The Ubiquitous MBA : Time to Burst the Bubble

11th March 2020, Kolkata I managed to get an Uber from airport after a long wait and few cancellations. I was pleasantly surprised by the uber driver who was polite and smart young man. Som (name changed for the article) was unlike the cab drivers we meet often, he was curious to know what I do, where I work, what I have studied. In our conversation it came out that he was an MBA from a college in Kolkata. He also spoke of the dreams he had before doing and MBA and the hardship the family went through to get him the degree. The placement scene in the campus was not that great, he got a customer service job in a BPO which paid really low. He had to look at other options and uber was suggested by someone in the family and he was liking the flexibility and potential to earn. He enjoyed talking to his customers and was thinking of doing a course in travel and tourism when he has some saving. I am sure there are others like Som in India Uber and Ola kind of gig employment after their MBA.

When I was with Airtel, in my market visits it was quite common to find a store manager to be an MBA, on questioning the practice of employing overqualified people and digging deeper we realised it was common employment trend for tier 3-tier 4 campuses and almost every big brand outlet was employing them. One will find ITES and BPOs filled with MBAs employed in customer service and sales jobs which can ideally be done by a high school / 12th pass out.

As per the ASSOCHAM report published in 2016, barring a handful of top business schools like the IIMs, most B-schools in the country are producing sub-par graduates who are largely unemployable and therefore earning less than ? 10,000 a month, if at all they find a job, a report has pointed out. Only 7 per cent of MBA graduates from Indian business schools, excluding those from the top 20 schools, get a job straight after completing their course, the report found. The report observed that while on an average each student spends nearly ? 3-5 lakh on a two-year MBA programme, their current monthly salary is a measly ? 8,000 to ? 10,000.There are at least 5,500 B-schools in the country at present, but including unapproved institutes could take that number much higher, the report said. 

In 2012, Pune, we had a household help , a cook Sumita. She used to cook in 4 houses in the same society, was quite hardworking and disciplined person. Sometimes I would encourage her not to work in 4 houses but do it for 2 as it was a lot of running around for her, also she looked to be from family where there was not real desperation for money. Her husband was employed in a Pune Municipality and had a decent income. She explained to me how cooking for four families earns her more money than working for one household. Her whole income was spend in higher education for her children, She was particularly proud of her son doing MBA from one of the local MBA Colleges. We moved to Mumbai and she informed us happily that her son has got a job that pays 2.5 lacs per annum. I did not had the heart to make her see that Cooking for 4 families she was making 20,000 per month. 

In last decade we experienced addition of many more IIMs and deterioration in overall quality of education. The minimum benchmark of quality expected from IIM PG Diploma holders were seriously compromised. Even in the old and reputed IIMs the quality follows the normal distribution curve the quality standard of lower 50% student from employment perspective is challenge. In my own teams I had people from different MBA colleges, while there was premium both in terms of salary and entry level for premier institute MBA, many at times it was really midcult to justify. Some of the MBA’s from non-premier institutes and some engineers did equally good jobs being paid lesser. In my conversations with leaders across industry there is similar feedback. When I was in TISS our HOD used to scold us for not appreciating the opportunity of studying in TISS and used to challenge us to remove the TISS tag and get the jobs in market and evaluate our own market value. We would laugh at it that point of time but it is so true. If performance on the job is the filter and we assess for jobs really requiring management or specialisation education I can challenge that 30% to 40% of the premier institute MBAs will get filtered out.

There is also a trend of employing Premium Institute Management graduates in the jobs which do not require that level of education. While many claim for this to be training ground for operations and leadership in the future it tends to brew cynicism and disengagement early in the job. The 24 months attrition for the MBAs is more than 50%, even when in most of the cases first year is spend in training. The job fails to guarantee the dreams of leadership. The 2016 Mint analysis of the top 500 companies on Bombay Stock Exchange (BSE) showed that only 144 CEOs of 466 companies had an MBA. A 2017 survey showed that only 28 per cent of India’s CEOs have a master’s degree in business. We should also note that the ‘Forbes Billionaires List’ of 2020 found that among the top 100, only 11 hold an MBA degree.

While China has mastered the art of mass manufacturing In India we seem to have mastered production of graduates and post graduates, with dismal focus on quality. Even when 5000+ plus MBA institutes give employment and livelihood to a few lacs, is it worth playing with the lives of innocent students. How can we improve the partnership of academia and industry to produce talent that can fuel the dream of Atmanirbhar Bharat? The new world of work is great leveller where only the actual skill and capability with clear contribution counts. The value of education is diminishing only the actual contribution and mastery counts.