12 Feb 2019 20:11 IST

B-schools see a rise in PPOs as start-ups poach the talent

There has been an increase in the number of companies offering summer placements

Management schools have seen a surge in pre-placement offers (PPOs) in the past two to three years. According to senior officials at B-schools, there has been a rise in the number of companies participating in summer placements and in the intake of candidates per company through PPOs. PPOs are usually given based on a candidate’s performance during their summer internship.

Companies prefer to recruit candidates who came in for summer internships as they tend to get a fair idea about the student and their capabilities. Some of the top B-schools, such as IIM Kozhikode and XLRI, have witnessed a 20-30 per cent surge in PPOs this year.

IIM-K noted a 33 per cent increase in the number of candidates bagging PPOs this year. As many as 120 students out of the batch size of 366 received PPOs this year as compared to 90-95 last year, said Prof Shovan Chowdhury, Chairperson – Placements, IIM-K. “Sometimes there is a mismatch between what the employer and the candidate want. In such cases, students might quit, say, within a year. So, companies increasingly prefer the PPO route as it gives them a chance to get to know the candidate,” Chowdhury told BL on Campus.

Hedging strategy

Unlike earlier, when recruitment at B-schools was dominated by a certain set of companies, many start-ups are lining up with good pay packages now. This is why some companies are offering PPOs — as a hedging mechanism. “Companies are losing good candidates to start-ups. So, they find it (PPOs) a good hedging strategy,” said Prof Dwarika Prasad Uniyal, Dean, FLAME School of Business.

XLRI had 358 candidates in the 2017-19 batch of its two-year Post Graduate Diploma in Management – HRM and BM. Of this, 122 received PPOs, accounting for nearly 34 per cent of the total batch size. The number of candidates getting PPOs stood at less than 100 around two years ago. IMI, New Delhi saw a 25 per cent jump with nearly 50 PPOs being offered to the 2017-19 batch comprising 303 students.

“There is a clear shift towards PPOs in the past two years. More companies are coming forth for summer placements and it is having a domino effect. PPOs help candidates as they ease some amount of psychological pressure and keep them far more focussed,” said Prof Uday Damodaran, Chairperson, Placements, XLRI.

Better summer placements

Some of the top B-schools have seen a rise in the number of companies participating in summer placements. This emphasis on summer placements has translated into higher stipends for students during internships. The average stipend has gone up by 20-30 per cent on a year-on-year basis.

Despite this surge in PPOs, industry experts think that final placements will remain relevant and important at B-schools. “The importance of summer placements has certainly increased, but final placements continue to be critical for every institute,” said Ketan Kapoor, CEO, Mercer-Mettl.