken president of Korean carmaker
Hyundai's Indian operations, points out that the main issue is
affordability. "Indian manufacturing companies or for that
manufacturing as a sector worldwide cannot afford to pay the
kind of remunerations to these management students from
premier colleges like consultancy companies can. The business
models are different and affordability is an issue."
"Moreover, now many of these students think it is below their
dignity to work for manufacturing companies. So that could be
another reason why manufacturing companies also typically do
not venture out to these campuses. It is a very strange
situation," Subbu says.
Agrees Prof Atanu Ghosh, who heads the management school at
IIT Bombay: "Manufacturing has become blue collar today. And
management students from premier institutes today do not stick
on to a job for too long. The attrition rate is very high and
hence the manufacturing industry is not interested. This
apart, pay packets in manufacturing are very conservative
compared to other sectors and career growth in manufacturing
can be excruciatingly slow."
"Manufacturing companies today need not visit tier-I
management school campuses because the quality of students
from tier-II institutes is unbelievably good. Moreover these
students are willing to soil their hands, are more realistic
and realise that they cannot be in the boardroom in their
third year with the company," says G D Sharma, vice president,
human resources development, Larsen & Toubro.
"Importantly, they realise that since they are not from tier-I
schools their opportunities in the outside market will largely
depend on how well they do in their current jobs. So the
tendency to shift jobs is much lower," Sharma points out.
Ghosh also gives a very interesting spin to why manufacturing
today does not need MBAs from premier institutes any more.
"Today manufacturing is technology-dependent and there are
high levels of automisation in every industry. Technology
drives everything. And you can train anyone on
technology-related matters these days. So why should you pay
for a management guy from an elite institute?"
At the other end of the spectrum is a multinational IT
services company like Cognizant Technology Solutions. For the
fifth consecutive year, Cognizant emerged as one of the
biggest and the most preferred recruiters of MBAs from premier
B-Schools in India -- IIM Ahmedabad, IIM Bangalore, IIM
Lucknow, IIM Calcutta, XLRI (Jamshedpur) and ISB (Hyderabad).
The IT firm enjoys the same slot as global management
consulting and FMCG companies across these six premier
B-schools.
The company also has a high ratio of MBAs. It has one MBA for
every 30 professionals in the company. Overall, it has over
550 MBAs. Apart from recruiting MBAs from campuses in India,
Cognizant also recruits MBAs from prestigious B-school
campuses globally, including MIT, Carnegie Mellon and Columbia
in the US and Asian Institute of Management at Manila.
"Cognizant has gained immensely from B-school recruiting,"
said R Chandrasekaran, Managing Director, Cognizant, who
himself is an alumnus of IIM Bangalore. "We believe that our
annual customer satisfaction survey (CSS) scores have been on
the ascendant each year partly because of the B-school
graduates we deploy in different roles. Their domain depth has
helped us marry domain knowledge with technological excellence
and has helped us pro-actively farm-out solutions to business
pressure points of customers, rather than mere technology
solutions."
"We have also been able to calibrate the dominant role they
have played in winning new customers and in client-facing
roles they have taken up, especially as client partners or
relationship managers. As such, we see our investment in MBAs
to be a critical differentiator for us. We would continue to
make significant investment in such professionals as we have
realised the value they bring to us and continue to bring to
us," added Chandrasekaran.
So is the manufacturing industry and top tier MBA separation
permanent. It would seem so.
As Aarthi Srinath, an Indian School of Business graduate and a
senior business analyst at Cognizant software points out, "I
joined Cognizant because it provides one of the most sought
after and well-differentiated job profiles for B-school
professionals -- in areas of business development, opportunity
assessment, relationship management, corporate development,
and domain excellence, and it does not use management
professionals for pure technology assignments."
Can traditional Indian manufacturing companies match up? It
would not seem so and the separation has been mutually
beneficial too with graduates from second rung institutes
gaining.
"A decade and a half back there was this problem that everyone
wanted to recruit only from the big institutes. And the demand
was such that these guys would just not stick on. This
behaviour ensured that companies like ours had to go looking
to tier-II institutes. And today it is like a loyalty
programme. We keep going back to these same institutes as
their graduates have stuck with us," says the HR manager at a
steel manufacturing company.
According to Nirupama V G, Vice President at Bangalore-based
human resource firm, Team Lease, which offers recruitment,
training and temping services, the divorce is complete. "The
cost proposition is not attractive for manufacturing
companies. Today the talent availability is such that even in
tier-II and tier-III institutes you get very good graduates on
the first day so why go to tier-I institutes.
But she has some advice. "I would always recommend that the
management graduates get some 'meat in the job' kind of
experience. That kind of experience typically comes only from
a manufacturing industry. So before they join a consultancy
organisation like McKinsey, it always makes sense to get this
kind of experience under the belt." |
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Courtesy: Google News
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