The folly of conditional PPOs

Written by Saral Mukherjee | Updated: Oct 18 2010, 16:38pm hrs
Pre-placement offer (PPO) is one of the dreams that drives students in business schools. What more could be a signal of quality than a PPO from the company where you did your summer internship It signifies that you are being valued by the company for the contributions you made during internship and the company sees so much potential in you that it gives you an open invitation to join them after you graduate. It makes you comfortable about your financial position, it makes you a star back home and, more importantly, it gives you that unmistakable feeling of being loved. You are on a high. Yet, for some, this dream can turn into a nightmare if it is a conditional PPO.

A company giving a PPO makes a commitment to a student but the student still has the choice to sit for interviews with other companies during the final placements and he/she could take up other, lucrative, offers, too. This is often perceived as unfair by some recruiters and they have devised a coping mechanism. The recruiter will give out a conditional PPO where the student is offered a PPO but at the same time is given a tight deadline by which the offer must be accepted, else the offer would lapse. The student now has a dilemma. If the PPO is accepted by the student then he/she cannot sit through the final placements. If the PPO is rejected then the financial comfort, star value and feeling of being loved are replaced by heightened uncertainty and a nagging anxiety of whether a right choice was made.

The more the recruiter thinks that the student will value other recruiters, the more the drive to convert the PPOs into acceptances. The pressure on the student keeps on mounting as the deadline nears, aided by rumours that students in other institutes have already accepted the PPO. A conditional PPO is like a shotgun marriage with the recruiter holding two gunsone aimed at the student and the other at the institutes head. The fear of job loss and the resultant less than 100% placements may result in the institute, in turn, cajoling the student to accept the PPO.

We, at IIM Ahmedabad, have consistently refused to accept conditionality in PPOs offered to our students. To understand our position, think of the situation where most students have PPOs and firms force students to accept the PPOs. In such a situation there would not exist any final placement process as the summer placements become, in effect, the final placements. Summer placement interviews are scheduled within a few months of joining the institute and the student may not be aware of or exposed to the variety of courses or domains to make a career choice. The grades may not have been announced for the few courses the students may have enrolled before the start of summer placements.

In effect, the recruiters are not judging the student on anything that the student has learnt in the business school. Education, therefore, could become a farce and we might as well give the students a final placement the day we give them admissions!

In 2009, we faced a lot of pressure from companies who wanted students to accept the conditional PPOs and several even threatened to withdraw from the placement process if their demands were not met. It was a very difficult year as there were very few companies that were recruiting. We were in a dilemma. On one hand we risked losing the few jobs that were on offer and on the other we risked losing our principle of student choice if we allowed the recruiters to force the students into accepting PPOs. We took a conscious decision and told every recruiter giving conditional PPOs to take the offer back. There simply does not exist anything called a conditional PPO in IIM Ahmedabads dictionary. We are absolutely fine if an offer is not made rather than a conditional offer that restricts the freedom of the student to choose.

No one gains by restricting student choice. While the loss for the student is obvious, the loss for the recruiter is unobserved but real. A student who is forced to join a company due to a conditional PPO may leave within a few months of joining. Such attrition is costly and wholly avoidable. On the other hand, a company that gives an unconditional PPO and is still able to hold on to the student knows that the student joined because of attraction, not compulsion. By allowing the student the ability to choose, the company may actually lower its attrition rate attributable to wrong selection in recruitment. It is time that recruiters realise the folly of conditional PPOs and focus on recruiter-recruit fit rather than certainty of recruitment numbers.

Today the job market is once again buoyant and PPO numbers have increased considerably from last few years. I just hope that Indian business school students who have PPOs have a nice time and nightmares do not haunt them. I also hope recruiters realise that the best way to attract and retain quality talent is to allow freedom to choose.

The author is chairman, Placements Committee, IIM Ahmedabad