Shocking! Only 21 per cent of MBAs are employable

With the rise in the number of B-schools, the employability standard of MBAs has drastically fallen.

A nationwide study of marks secured by 2,264 MBAs who sat for tests by recruiting companies found only that only 21 per cent could make the grade.

The previous study of 2007 by MeritTrac placed employability index at 25 per cent.

The number of MBA seats in India has grown almost four fold - from 94,704 in 2006-07 to 3,52,571 in 2011-12 - resulting in a 5-year compounded annual growth rate of 30 per cent, the 'AICTE Approval Process Hand Book: 2012-13' reveals.

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The students, drawn from over 100 B-Schools beyond the Top25, were tested for Verbal ability, Quantitative ability and Reasoning by using the internationally standardised tests by MeritTrac on behalf of recruiting companies.

For purposes of this study, pre recruitment test scores of 2,264 candidates were analysed by MeritTrac to assess how they fared on the three tests in terms of the average percentage scores and pass-through rates.

The pass-through rates were calculated based on the pre decided cut-off for each test. These cut-offs are at par with the average cut-off scores decided by companies in their recruitment exercises.

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The threshold cut-off scores used in verbal ability, quantitative ability and reasoning were 45 per cent, 35 per cent and 40 per cent respectively.

Overall average percentage score obtained by MBAs in Verbal ability, Quantitative ability and Reasoning was 52.58 per cent , 41.17 per cent  and 37.51 per cent respectively.

While performance on verbal ability seems to be satisfactory, reasoning is an area where there is scope for improvement.

Considering that the elements of the reasoning test (deductive logic, data sufficiency, spatial reasoning, and analytical reasoning) are crucial to making sound management decisions, this is a result which warrants closer attention.

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The total pass-through rate, which is an index of employability, at 21 per cent mark leaves scope for improvement considering that organisations hire from this talent pool for strategic roles and this is the managerial pool that companies bank on.

To benchmark the current state of employability of management graduates, MBAUniverse.com and MeritTrac teamed up to conduct the research and release top line findings ahead of the MBAUniverse.com organized Indian Management Conclave 2012, on August 9-10 in New Delhi.

The results of 2012 employability report covering 2,264 B-schools students from 29 cities are quite startling.

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This report clearly brings out the employability gaps across various competencies and highlights the need for scientific examinations and tests to align the candidate skills to employability metrics," says S Murlidhar, CEO and Director, MeritTrac Services, a company that serves companies, educational institutions and government.

The MBAUniverse.com - MeritTrac Employability Index study of MBAs will now be conducted once every two years.

"Questions are asked about the talent coming out of MBA colleges, and whether they create a workforce responsive to the needs of the economy like understanding of business and on-the-feet thinking. So, decision-making skills are being valued more than ever," says Amit Agnihotri, Chairman of MBAUniverse.com.

Reasoning is an area where there is scope for improvement. Considering that organisations hire from this talent pool for strategic roles and this is the managerial pool that companies bank on.

The survey was conducted in over 100 B-schools across India after excluding top 25 B-schools as these schools are not representative of the issues of employability facing the entire set of 3,500 B-schools involving nearly 2,75,000 seats available for admission to 2010-12 batch.