Lockdown has brought a new crisis for B-Schools in smaller towns. Only those following hybrid models and focusing on quality will survive
A West India-based business house was looking for an executive assistant for its CEO. The group had a business school as well. On the advice of Management Consultant and Trainer Rajiv Khurana, the CEO invited 12 shortlisted students. Khurana, along with the CEO, interviewed them, but their performance was so bad that all interviews were done within 25 minutes. Needless to say, no one was selected. "It stumped me. When they could not hire students from their own institute, how did they expect them to get placed elsewhere?" says Khurana.
In another incident, the management of one of the institutes from a small town requested Khurana to interview the 'brightest' MBA graduate for the position of training and placement coordinator at an educational institution. "I asked her to write a persuasive note in 30 minutes inviting company HRs to visit the institute for placements. She took more than an hour and all she could deliver was copy-paste stuff from the brochure," recalls Khurana.
In fact, there are institutes in small cities that deliver MBA education in regional languages. In case it is in English, the syllabus comprises theoretical concepts, and most of the times the faculty advises students to cram guides and clear exams.
"MBA is run like academics. Students passing out from a particular institute start teaching there. It's like old parrots grooming younger ones," adds Khurana.
It is not surprising, therefore, that at least six MBA institutes -Bldea's AS Patil College of Commerce (Autonomous); M.B.A. Programme, Vijayapur; Martin Luther Christian University; Mes-Advanced Institute Of Management and Techmology (Mes-Aimat), Faculty of Management, MJP Rohilkhand University; Regenesys Institute of Management Private Limited; SJC Institute of Technology - did not record even a single placement in 2020. Full-time employability aside, B-School students in Tier-II and Tier-III cities don't even get internships. "Summer trainings make a huge impact on one's career. What do you talk about in placement interviews as a fresher? It's your summer training. If you don't have it, you lose in interviews in the first stage," says Sumeet Verma, CEO and Co-founder, KopyKitab, a Bangalore-based Ed tech start-up that helps students and universities access high-quality MBA syllabus and lectures by experts digitally through their library.
When institutes do not have placements to show, fresh enrolments dwindle as well. Data from the All India Council for Technical Education (AICTE) shows as many as 197 institutes were granted Progressive Closure of Courses (PGDM/MBA) for academic year 2020/21, compared to just 59 in 2019/20. Progressive Closure means the particular institute cannot admit students for the first year during the academic session for which Progressive Closure is granted; existing students can continue though. One of the reasons why the number increased significantly this year, according to MDRA, is because AICTE asked B-Schools not to run both PGDM and MBA courses from the same ID. AICTE gives each B-School a unique ID.
"The trend of closures will continue due to weakness in business model. Some B-Schools are also consolidating by closing non-beneficial programmes and focussing more on the beneficial ones," says All India Management Association (AIMA) Director-General Rekha Sethi.
A Question Of Relevance
With MBA institutes mushrooming around the country, including in small towns and metros, supply is exceeding demand. In many cases, seats remain vacant. Post Coronavirus, the total number of MBA enrolments has declined countrywide, and survival for smaller B-Schools has indeed become difficult. But it's a blessing in disguise. The crisis will separate the good boys from the bad. It's not that all institutes in small towns are bad. Also, not everyone can study in A-listed institutes. There is a market for small-town institutes and some of them are really coping well with Covid challenges.
"Traditional institutes which focus more on quality and less on marketing are among the best in terms of return on investment (RoI). They have built brands by word of mouth. Institutes that were aggressive with marketing strategies will face challenges because budgets are limited this year. Traditional reputation will trump over marketing. Such institutes in Tier-II and Tier-III cities have exceeded expectations," says Kalpesh Banker, Managing Partner, Edushine, an education recruitment consultant.
Take the example of JK Lakshmipat University in Jaipur. Despite challenges due to Covid, the new academic session began from August 17 even for fresh MBA students. Jagran Institute of Management in Kanpur has also started its new academic session. But fresh admissions in the MBA course have to gain traction as the affiliated Abdul Kalam Technical University is yet to declare results for UPSEE MBA 2020, which is a state-level examination for admission to MBA. These institutes were quick to embrace changes and adapt to digital ways of learning. "Hybrid teaching model was there, but adopting them to a full-scale initially was challenging. But now we all are comfortable... We have a proper set-up in the institute with projectors and other ICT tools to run live online classes," says Divya Chowdhry, Director, Jagran Institute of Management.
