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B-schoolers prefer tech roles to investment banks

Well-paying consulting and technology companies are now on the top of the preference list for fresh graduates of Indian Institutes of Management and other business schools.

Updated: Nov 30, 2019, 06.05 PM IST
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NEW DELHI| MUMBAI: Investment banking that has long been the first choice for B-school graduates no longer enjoys that status, according to placement data and experts.

Well-paying consulting and technology companies are now on the top of the preference list for fresh graduates of Indian Institutes of Management and other business schools.

In fact, much of the India campus recruitment by banks also is now focused towards tech talent — they are hiring from colleges like Indian Institutes of Technology as well as B-school graduates with an engineering background.

Sections of investment banking, such as mergers and acquisitions, are doing well, but areas like trading have been upended by automation, said executives at global banks. This means, demand has slowed for investment banking roles, but increased for tech jobs

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"Markets in Europe, the US and China are challenging,” said Kanwal Kaul, a director and the head of group resourcing at Royal Bank of Scotland (RBS) in India, attributing this to the economic downturn and trade wars.

RBS’ B-school hiring this year is in line with last year, he said. At HSBC, its head of human resources in India Vikram Tandon said that while hiring from B-schools had increased, that for investment banking roles had been similar to the past two years. HSBC has doubled hiring of tech grads in the last two years. RBS has a programme specifically for B-school grads with a tech background.

Banks and NBFCs are getting increasingly disrupted by fintech and ecommerce companies. They too are building or strengthening their own platforms to deal with the challenge and need people with technology skills to drive these initiatives, said industry executives.

“We have emphasised as a company to have a much stronger software engineering discipline,” Lori Beer, the global chief information officer at JPMorgan Chase, told ET during a recent interaction. “The way we build technology today is pivoting back to having small teams and being deeply technical with our solutions.”

Technology now underpins everything a bank does, said Kaul of RBS. At the bank, tech graduates account for 60% of entry-level hiring, he said.

But competition for this talent is stiff, from companies like Google and Amazon that pay “twice or thrice” as much as banks, said a recruiter, who asked not to be named. “Tradeoffs have to be made based on what you can pay and what is the right thing to pay.”

Batch size at B-schools has been increasing every year, but hiring of investment bankers has not been increasing as fast. At IIM-Ahmedabad, the number of people hired per company in the investment banking, private equity and markets sector (which the institute separates from the BFSI Sector as a whole) has reduced, said placement coordinator Amit Karna.

However, the overall share of this sector in campus hiring this year has increased, because the institute has attracted a larger number of recruiters.

Top institutes are able to attract a bigger number of recruiters due to their pull and brand name. IIM-Calcutta’s chairperson of placements, Abhishek Goel, said the institute had seen more offers from the BFSI sector because it had attracted new companies. There are more recruiters hiring, but the numbers for most are fewer than last year, he said.

The dean of placements at Management Development Institute, Gurgaon, Kanwal Kapil, said based on early trends, he expected no improvement in the job offers from banks, compared with last year’s 25.7% share in the final placements.
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