The Indian Placement Reporting Standards Will they succeed?

? Executive Summary We have GAAP for financial accounting, ISO as hallmark of quality of goods, and IFRS for financial statements reporting. But there are no standards for the reporting of one of the most important parameters of ranking and selection of B-schools. Hence, the need for Indian Placement Reporting Standards (IPRS) which would not only be inclusive of global best practices, but would also adapt them to Indian conditions and needs. The standards framework is based on the guiding principle of separation of data from statistics, which means that individual level data specific to a student or a recruiter would not be shared as part of the placement report. IPRS - Will they succeed? is the question this dissertation seeks to answer. IPRS Multi-stakeholder Model was developed to analyze the impact (favorable / unfavorable) on each stakeholder if the IPRS was adopted. Primary research was conducted across various stakeholders the B-schools, Current MBA students, Prospective MBA students, Recruiters, Media and Rating Agencies. Top B-schools have the influencing power over recruiters to furnish required data. One of the hurdles to the success of IPRS is that only a handful of top B-schools are members of IPRS. As a result there is no peer pressure on B-schools to comply with the standards. Another major hurdle in the adoption of IPRS by top B-schools is the fear that the standards would be used as a marketing device by lower rung B-schools and to showcase their association with top B-schools. In order to make IPRS successful, one of the recommendations includes having a Central Agency to monitor the ethical usage of audited data. Also, the Central Agency would work fulltime to convince more B-schools to become members of IPRS and conduct training programs, sector conferences, industry conclaves and seminars for various stakeholders of IPRS. In all, it can be said that IPRS is comprehensive and well intentioned. It is a welcome step to ensure transparency, standardization and uniformity in representing placement related data. IPRS is the way forward in ensuring that current and prospective students take informed career decisions and it would go a long way in providing authentic, transparent and verifiable placement information to interested sections of society.

Harshul Savla

Jamnalal Bajaj Institute of Management Studies

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The Indian Placement Reporting Standards Will they succeed? 1. Need for IPRS At the nucleus of the B-school boom in India lays the single information parameter - Placement Data. An applicant seeking admission to a B-school gathers placement information from various sources like the media, placement ratings of ranking agencies, coaching classes, etc. Each Bschool has a different format of releasing the placement report; and this lack of standardization leads to ambiguity. The need is two-fold: transparency and comparability of placement data.

Applicant

Coaching Classes Indian Placement Reporting Standards Ranking Agency

B-school

Placement Committee

Media

Illustration 1: Vicious Circle of Data Misinterpretation The above figure shows the vicious circle of data misinterpretation. Placement Committees are generally student driven bodies. At the end of each placement season (Summer Internships and Final Placements), a press kit is released to the media. This is where the problem starts. In the frenzy to showcase ones B-school better than the rest, carefully selective data is highlighted, and the problem is compounded when the media further filters the data according to themes which would be interesting and saleable to readers. Ranking agencies use the data available in the media and provided by B-schools, to give rankings. The solution to this problem is a standard reporting format of placement data by B-schools, which needs to be audited by an independent third party auditor along with a compliance statement by the B-school stating adherence to standards and deviations if any, followed by reasons for the deviation from IPRS.
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The Indian Placement Reporting Standards Will they succeed? 2. IPRS Framework a) The guiding principle on which IPRS is based is the separation of data from statistics i.e. Individual level data specific to a student or recruiter would not be shared as part of the placement report. The conflict arises because the selected candidates and recruiters would like the privacy of their information to be protected for issues of safety and competitive advantage respectively, while the media and prospective students would expect a high degree of transparency from the placement report. The illustration given below explains the same.

Hurdle

Confidentiality of Student Competitive Advantage of Recruiter

Solution

Aggregate Statistics would be provided

Illustration 2: IPRS Framework Guiding Principle b) IPRS accommodates various placement processes followed by different B-schools. IPRS is silent on the process to be followed (placement week, cohorts, rolling process, etc.) and has left it to the discretion of the B-schools. c) IPRS seeks to provide the minimum standards making it convenient for all B-schools to adopt. It provides B-schools the freedom to make disclosures like Pre-Placement Offers (PPO) awarded and accepted; through competitions, performance in live corporate projects, summer internships and any other details as per the policies of the B-school. d) Internships are generally an academic requirement by B-schools in a 2 year regular program. IPRS only includes non-salary information for internships. Stipends would be recorded as paid/unpaid sending across a clear message that the purpose of internship is learning. It, however, captures details like job role (function), sector, location and responsibilities which would give details of the nature of the internship to the student. It is to be noted that details of responsibilities during the internship would not be part of the placement report, respecting the confidentiality of the internship project.
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The Indian Placement Reporting Standards Will they succeed? e) IPRS has introduced the concept of Maximum Earning Potential (MEP) which would replace the current practice of the reporting total Cost to Company (CTC) which is ambiguous.

