B-school graduates are not just shedding their entrepreneurial ambitions, they are also shying away from picking internship offers at startups, thanks to household names such as PepperTap, AskMe and Tiny Owl shutting shop last year.
According to a survey conducted by US-headquartered human resource consulting firm ManpowerGroup, 94% of the milennials said they would look for job security first while making career choices. Millennials are those born between 1980 and 1995.
At Mumbai-based S.P. Jain Institute of Management and Research (SPJIMR), startups are no more invited for placement cycles. “ Now, there is little proclivity towards startups and it is only decreasing over the past couple of years. Earlier, we use to invite startups, but they are no more part of our placement portfolio as students want to play safe,” says Ankur Bansal, the student placement committee head, SPJIMR.
“This year, there is a sense of careful approach among students due to a few latest incidents at startups,” agrees Vishal Goyal, group head, IMT Ghaziabad and Dubai
Last year, at Xavier School of Management (XLRI) Jamshedpur, about 8% of placement offers came from e-commerce firms. This year, the number has halved.
Around 18 startups, including familiar names like Fashionara, Intelligent Interfaces and Delivree King, have closed down in the first half of this year -- a sharp contrast to last year, which saw three to four startups being launched in a day, putting India among the top three nations globally in terms of number of startups (4,200 plus).
According to colleges, though there is no dearth of students willing to take calculated risks, now they are much more cautious while making decisions. “In the wake of recent incidents where some respected first-generation startups erred in on-boarding or honouring their commitments made during campus recruitments, the student body at large has been sensible enough to take a cautious approach,” says Goyal of IMT.
In May, India’s largest e-commerce firm, Flipkart, deferred the joining dates of recruits picked during campus placements at the Indian Institutes of Management (IIMs) and Indian Institutes of Technology (IITs). The move drew considerable flak, and IIM-Ahmedabad responded with a strongly worded communiqué to Flipkart, tagging other major institutes like IIM Bangalore and IIM Lucknow in the process.
However, IIMs were not able to share the summer internship trend since placements were still not over. “We are still in the process of wrapping up the process,” according to the spokesperson, IIM- Ahmadabad.
The Indian School of Business (ISB), Hyderabad, said it does not conduct summer internships.
Uber, Shopclues, Amazon and Cloudtail were among the popular startups at campuses this year, but consumer goods firms and consultancies were the favourites among students due to their hefty packages, overseas postings and other lucrative offers. The average stipend shot up by around 7%, compared to the same period last year.
According to the placement managers, consulting firm EY increased its stipend to R2 lakh this year from R1 lakh in 2015; Godrej Group raised it to R1.8 lakh from R1.3 lakh last year; Pidilite gave a 60% hike from last year to R1.6 lakh.
Considering the squeezed funding and risks related to the launch of one’s own venture, a number of students at various B-schools had ditched their entrepreneurial ambitions during the last placement season. Colleges, too, have noticed a dip in number of students choosing entrepreneurship between years 2013 to 2016. At IIM Ahmadabad, in 2013, only 5 students (among a batch of 373) chose entrepreneurship option, which increased to 13 students (batch of 388) in 2014. Last year, 11 students (batch of 377) opted to move out of traditional placement process, whereas this year, the number has fallen to just 8 (batch of 383).