Do B-School Grads See Placement Offers As An Entitlement?

Cancellation or deferred taking in of students selected at placements in IIMs and IITs by some of the E-Commerce firms have led to loud protests by both the Institutes and students. But are the students justified in demanding early appointment or hefty compensation for the delays?

Questions are being raised whether students have developed a ‘sense of entitlement’ that runs contrary to a free market economy. Govindarajan Ethiraj, Founder-Editor of Boom, an independent digital journalism initiative, feels that this ‘strange sense of entitlement’ runs contrary to the nature and behaviour of the real world outside.

In an article in Boom, he points out that several placement offers that got cancelled or postponed were from firms whose business models had come under severe pressure dependent as they were on free-flowing capital than revenues. Any student of management should realize the gravity of the situation with senior employees of such firms looking for the exit. In fact, such firms may not even last till the next year’s placement season.

Questions are being raised whether students have developed a ‘sense of entitlement’ that runs contrary to a free market economy. Govindarajan Ethiraj, Founder-Editor of Boom, an independent digital journalism initiative, feels that this ‘strange sense of entitlement’ runs contrary to the nature and behaviour of the real world outside.

Then comes the question of demand and supply. While India produces 1.5 million engineers every year, barely 7% are employable, according to the India head of Dassault Systems, Chandan Chaudhury. That suggests the job market is severely skewed towards a few and between the jobs you want and those that are on offer, there might a huge gap.

While the GDP growth recorded a staggering 7.9% in the last quarter of 2015-16, it has not led to business leaders come out with big investment decisions.

In fact, job creation is slowing down and it looks less encouraging for manufacturing. As to the argument that the nature of jobs are shifting, Ethiraj agrees but says “to believe that the nature of jobs are shifting to companies whose only reason for existence is a series of wild bets by VC firms is to ignore the very textbooks that are part of your course. Yes, innovation drives change, but not so fast.”

Regarding sanctity of agreement, he says his previous job was in a large media company that also made films. At a senior management meeting a heated discussion took place about a well-known actor who tore up a three-film contract because the first film did resoundingly well at the box office. The actor now wanted a higher revenue share from the next two films and the contract re-written. For all the legal resources that had been poured into this and other, similar, contracts, it turned out that there was little that could be done.

In yet another case, a well-known television anchor pulled out after signing a contract that had taken almost three months to prepare, mutually. “All he did was to write a sorry letter. We were upset and thought we should enforce the contract legally. That feeling, thankfully, lasted only 15 minutes and we realised quickly that it was best to move on,” says Ethiraj.

Thus, even if the companies that withdrew their offer letters are completely in the wrong, those recruited must get used to it. In a similar situation, those who complain now, when placed in a senior managerial position, would be doing the same thing, “particularly when the business cycles go against you and you have shareholders to answer to.”

Ethiraj spoke to Larsen & Toubro and asked them for their official position on why L&T Infotech pulled its offer letters. The spokesperson’s explanation was that they had issued only “Offers of Intent to prospective employees and not Letters of Appointment.” It was explicitly stated in the terms of offer.

The company stated that all stakeholders were clearly aware of the terms of the letter and applicants who cleared an industry standard test duly received appointment letters to commence their training.

Ethiraj says even if it sounds like a dodge, it should be remembered that. L&T is a blue-chip construction-to-finance major in existence from 1938, with revenues of around $15 billion as opposed to perceived market capitalisation.

“The company wants to be in business, arguably a little longer than the flip-as-you-go entrepreneur (no offense to them) with a one-billion-in-one-year-consumer-acquisition-via-newspaper-advertisements business plan,” he adds.

“To me, the fear that we want to benefit from the upsides of a socialist economy while being protected from the downsides of a free market economy is frightening, to say the least,” he says.

However, the students say that the companies come to the campuses because they want the best talent available in the country. The students have a plenty of options to choose from and it is expected that the company that is vying for the first few spots in the placement process will honour their commitments.

If the offer is contractually binding, then the companies ought to be held accountable. Placement systems in colleges often do not permit students to “hold” multiple offers. They usually need to indicate their commitment to one, sign out and wait, they add. (Image Courtesy : www.business-standard.com)