Salary Head Basic pay Additional guaranteed cash component Total one-time cash benefits Total long term compensation Maximum variable pay Non-cash benefits Maximum Earning Potential (MEP)

Description Basic pay associated with the position The components are guaranteed annual payments One-time joining bonus Companys contribution in long run schemes Performance driven variable pay Various fringe benefits

Illustration 3: Compensation details to be provided by the recruiter f) IPRS provides detailed guidelines regarding International Placements#. All non INR salary statistics would be quoted in terms of USD1. To facilitate comparison of domestic and international salaries, the latter would be quoted at PPP2 (Purchasing Power Parity) adjusted exchange rate, the base currency would remain USD to aid easy comparison across B-schools. g) IPRS classifies the graduating class into two major groups those who sought placements through the institute and those who did not seek placements through institutes for reasons like candidate is company sponsored, continuing education, starting new business, joining family business etc. h) IPRS provides immense clarity in salary details Institutes would be required to disclose Minimum, Maximum, Mean and Median salary statistics of students placed on campus. Institutes can also report 80 percentile salary statistics (after removing top and bottom 10 percentile). The above 5 parameters would be reported separately for MEP and for guaranteed cash components. Also, non-INR statistics would be reported separately in USD. i) IPRS requires B-schools to release final placement reports, audited by an external auditor, three months after graduation/declaration of final results of the batch under consideration. Also, a compliance statement mentioning adherence to IPRS, version 2.0 should be mentioned. Deviations from IPRS due to lack of data or any other reason have to be mentioned as well. Audit status (cleared/pending) needs to be clearly mentioned on the placement report.
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The Indian Placement Reporting Standards Will they succeed? 3. Primary Research

B-school

Rating Agency

Current MBA Student

IPRS

Media

Prospective MBA Student

Recruiter

Illustration 4: IPRS Multi-stakeholder Analysis Model Primary research was conducted using an online feedback form (see Appendix-1) across various stakeholders (see Appendix-2). IPRS Multi-stakeholder Model was developed to analyze the impact (favorable / unfavorable) on each stakeholder if the IPRS was adopted. The respondents were required to rate each question on a scale of 1 to 4 (Strongly Disagree=1, Disagree=2, Agree=3 and Strongly Agree=4). An average score was calculated based on ratings given by the respondents. The table below illustrates the results of the research. Avg. Score
2.7 3.5 3.3 3.4 2.4 2.9 3.7

Multi-Stakeholder Parameters
IPRS balances transparency and privacy needs of various stakeholders IPRS facilitates equal comparison between B-schools on placement related data. Current students would get comprehensive placement statistics to make an informed decision. Standards provide necessary information to Prospective MBA Students to take career decisions Recruiters will be able to furnish the required data. Placement reports published adhering to IPRS would provide adequate insights to the Media. Ranking Agencies would get an Indian benchmark for placement reporting.

Illustration 5: IPRS Multi-stakeholder Research

Harshul Savla

Jamnalal Bajaj Institute of Management Studies

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The Indian Placement Reporting Standards Will they succeed? Each respondent was also asked for comments with respect to each question and for suggestions/ comments on IPRS. Summarized Multi-stakeholder Perspective based on the research conducted: B-schools felt that adhering to IPRS would increase their administrative work but adherence to IPRS would be perceived as a step towards being transparent and ethical. B-schools perceive an apprehension of being unable to get the requisite data from recruiters. It was also highlighted that in most of the B-schools, recruiters had an upper hand and B-schools did not have any influencing power. Current MBA students felt that IPRS would satiate their need for comprehensive placement statistics; however, it was also pointed out that statistics alone would not help them take decisions they recommended a need for alumni interaction. Students also highlighted the need for data on job roles offered and position in the hierarchy of the organization, as they felt that designations could often be misleading. Prospective MBA students highlighted that IPRS was silent on Lateral placement statistics, which helps students with work-experience to gauge their employability post their MBA course. Recruiters indicated that it would be challenging for them to furnish the data required by IPRS; citing company policy as a major hurdle. They also highlighted that since they recruit from different B-schools and offer pay-differential to top B-schools. They were concerned about the confidentiality of the data as it is their competitive advantage over other recruiters. Media respondents highlighted that they need to publish saleable and thematic coverage on B-schools placements. They also highlighted the need for individual level data of companies and salary offers in order to highlight sectorial and macro-economic themes. IPRS allows B-schools to publish data within three months of graduation/declaration of final results of the batch under consideration; respondents highlighted the need for timely data. Ranking Agencies indicated that IPRS would facilitate equal comparison between B-schools on placement related data due to uniformity in the presentation of the data. As Ranking agencies rate a B-school on a cumulative basis of placement and non-placement related data, they

