Demonetisation is a boon for MBA placements

Published: December 12, 2016 6:50:46 AM

The demonetisation step taken by the government has brought windfalls for certain industry sectors such as e-commerce, banking & financial services and technology consulting. These sectors are expected to grow and intensify recruitment activities from business schools.

The demonetisation step taken by the government has brought windfalls for certain industry sectors such as e-commerce, banking & financial services and technology consulting. These sectors are expected to grow and intensify recruitment activities from business schools.

The year did not start on a positive note for e-commerce companies that planned to recruit from business school campuses. Last year too, there were instances of e-commerce companies who recruited MBA graduates but subsequently deferred joining dates. For instance, Flipkart deferred joining dates for IIM Ahmedabad graduates to December. Other campuses also saw something similar. FORE School of Management, New Delhi, saw Nearbuy deferring joining dates for MBA graduates from June to October. Given this fiasco, this year not only business schools but even engineering colleges were reluctant to give preferred dates to e-commerce companies. Instead, the dates were being given to traditional, bigger companies.

Now, with demonetisation, the dynamics of placements appear to be changing. Demonetisation is a boon for companies like Paytm, MobiKwik, FreeCharge, IndiaMART, ShopClues, Amazon, Flipkart, Snapdeal, etc. The current short supply of cash is expected to translate into a trend that will see more and more of digital channels being used for payments and a sharp rise in e-commerce transactions. In the coming months, some e-commerce companies could see growth that would have otherwise taken years. The likes of Paytm are already seeing exponential growth. In fact, early signs of e-commerce companies starting engagements with business schools are already visible. At FORE School of Management, we traditionally gave preferred dates only to MNCs like HUL, Asian Paints, Reckitt Benckiser etc, but now we have started giving these dates to e-commerce companies as well.

Banking & financial services is another sector where recruitment numbers are expected to rise. Banks are struggling to cope with the increased workload. Their client base is increasing. The quantum of money deposited in banks is also increasing. Interest rates are expected to go down. With interest rates going down, loans are expected to go up. At the same time, the number of high net-worth customers are also expected to go up. Additionally, banks are coming up with innovative digital payment solutions, like SBI Buddy. All this would lead to growth in the banking sector and hence more recruitment from business schools. In fact, we have seen that banks which had already recruited from business schools are evincing interest to come for another round.

If e-commerce and banks do well, the vendors providing technology and consultancy services to these industry sectors are also expected to grow. Consulting companies have been traditionally coming to business schools for picking up graduates who can service international clients. This year, we expect to see consulting firms like EY, Deloitte, PwC, etc, pick up a lot more business school graduates for servicing Indian clients. Demonetisation is leading to more online transactions and digital money. This, in turn, means more avenues in some areas such as cybercrime. Technology consulting companies expect their customers to invest more into fraud detection and hence this will be another collateral area of potential recruitment.

However, there are some sectors, such as real estate, which are not expected to do well on account of demonetisation, but then these sectors are anyway marginal recruiters at business schools, and this will not adversely impact overall recruitments.

From a student perspective, the job offers on the campus are expected to be a lot more transparent. Some companies used to promise cash bonuses, something which demonetisation will thankfully eradicate. With more transparency in packages, students will be able to evaluate packages much more objectively.

To summarise, demonetisation is good for business school placements. While the traditional brick-and-mortar sectors will not get impacted negatively, sectors like e-commerce, banking & financial services and technology consulting will recruit more students from business schools.

Rajneesh Chauhan

The author is professor and chair, Placements, FORE School of Management, New Delhi

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