R.L. Raina, Vice-Chancellor, JK Lakshmipat University, Jaipur, says they have communicated to students that the focus of online classes is not to complete a particular course, but to enhance their skills. "We make sure that no class extends beyond 45 minutes. The number of students in each session depends on the kind of subjects and the comfort of teachers. Skill-oriented courses such as communication have to have lesser number of students per class, while 60-70 students can be accommodated for maths and statistics," he adds.
While the digital shift has become imperative, some institutes are taking extra effort for students. Bhilai Institute of Technolgy (BIT); UPES Dehradun; Purvanchal University, Jaunpur; Kanad Institute of Engineering and Management, West Bengal; Bapusaheb Shivajirao Deore College of Engineering; and Polytechnic College, Dhule Kannada, have tied up with KopyKitab.
"There are institutes without money motives that invest a lot in infrastructure and quality of faculty. Education is a serious business. Managements with clear vision of providing quality education will stay," says Verma of KopyKitab.
Bajaj Capital, which runs specialised MBA courses combining them with professional certifications like CFP and CFA, registered a three-time growth in online courses, although full-time MBA courses registered a de-growth of 53 per cent.
Students must be aware that information in brochures is not always accurate. Khurana alleges that bribery is rampant. "I have seen institutes offering cars to HRs. In some cases, they tell them to hire students for six months or so only to fire them later. They even offer to take care of salaries themselves." Companies in banking and finance and FMCG are the top recruiters from small-town B-Schools. "MBA graduates from these institutes cater to the requirement of small companies in sales, marketing and basic IT management jobs. You don't really need an MBA for these roles," says Anindya Mallick, Partner, Deloitte India. A small number of students bag managerial or executive level roles at big companies.
"HDFC Bank has been coming for placements each year. In 2019, BYJU's also came," says Abhishek Soni, General Manager, T&P, ITM University, Raipur.
There are government internship programmes, too, for students from smaller institutes. For example, the Ministry of Housing and Urban Affairs has The Urban Learning Internship Programme (TULIP) for smart cities. "Salary may not be great, but two-three years of experience of working with the government gives them the initial push in the career," says Mallick of Deliotte India.
SMEs and local industries, too, hire students from small-town institutes. "Kanpur is an industrial area. Most companies from financial, real estate, hospitality and FMCG sectors hire from our institute locally. Firms like 99acres.com, Future Generali India, YES Bank, Policybazaar and HDFC Bank have come for placements," says Chowdhry of Jagran Institute.
Placements: The Ultimate End
Jagran Institute of Management and JK Lakshmipat University have claimed full placements for academic year 2019/20 barring those who opted out. "There was 100 per cent placement in academic year 2018/19 and 72 per cent in 2019/20," says Soni of ITM University. However, in some cases, companies have deferred job offers due to the slowdown. "Against an intake of 237,000 MBA students, around 115,000 (51 per cent) got placement in 2020. But, the reality could be in contrast due to deferred or cancelled job offers. Students with premier institutes are still fine, but Tier-II, III are major challenges," says Banker of Edushine.
Going forward, the placement season is unlikely to favour fresh MBA graduates due to the delay in academic year and the economic slowdown. However, aggressive hiring from start-ups, especially ed-tech, is expected.
Students Versus Institutes
Institutes cannot do it all. Ultimately, it's the responsibility of students also to groom themselves.
"Most students feel they are phenomenal. They don't accept that they cannot get as good a job as an IIM student. If you did not attend an A-listed institute, you will have to prove yourself on the job to grow like an IIM guy. The trouble is most of them blame institutes, not their lax attitude if they don't find good jobs," says Sanjiv Bajaj, Joint Chairman and Managing Director, Bajaj Capital.
In most cases, students from remote places and their parents choose convenience over future prospects before zeroing in on a particular institute, ignoring due-diligence. "Most businessmen and politicians have MBA institutes. It's not a bad thing, but agent-led machinery is such that they induce them towards certain institutes for want of commissions. Students must do their own research," says V.K. Khandelwal, Founder & CEO, Selective Consultants (P) Ltd.
There are three kinds of MBA institutes - government-run institutes, those run by committed educationists and institutes run by politicians, businessmen and builders. For the last lot, education is a business. If they feel they are making losses, they will shut the business. Students have to be vigilant enough to find quality in the first two categories. "If your circumstances take you to a small-town institute, you can still work hard to land a good job. The days of Dronacharya (traditional) institutes are over. You have to be Eklavya to excel in your career," says Khurana.