‘Less than 1/3rd of family biz have succession plans in place’

NEW DELHI: Family businesses in the country have seen rapid growth in recent years but only less than a third of such enterprises have succession plans in place, according to global HR consultancy Hay Group.

Also, managing succession in a family businessinvolving family members is more complex, Hay Group India’s Director & Building Effective Organisations Practice Leader Mitali Bose told PTI.

Noting that family businesses in the country have grown rapidly in the last few years, she, however, said only less than “a third of family businesses (in the country) have succession plans place”.

Global research by the group found that only 19 per cent of family owned businesses have a plan in place when one generation retires and similar trends also play out in India.

“… the number of times and occasions when the next generation/a sibling has taken over the business in the wake of crisis brought on by the sudden passing of the managing family member/patriarch stands testimony to the fact that this continues to remain a much neglected area of planning and foresight,” it said.

Typically, a family owned business evolves from controlling owner stage to the sibling partnerships level and finally to the cousin consortium stage.

“The first generation builds, the second expands and the third destroys. This is a universally acknowledged phenomenon; that few family-owned businesses survive beyond the third generation,” Hay Group said.

Citing its research, Hay Group said more than 72 per cent of family owned businesses do not survive beyond the third generation.

Moreover, research found that only 55 per cent of family businesses survive after ten years of existence while the same comes down to 27 per cent after 20 years.

According to Hay Group, managing succession in an family owned business involving family members is more complex. This is on account of many factors such as aspirations of the incumbent family member, their place and role in the family, ownership implications, and capability/personality fit.

“Almost 80 per cent ‘retired’ family members continue to have involvement in business matters,” it said.

Considering the fact that customers have more choices in the market place for products or services, innovation would be a critical thing for family businesses going forward, Bose said.

“There is need for more innovation and more alignment at various levels within an organisation. Also, family businesses should have a lot of resilience,” Bose said.

Government puts on hold plans to list state-run insurers

NEW DELHI: The government has put on hold its plan to list state-run general insurers, with the finance ministry taking the view that the current financial health of these companies is not conducive for listing.

The finance ministry was earlier exploring the possibilities of listing the four state-run generalinsurance firms and was even preparing them to get their valuation done. “The four general insurers are making losses on their underwriting profits, their market share has come down and their combined ratio has been adverse. So, their valuation will be low which will not encourage any investors,” said a senior finance ministry official, requesting anonymity.

The total underwriting losses for the four general insurers in 2011-12 was over Rs 6,000 crore and the combined ratio — which measures the operational efficiency — was above 120% as against the desired 100%. “They are making profits only because of investment income, which comes through earnings from interest, dividend and sale of equities in secondary market,” the official added.

The government has also been unable to generate any dividends from the state-run insures. In 2011-12, only New India Assurance and United India Insurance paid dividend to the government worth around a paltry Rs 118 crore. “In the current situation, it won’t be prudent to even go ahead with their valuation exercise,” the above quoted finance ministry official said. The government at one stage was also looking to divide the four general insurers into two groups to bring synergy in their operations. “The plan has been shelved for the moment as there were operational and cultural issues. This could have been a step towards merger in state-run general insurers,” said another government official, aware of the developments.

The general insurers, however, feel that the industry itself is going through difficult times and all companies are facing problems, especially in the health and motor segments. “The government has asked us to set up working groups to look into motor, health and fire portfolios. We are formulating a strategy to improve upon the pricing of these products,” said chairman of a state-run insurance firm.

Analysts say that since the present structure of general insurers is zero profitability in their basic business, investors may not ascribe to top-dollar valuation, but given the strong secular growth that Indian market offers, there may be takers. “Globally, the investment income of insurers also plays an important role in their valuation.

The insurance premium structures will also correct in the long run and there should still be long-term investible interest,” said Vivek Gupta, who deals in mergers & acquisitions, and is a partner with BMR Advisors. Earlier in 2012, the finance ministry has directed general insurance firms to restructure their loss-making portfolios, improve their claim management, and avoid pricing warfare among state-run firms.

Culture now part of India Inc appraisals

MUMBAI: Whatever gets assessed gets done in the corporate world. So, upholding cultural values is now getting measured by organizations as part of their performance management framework. Leaders, who often drive the culture in an organization, are in particular being measured on how well they have walked the talk on cultural objectives. And, many organizations have transitioned to this practice over the last few years. 

Starting last fiscal, IDFCBSE 0.50 % incorporated cultural alignment as a key metric in evaluating senior-level promotion decision and in selecting its partners. So, 10 per cent of the salary of all management committee members at IDFC, including the MD and CEO, is determined on the culture metric. 

At RPG Group, improvement goals on developing and sustaining the group’s culture are up to 5 per cent over the previous year’s score for leaders and business heads. The Godrej group also has a leadership framework wherein cultural values are linked to performance. Deutsche Bank, on the other hand, equally stresses on the “how” aspect of performance delivery in addition to the “what” part of it. 

