Is Declining Employability of MBA Graduates a Growing Concern?

Demand of MBA graduates

Demand of MBA graduatesThe concern over job prospects of MBA graduates in India is hardly new. Mushrooming of MBA institutes in every nook and corner of India, the euphoria surrounding distance-learning education, and no guarantee of campus recruitment in most middle and low-tier B-schools are fast taking the sheen away from the valued degree.

Adding to the worry is the 2014 Graduate Management Admissions Council (GMAC) survey report. It indicates that applications to MBA schools in the Asia-Pacific region are rapidly decreasing in number, with 33 percent less applicant pool in 2013 compared to 2012. This is a direct fallout of ever-shrinking and fiercely competitive job market for business graduates and the narrowing of demands of global recruiters.

Let’s focus on the reasons for dwindling employability opportunities of MBA graduates. The question to really ask is, why is the MBA degree becoming less appealing in the job market? While the reasons may be varied, here I try to highlight the key issues in the context of India.

Sound Theoretical Knowledge but Lack of Problem Solving Skills

In a rush to match up to the best industry standards for placements, the business schools are ignoring one of the crucial aspects in their curriculum: the need for imparting practical knowledge and testing troubleshooting capabilities of the MBA students. This is especially true of Tier-II and Tier-III B-schools, whose owners have paid the least attention to building an inclusive pedagogy. Instead of engaging students in brainstorming sessions and fieldwork, the institutes give regular dose of theoretical knowledge, which is often restricted to solving case studies mentioned in text books, The value does not lie only in the degree, but also in pragmatic education.

The lack of practical experience of these graduates, especially in troubleshooting or in handling crisis, makes MBA graduates less confident during placement interviews.  Srikantan Moorthy, Senior Vice-President of Infosys, in a job fair in 2014, harped on the importance of students’ technical skills such as customer engagement and high-end consulting, as the driving force behind hiring MBA graduates.

This grave inadequacy in the MBA syllabi of most business schools is affecting the graduates heavily. Like many MBA schools in the US, that have already initiated many innovative approaches, business schools in India must aim to strike a fine balance between theoretical knowledge and business skills. For instance, Duke Business School has included in its syllabi, the extensive study of a region’s business, politics, economy and culture before the students are made to visit the various MNCs, local businesses and entrepreneurs, government agencies and other business organs in that region. This helps students integrate theoretical approach with practical knowledge of the region under study. Such innovative curriculum when introduced in India, will make learning both stimulating and challenging for these young business graduates. There is also a need to get rid of the redundancy in the course content.

Need for Extensive Specialisation

One of the drawbacks of MBA institutes, which gravely affects students’ competitiveness in the job market, is the adherence to the traditional system of specialising in any of the three streams: Finance, Marketing and Human Resources or HR. This system of specialisation is blinding the students from the need for more extensive specialisation in fields, which were hitherto unknown. One of the rising demands in MBA today is in the healthcare sector. Another would be the legal analytic sector. While these sectors may broadly figure in either of the above specialisations, there is need today to extensively focus on these specialist programs per se. This not only meets the new demands in the job market, but enables a student to specialise in one particular field he/she is most interested in.

Job specialisations is a growing phenomenon across the globe today, and as creators of business graduates, MBA schools in India must definitely not shy away from this important criterion. Such in-depth specialisations will expose the students to bigger brands and fatter paycheques, as employers today look out for candidates who excel in one particular function and all aspects of it, and not for a candidate who is Jack of all trades, master of none.

Attitude of MBA Students Must Change

In order to bring about all of the above, the underlying yardstick is a necessary change in the attitude of MBA students and graduates. Experience suggests that most MBA learners, especially in the lower-rank business schools, become complacent and unreceptive to newer methods of teaching and curriculum. Since this degree costs a handsome fortune that the MBA students and families have to usually fund for themselves, there is an unreasonable hurry to complete the course at the earliest and grab a job. In this scramble, most MBA graduates do not pay heed to classes, courses and examinations. There are always exceptions, but unfortunately they do not make the rule.

What is absent is the earnest effort from both students and teachers to experiment with innovative curriculum, newer methodological means of enhancing practical expertise, each of which will magnify MBA graduates’ competitiveness in the job market. Students in these business schools, who are our future entrepreneurs, bankers and analysts, must change their approach towards this course.

However, all is not lost. We must not forget that in spite of the recession, a significant chunk of MBA graduates got employed. This must boost the morale of business and management graduates in India.


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