Unlike many of his peers, Amit Yadav has no plans of studying further right after graduation. That’s because this second-year BCom (hons) student of Hans Raj College, New Delhi, has seen many of his seniors bag lucrative jobs during campus placements.

“Today, companies are looking for bright graduates whom they can groom for leadership positions in future. Therefore, it makes sense to take your graduation more seriously. A first class graduate degree has more value in the job market than an MBA from a second or third grade B-school,” says Yadav.

Concurs P.C. Jain, principal, Shri Ram College of Commerce (SRCC), New Delhi. “Companies nowadays have realised that academically bright graduates bring more value to the organisation because their domain knowledge is very strong. An MBA with an engineering background may be technically sound but he or she will have little knowledge about business. Therefore, it makes sense to recruit a person with an economics or commerce background. Also, such a person will be more willing to learn and be eager to do odd jobs such as data collection or sales promotion and will have no unrealistic expectations from his or her job,” he says.

That suits employers fine. “As most companies have to spend a considerable amount of money on retraining MBAs and engineers to make them suitable for the job, they might as well recruit from general stream colleges at low cost and train them on the job,” reasons Premchand Palety, chief executive officer, Cfore, a market research firm which also conducts an annual B-school survey.

Also, companies need to pay a general stream graduate much less than what they would have to an engineer or an MBA. “So if companies find that a graduate can do the same job, why will they need an engineer or an MBA,” argues E. Balaji, managing director and chief executive officer, Randstad India Ltd, the human resources firm. “I think in the past few years, companies had gone for an overkill in their desire to recruit management graduates. Now they have realised that not all jobs require MBAs. Another reason companies are keen on employing graduates is the retention factor. A graduate will probably stick around with a company for more years than an MBA for he or she will be eager to gain some experience before moving on to the next job,” he adds.

If the number of companies making a beeline to college campuses is any indication, students will have more reason to pursue a graduate degree than anything else. For example, around 50 top companies, among them McKinsey & Co, Bain & Co, Deloitte India and KPMG, selected about 160 students from the graduating batch of SRCC this year. KPMG alone hired 24 students from the college. Deutsche Bank offered the highest salary package of Rs 16.5 lakh per annum to six students. “The average salary offered was around Rs 10 lakh per annum,” says Jain.

In Calcutta, St Xavier’s College saw an influx of companies during campus placement this year. “The recession had hardly any impact on placements. Around 300 students from commerce, economics (hons), mathematics (hons), biotechnology, English (hons), statistics (hons), political science (hons) and computer science departments received offers from Google, Tata Consultancy Services, Maruti, Deloitte, Cognizant Technologies, Tata Capital, Pricewaterhouse Coopers, Wipro, McKinsey, HDFC Life, Star India, IBM Daksh, the Avani Group, the Essar Group, Godrej, Zomato, Reckitt Benckiser and Oberoi Grand. The salary offered was between Rs 2.5 lakh and Rs 12 lakh,” says Niladri Sinha, placement officer.

The story is repeated at most other colleges. At Lady Shriram College, New Delhi, consultancies, banks and companies such as Deloitte, Essex, Ernst & Young, Parthenon, Deutsche, Google and Bain made offers to 90 students. The highest offer was Rs 19 lakh per annum. At Hansraj College, New Delhi, 75 students were recruited by Google India, Ernst & Young, Deloitte India, Milestone Interactive and Verity Knowledge Solutions. And 30 per cent more companies visited St Stephen’s College, New Delhi, this year than during last year. The average pay package increased from Rs 6.1 lakh per annum last year to Rs 6.6 lakh per annum this year.

“Ideally, companies want to pick bright students for general consulting and finance positions which do not require expertise in the form of an MBA. If core-MBA knowledge is not essential for the job, it makes sense to pick undergraduate students at a lower cost. To fill the possible gap in knowledge, some companies have also instituted a work and learn programme, which allows students to earn a full sponsored executive MBA while working. The entire process works out as a cost-efficient means of hiring talent,” observes Valson Thampu, principal, St Stephen’s College, New Delhi.

This is precisely the reason some like the Essar Group have decided to build a pool of next generation managers from within, rather than recruit from B-schools at fat salaries. Essar has recruited 28 students from colleges like St Stephen’s and Lady Shriram in Delhi, and St Xavier’s in Calcutta this year and plans to train them through a 16-month management programme. Others like consultancy majors KPMG and Deloitte and fast moving consumer goods company Dabur have slashed recruitment from business schools and turned towards graduates from the general stream, points out Debashis Sengupta, professor and chairperson, organisational leadership and strategy, School of Business, Alliance University, Bangalore. He feels this has been prompted by two factors — external and internal. “The external factor is the prevailing economic scenario that has prompted companies to look at cost cutting. They have increasingly realised they are unable to match the salary expectations of management graduates. The internal factor is related to some jobs, which do not require high managerial skills. Hence, a non-MBA is preferred,” says Sengupta.

HR experts point out that companies are forced to look for talent in top colleges and universities because of the poor quality of students from most business schools. “The trend of hiring only MBAs and engineers has changed. Other than the top 30 or 40 business schools, most of the second grade and third grade management institutes are not up to the mark. As a result, students from these schools are not productive. Also, companies find that graduates from these business schools are not innovative and have pre-conceived ideas that are at variance with the actual business situation,” notes Rajesh A.R, head, iRize, the human resources arm of Manipal Global Education Services.

In fact, organisations all over the world prefer people with innovative ideas and clear thinking. “This shifts the balance in favour of general-stream college students,” says Sengupta. That should be music to Yadav’s ears.

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