What’s Slowdown-Proof? India’s IIMs Maybe

India’s economic slowdown has hurt many. The government’s finances are strapped. Corporate earnings are growing slower than before. Households are watching their consumption.

But a small pool of students attending India’s premier business schools—the Indian Institute of Managements—appear to have escaped unscathed.

Indicators coming in from the IIMs, which are in the midst of the placement season, suggest that fears of the slowdown hitting these elite business school students have proved to be unfounded. And the students, still fresh from reading their management textbooks, have their theories about why.

At IIM-Ahmedabad, the third cluster of the final placements was concluded on Friday. 153 firms participated in the placement process compared to 123 firms last year. Median salary this year is above Rs 30 lakh per annum for a one-year MBA and the mean salary for a two-year MBA is likely at over Rs 26 lakh per annum, said Amit Karna, the placements chairperson at IIM-Ahmedabad. These are in line with the previous year.

The companies coming for placements include the regular suspects and several new companies as well. From global financial giants, like Goldman Sachs and JPMorgan, to consulting firms such as McKinsey & Co. New recruiters this year included Blackstone Group and Strategy& (formerly known as Booz & Co.) Avendus made the highest number of offers, followed by JPMorgan, the institute said in a release.

There is fierce competition between companies to attract the top talent pool of the country. In a year of an economic slowdown, a company may have incentive to recruit more if it believes that other companies will go slow on hiring. This, the company may think, gives it improved bargaining power.

But if other companies think the same way, the competition would push up salaries, Karna said.

At IIM-Bangalore, the placement season saw 518 offers, leading to all 428 students being placed over three interview days, the institute said in a press release. Last year, 411 students received 488 offers. There was a 6.14 percent increase in the total number of jobs offered compared to the previous year, said Dinesh Kumar, chair for career development services at IIM-Bangalore.

For this institute, the largest offers came from Accenture, followed by the Boston Consulting Group. In total, 147 offers were made in consulting. Other active hiring sectors were finance with 42 offers and e-commerce with 32 offers.

Vikas Srivastava, chairperson of corporate communications and media relations at IIM- Lucknow, which also concluded a successful placement season, had his own way of explaining why premier schools didn’t get impacted by the slowdown. Srivastava likens it to “dividend signaling”.

At IIM-Calcutta, 439 students received 492 offers from 136 firms participating in the placements process.

The average salary for IIM-Calcutta stood at a record Rs 28 lakh with the median salary at Rs 25.5 lakh, the institute said in a release on Monday. “The average salaries for the top 10 percent and the top quartile of the class were recorded at an all-time high of Rs 54.5 lakh and Rs 41.8 lakh per annum respectively,” it added.

IIM-Lucknow saw 100 percent placements for its 443 students in record time, according to its final placement report. Of the 447 offers made, the highest number of offers came in the categories of consulting and general management, while 85 offers came from the financial services sector.

The mean salary stood at Rs 24.25 lakh per annum and the median salary was at Rs 23 lakh at IIM-Lucknow.

IIM-Kozhikode also saw 100 percent placements in five days for its 413 participating students. The institute witnessed a 12 percent increase in the mean salary and 12.4 percent rise in the median salary from last year, according to a press release by the institute.

At IIM-Kozhikode, the mean salary increased from Rs 20.6 lakh to Rs 23.08 lakh per annum, while the median increased from Rs 18.5 lakh to Rs 20.8 lakh per annum.

Contrary to the gloom and doom surrounding the sector, traditional banks extended more than 65 percent of the total offers coming from the financial sector, the institute said in a release.

Shovan Chowdhury, the placements committee chairperson at the IIM-Kozhikode, said there was palpable nervousness going into the placement season. Several companies held competitions among premier institutes to cherry-pick students. Companies were more careful in shortlisting students. But, fearing a slowdown, even business schools were more aggressive in making pitches to prospective recruiters, Chowdhury said.

Campus placements can work as forward indicator for the economy, said Rituparna Chakraborty, co-founder and executive vice- president at TeamLease services. The signal from the top-tier placements is that organisations remain optimistic about India.

Also, organisations have to build a talent pipeline and when they fail to recruit even in one year, it creates a vacuum in the company’s talent pipeline, she said. While the IIMs have an old school glamour about them, in recent years, several new schools have been attracting good recruiters as well, Chakraborty said.

This story has been updated to include statistics from IIM-Calcutta.