Financial Sector tremors and the effect on fresh graduates
The world of finance has been shaken by the bankruptcy of Lehman Brothers, the selling of Merrill Lynch, the bailing out of American International Group Inc (AIG) and the tottering of a giant like Morgan Stanley. While all this will directly affect those employed in these companies and those with business interests in these firms, it’s going to impact campus hopefuls in a big way.
Those planning to make careers in finance are quite miserable…and there are plenty of them. The last few years has seen the brightest from elite educational institutions head over to the multinational finance companies.
This survey might tells us only what IIT graduates think but I think it is safe to assume that not just IIT engineers, but also management grads (and not just from the top institutes) have been eyeing the financial sector (particularly multinational firms) because of lucrative salary packages.
The survey compared the choices (of sectors) of pre 2001 batches, with that of the post 2001 batches. These are the results:
- There was a marked decline in graduates opting for Technology, Engineering and Academic sectors, with a decline of 8 percent, 5 percent and 7 percent respectively
- The Consulting and Financial Services sectors saw an increase by 2 percent and 9 percent respectively
- A small percentage of the recent batches have opted for new fields – Media and Entertainment, Sports, Literature, Rural and Non-profit sectors.
(48 percent of both batches combined felt that opportunities for entrepreneurship are ripe today and will keep growing)
Interesting to note that the Financial Services sector saw the biggest jump (9 percent) and the Academic almost the greatest slump amongst the later batches.
Disheartening that despite a lot of jobs lying vacant in academic institutions people don’t want to go there and one assumes it is because the teaching profession does not compare well monetarily with other jobs. And few people today find the idea of a job on university campus exciting or romantic or noble.
Campus placements will be hit
So the fresh graduates will not rake in the kind of moolah their predecessors did, not in finance companies anyway. It’s not just the question of some prominent recruiters not showing up on campus as their companies have gone bust. It’s also the question of a large pool of experienced talent which is now out of a job and whether finance companies (multinational or not) will prefer to hire those with a year or two of experience rather than pick up fresh graduates at exorbitant salaries.
At IIM, Ahmedabad, 133 out of 255 students had joined the investment banking and financial services sector last March, but now no one knows what the numbers are going to look like and no one is talking.
It’s being said that middle-rung companies who couldn’t dream of hiring IIM and IIT grads will now get the chance to do so. This is bound to have a ripple effect. A strong hierarchical system exists amongst the engineering and management colleges. Companies have always been reluctant to hire from the colleges percieved to be C-grade and now with IIM/IIT grads available to smaller companies and at lower prices, it is those from the bottom rung colleges who will feel the scarcity of jobs. As for the IIMs and the IITs, they know they aren’t going to be out of a job.
Related Reading: IT companies not happy with quality if engineering graduates
Are half our engineers not good enough?
More jobs for Indians, but not for everyone!
High salaries only for those from elite educational institutions
Who produces more engineers, the United States or India?
All posts on Higher Education
(This report by Evalueserve was sent to me by a reader, Vipul)