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5 lakh pursuing MBA, only one fifth employable: Study

mbaAHMEDABAD: With the uncertainty in the global economic atmosphere threatening major recession, rising cost of education and a depreciating rupee, the ever growing multitude of Indian graduates are questioning the worth of an MBA degree.

According to a nationwide study of marks secured by 2,264 management graduates, while MBA seats have increased by 30 per cent since 2007, recruiting companies found only that only 21 per cent business school graduates were employable. A similar previous study in 2007 placed employability index at 25 per cent.

The study was carried out by testing and assessment company MeritTrac and a business school portal on 100 business schools, excluding the top 25 institutes, in India to benchmark the current state of employability of management graduates.

President of the All India Management Association, Rajiv Vastupal, said, “MBA is important benchmark for anyone from a non-commercial course. The skills of MBA graduates are declining due to poor standard of mushrooming MBA schools, which do not have a proper faculty to teach. Business schools must include case studies, group discussions and problem-solving techniques instead of holding lectures.”

The MBAs covered in the survey scored in 52.58 per cent in verbal ability, 41.17 per cent in quantitative ability and 37.51 per cent in reasoning. Recruiters believe that while MBAs are better at making presentations and negotiating terms of employment, they should be open to unlearning, be self-motivated and have an open mind in order to be more employable.

Ruzan Khambatta, a tech entrepreneur, who hires MBA graduates every year, said, “The employability of MBAs have decreased because the quality of business schools has dipped. Besides better training and imparting soft skills, management institutes must ensure better interaction between students and industry. This would help in conveying the expectation of the industry to future managers.”

Management consultant Gautam Gouthi believes that MBA ensures a certain bandwidth over a non-MBA candidate for recruitment. “But it is necessary to have the skill set that companies are looking for.”

IIM alumnus Neel Shah said, “Being a Gujarati and having a family business, I always wanted to understand various aspects of the business, which I could not have achieved with a technical degree. What I got after investing two years in MBA from a reputed school was fruitful in terms of money but there have been many more intangible gains and benefits.”

India is a booming MBA market with over 3,500 B-schools and 5,00,000 students pursuing various MBA or equivalent programs.

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