Harshul Savla

Jamnalal Bajaj Institute of Management Studies

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The Indian Placement Reporting Standards Will they succeed? highlighted the need for uniformity in non-placement data. Rating agencies highlighted that IPRS was suitably adapted to be an Indian benchmark. 4. Hurdles in success of IPRS a) Success of IPRS to a great extent depends on the top B-schools3 complying with them simply because they have the influencing power over recruiters to furnish the required data. The same companies which recruit at top B-schools will then be more pliant if lower rung B-schools demand the same data. b) IIM A, IIM S, SPJIMR, TISS, Great Lakes and SCMHRD are a handful of top B-schools3 of the 22 members complying with IPRS. This currently is a hurdle and a major challenge in widespread adoption of the standards, as other top B-schools would not be under pressure to implement these standards. A possible domino effect can be created if most of the top B-schools comply with the standards as illustrated below:

Most Top B-schools Adopt IPRS

Peer Pressure on non complying B-schools

Media will question non members of IPRS

Pressure from other stakeholders

Brand Equity of B-schools suffers

Most B-schools will comply

Illustration 6: Domino Effect if most of the top B-schools3 adopt IPRS c) Unethical usage of IPRS especially by lower rung B-schools, wherein IPRS would merely be reduced to a marketing device as it is an easy way to be associated with premium B-schools of India. d) The key challenge to sustainability of IPRS would be monitoring by a central agency. A democratized standard will be used by B-schools in distorted versions. It will not be hard for the B-schools to hoodwink the public by claiming to follow IPRS when there is no central
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The Indian Placement Reporting Standards Will they succeed? agency that can conclusively verify the claim. IIM A has shown the way forward by publishing CRISIL audited IPRS compliant placement report for PGP (Post Graduate Programme), PGPABM (PGP in Agriculture Business Management) and PGPX (PGP for Executives) courses. 5. Role of Central Agency for IPRS The idea of IPRS is inspired from MBA CSC Standards for Reporting Employment Data. Some of the top global B-schools like Harvard Business School, Graduate School of Business Stanford, Wharton School of the University of Pennsylvania, MIT Sloan School of Management and others are compliant to this standard. MBA CSC is a full time agency which regularly conducts training for its various stakeholders. A Central Agency is required for long term sustainability of IPRS. Role space of the proposed Central Agency for IPRS would be: Monitoring use of IPRS by B-schools Examining external audit report furnished by B-schools Convincing more B-schools to become members of IPRS Conducting training programs for stakeholders of IPRS Organizing Sector Conferences, Industry Conclaves, Seminars etc.

6. Conclusion The success of IPRS lies in mass adoption of the standard by B-schools and its acceptance by all stakeholders. Research conducted indicated that IPRS is comprehensive and well intentioned. It is a welcome step to ensure transparency, standardization and uniformity in representing placement related data. IPRS is the way forward in ensuring that current and prospective students take informed career decisions and it would go a long way in providing authentic, transparent and verifiable placement information to interested sections of society. IPRS needs to have a Central Agency to ensure the sustainability and scaling of standards to include maximum number of members complying with IPRS. Awareness and training programs of the standards for various stakeholders would be the key to their long term success. Members complying with IPRS should take steps in this direction to ensure that IPRS succeeds and is widely adopted by B-schools.

Harshul Savla

Jamnalal Bajaj Institute of Management Studies

Page

The Indian Placement Reporting Standards Will they succeed? Appendix Appendix1: IPRS Multi-Stakeholder Response Name Contact Number Email-ID o B-school o Current Student Stakeholder (tick the appropriate) o Prospective MBA Candidate o Recruiter o Media o Ranking Agency o Others ( Please Mention __________________ )

Multi-Stakeholder Parameters
IPRS balances transparency and privacy needs of various stakeholders mentioned above. IPRS facilitates equal comparison between B-schools on placement related data. Current students would get comprehensive placement statistics to make informed decision. Standards provide necessary information to Prospective MBA Students to take informed career decisions. Ranking Agencies would get an Indian

Strongly Disagree

Disagree

Agree

Strongly Agree

Comments

benchmark for placement reporting. Placement reports published adhering to IPRS would provide adequate insights to the Media. Recruiters will be able to furnish required data Any suggestions / comments regarding IPRS: Harshul Savla Jamnalal Bajaj Institute of Management Studies Page 9

The Indian Placement Reporting Standards Will they succeed? Appendix2: Respondents Pool of IPRS Multi-Stakeholder Response

Respondents
Ranking Agency 2% Media 12% Recruiter 18% Prospective 20% Current Student 36% Others 4% B-School 8%

Sample Size - 75

References 1. Conversion rate for non INR salary statistics reference: www.finance.yahoo.com 2. PPP reference: http://unstats.un.org/unsd/mdg/SeriesDetail.aspx?srid=699 3. http://www.hindustantimes.com/Images/HTEditImages/Images/Top-10-B-schools.jpg 4. IPRS website: http://www.iimahd.ernet.in/iprs/ # International Placements refer to base location outside India

Harshul Savla

Jamnalal Bajaj Institute of Management Studies

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