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Dr. Arindam Chaudhuri, Editor-in-Chief, 4Ps B&M Chief Consulting Editor's Desk
Rajita Chaudhuri
Dr. Arindam Chaudhuri, Editor-in-Chief, 4Ps B&M Editor-in-Chief
Dr. Arindam Chaudhuri
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THE MBA JOB MARKET
Asia is The Silver Lining!
Jobs are Back. Packages are Back too. The MBA Job Market is Finally Reviving. But Asia is The Silver Lining which all MBA Aspirants should be Watching Out.
Issue Date - 16/06/2011
 
During the global economic meltdown, the US economy witnessed the loss of 8.8 million jobs. Fresh MBA graduates were the worst hit as they failed to secure a job. On the other hand, applicants who had enrolled into an MBA program assured themselves by presuming that by the time they pass out, an MBA degree would end up adding tremendous value to their resumes. What they did miss out was another looming crisis that would consume their careers – in the past five years, the US has made up for only 15% (1.3 million jobs) of the loss!

The after effects of the recession left a strikingly vast gap between the pay packages that companies were offering during the pre and post recession periods to MBA graduates. A recent study conducted by John J. Heldrich Center for Workforce Development at the Rutgers State University of New Jersey in May 2011 titled ‘Unfulfilled expectations: Recent college graduates struggle in a troubled economy’ showed that the median starting salary earned by college graduates in their first job was $30,000 in 2006 and 2007 whereas it dropped to $27,000 for those coming into the work force in 2009 and 2010. Interestingly, the report also revealed that men take away significantly more money than women – a difference of almost $5000.

Considering the MBA job market in US, the situation was the worst. In case you happen to be one of those who have unflinching faith in the research driven authenticity of Western management education, then sample this. Darden School of Business at the University of Virginia is considered one of the best B-school globally. However, at the end of February 2010, only 64% students could secure a job. That’s 5% lower compared to placement records for the class of 2009 and 17% lower than the pre recession class of 2008 according to data compiled by Bloomberg. The situation got so worse that alumni had to be contacted for assistance; something unprecedented in the history of Darden.

 
In 2009, the hiring landscape in India was no different. Average B-school packages plunged by 25%. In fact, the Indian School of Business could only place 57% students thereby extending the placement period indefinitely. However, things are now turning pleasant as far as Asia is concerned. Results of the Employment Outlook Survey (Conducted by global recruitment major Manpower) which interviewed 64,000 human resource and recruitment managers concludes that “India, Taiwan and China are the best places to look for a job in 2011”. The survey further reveals that 42%, 40% and 37% companies in India, China and Taiwan respectively plan to increase their employee base in 2011. Confirming these statistics is the McKinsey Global Survey conducted in 2010 which states that “executives globally expect roughly half of their business to come from emerging markets”. Speaking to 4Ps B&M, Robert Kozinets, Professor of Marketing at the Schulich School of Business agrees that “We are increasingly moving into an era wherein developing countries will drive the next phase of growth for the global economy”

Clearly, global business dynamics are evolving as developing nations experience phenomenal growth due to their inherent economic structure. Although average salaries of Indian B-school graduates continue to be in the $30,000 range, anecdotal evidence pertaining to change in form and factor of Indian B-school packages does exist. For instance, Deutsche Bank made a record offer of $300,000 to a student of IIM-C in 2010. The Indian Employment Outlook Index (an indicator of employment growth) rose by 21% indicating an upswing in recruitment activity across sectors.

So what does all these mean for the discerning MBA aspirant? The answer is pretty straight forward. For now, India is one of the most favourable job market to start off a decent career. This is the place which corporations look forward to as their next growth engine. All that can be advised to students graduating is to thoroughly contemplate the kind of job responsibilities and profile they are looking for. A clear cut vision of what you want to achieve is what will put you on the road to success in the long run.

          
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