Management education has witnessed a mushrooming growth in India from just 200 MBA colleges in the early nineties to around 33001 MBA colleges today. There has been a remarkable focus and success on building capacity in management education in India2. Having trained business graduates fulfills a big need given the pace of growth experienced by industry post liberalization. The industry today looks for trained manpower in sales, marketing, HR and finance roles in large numbers. Formal training of employees in basic business frameworks and concepts is a key success ingredient in the not-so-mature Indian industry. It is important thus to find out whether the quality of education has kept pace with the phenomenal jump in quantity. Do our management graduates have the skills which are required to be employable in the industry from the perspective of language competency, cognitive skills, and functional and people skills?
Aspiring Minds is in its third year of assessing MBA students across the Nation on a standardized multi-dimensional assessments and matching them to an array of jobs in different industrial sectors and profiles. We, today, have amassed substantial learnings – both conceptual and empirical – with regard to what makes someone employable in a management or business role in a company and what skills MBA graduates bring to the table. Defining employability in these roles, which require people interaction and people management, is not straightforward. As opposed to engineering roles, where cognitive and functional skills are enough to succeed in a role, a complex mix of personality trait and spoken and written language skills (apart from cognitive and functional skills) become important in quantifying employability in the management space. For instance, a person with great spoken English, logical ability, but without being extraverted will fail in a sales role. On the other hand, till he/she doesn't have good written English skills as well, he/she may not do well in a corporate sales role.
With these learnings gathered from a large set of students and corporations, we put ourselves to the task of doing a National audit of employability of management graduates. This is in line to our commitment of reviewing higher education, similar to what we did for the engineering sector3. We embark upon understanding exactly what percentage of candidates are employable for different jobs available for fresh MBA graduates. If the employability is low for certain profiles, which skill gaps lead to this? Are students from or studying in smaller cities disadvantaged? Among functional domains, what are learning levels of MBA students? Do our MBA students exhibit basic financial literacy?
The 'National Employability Report: MBA Graduates 2012' answers these questions and many more. We sincerely believe that this report will provide educationists, policy-makers and corporations (who are all equal stake-holders) reflect and implement the right interventions to bridge the gaps. We, on our end, will strive to provide an annual report card of management education in India and helping students across the Nation by providing feedback on their skill gaps and connecting them to matching jobs.
Employability of management graduates in functional domains remains below 10%
Whereas employability for management students range between 10–20% for roles involving client interaction, it remains below 10% for any functional role in the field of HR, Marketing or Finance. For instance, only 7.69% MBA-finance students are employable in the BFSI sector, which has created a very large number of jobs in the last decade. Whereas 32% management graduates lose out because of lack of English and Cognitive skills, at least 50% students are not employable in functional domains for lack of knowledge and conceptual understanding of the domain. Given that the fundamental idea of management education is to impart functional skills to students, this calls for an urgent intervention.
Gender ratio in Indian management schools compares to that in global top management schools
The male-to-female ratio in business schools in India is pegged at 1.64, better than that in engineering schools (1.98) and worse than that for graduates (3-year degree courses, 1.09). This is similar to the male–female ratio in global top management schools, which have 30-40% of their students as females. Within the discipline of management, highest proportion of women are in the HR (MFR: 0.36) domain and least in marketing (MFR: 5.97). Even though the employability of males and females is similar, females have a dismal representation of 23% (MFR: 3.76) in business in India.
English and Finance constitute the hardest skills to attain for MBA students
For students in tier II and tier III cities, a large gap is observed in English language skills (35 score points as compared to colleges in tier I cities) and Finance (45 score points). Even if candidates from non-metro cities pursue their education in MBA schools in metros, their disadvantage in English and Finance is not completely eradicated. The gap in other modules pretty much closes. It is also observed that Finance is the hardest-to-attain skill for non-specialists (those in HR and Marketing domain). Also, the importance of English in the job market cannot be overemphasized. On the other hand, given the importance of finance education for job in the BFSI industry and the general need of financial literacy for better management of personal money, lack of finance education is certainly a big concern. We recommend that intervention in both English and Finance education be done early in the career of candidates.
At least 40% of employable management graduates are invisible to enterprises
Out of 3300 management schools in the country, more than 40–55% employable candidates study beyond the top 1000 campuses. Given a total of 1.5 lakh management students, at least 48% employable candidates are in the latter 2300 campuses. Given that no corporation has a campus recruitment plan beyond the top campuses, these candidates form an 'invisible pool'. Corporations should build mechanisms to tap into this un-tapped talent pool to fulfill their ever increasing talent requirements. Not only would that improve the quality of employees in companies, but also would provide a healing touch to this disadvantaged group, leading to trickle-down effects.
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