Increasingly, companies are adopting this practice on the growing understanding that business strategy will not get implemented in the absence of an appropriate culture. Research has validated a deep link between strategy and culture as well. 

“If an organization has a strategy to bring path-breaking products to market (like Google), then they will have a culture that fosters thinking out-ofthe-box, innovation and freedom of thought. Research has also established that culture is an outcome of what employees see their seniors doing,” said Gurprriet Siingh, managing consultant and head, YSC India, a boutique consulting firm that specializes in executive coaching, organization development and executive assessment. 

So when a CEO of a company demonstrates a behaviour on cost consciousness and travels economy class, others follow his example. Such behaviour is now getting embedded in individual performance appraisals. 

Over the years, organizations have realized that just measuring output — that is what an individual is delivering — is sub-optimal, since there are various “means” of achieving the ends.

At Deutsche Bank, performance appraisal is divided into two key components: one, what has been achieved, and two how the result was achieved. If an employee lower down the level does not fare well on the “how” part of the appraisal, he or she is counseled on the same. But for a leader, the norms are stricter. 

“The leadership level has a greater responsibility because they are the disseminators of the values. In the last couple of years, the bank has been laying greater stress on improving the process and giving it a sharper focus. On an average, employees have to undergo a mandatory online compliance training programme that covers topics like risk culture, anti-money laundering and reputational risk. There is a test at the end of the training session which every one is required to pass,” said Makarand Khatavkar, head, HR, Deutsche BankIndia. 

At RPG Group, culture forms a significant part of the people development goal in addition to six other goals leaders get evaluated on. The group has a standard process to evaluate every business unit and its business head on culture and every employee is required to respond to a set of questions.

Government puts on hold plans to list state-run insurers

The government has put on hold its plan to list state-run general insurers, with the finance ministry taking the view that the current financial health of these companies is not conducive for listing.

The finance ministry was earlier exploring the possibilities of listing the four state-run generalinsurance firms and was even preparing them to get their valuation done. “The four general insurers are making losses on their underwriting profits, their market share has come down and their combined ratio has been adverse. So, their valuation will be low which will not encourage any investors,” said a senior finance ministry official, requesting anonymity.

The total underwriting losses for the four general insurers in 2011-12 was over Rs 6,000 crore and the combined ratio — which measures the operational efficiency — was above 120% as against the desired 100%. “They are making profits only because of investment income, which comes through earnings from interest, dividend and sale of equities in secondary market,” the official added.

The government has also been unable to generate any dividends from the state-run insures. In 2011-12, only New India Assurance and United India Insurance paid dividend to the government worth around a paltry Rs 118 crore. “In the current situation, it won’t be prudent to even go ahead with their valuation exercise,” the above quoted finance ministry official said. The government at one stage was also looking to divide the four general insurers into two groups to bring synergy in their operations. “The plan has been shelved for the moment as there were operational and cultural issues. This could have been a step towards merger in state-run general insurers,” said another government official, aware of the developments.

The general insurers, however, feel that the industry itself is going through difficult times and all companies are facing problems, especially in the health and motor segments. “The government has asked us to set up working groups to look into motor, health and fire portfolios. We are formulating a strategy to improve upon the pricing of these products,” said chairman of a state-run insurance firm.

Analysts say that since the present structure of general insurers is zero profitability in their basic business, investors may not ascribe to top-dollar valuation, but given the strong secular growth that Indian market offers, there may be takers. “Globally, the investment income of insurers also plays an important role in their valuation.

The insurance premium structures will also correct in the long run and there should still be long-term investible interest,” said Vivek Gupta, who deals in mergers & acquisitions, and is a partner with BMR Advisors. Earlier in 2012, the finance ministry has directed general insurance firms to restructure their loss-making portfolios, improve their claim management, and avoid pricing warfare among state-run firms.

Bajaj Allianz eyes Rs 4,000-cr premium in FY’13

MUMBAI: Private sector insurer Bajaj Allianz General Insurance hopes to close the current fiscal with a gross premium of Rs 4,000 crore.

“Our growth rate will be more than the industry average and we hope to touch a premium of Rs 4,000 crore this fiscal, which will be a growth of 23-24 per cent against the industry average of around 20 per cent,” company’s Managing Director and Chief Executive Tapan Singhel told PTI over the weekend.

He also said the combined loss ratio and the expense ratio are likely to be lower this fiscal.

According to IRDA, the company posted gross written premium (GWP) of Rs 2,505.62 crore in April-November period, against Rs 2,089.83 crore in the same period last fiscal.

Singhel also said health and motor insurance will remain the key growth drivers in the near future for his company. The company is also optimistic about commercial lines.

The company is planning to launch an application on the Android platform, called `Eezee Tab’, which will enable customers to register low-intensity claims and upload photographs of the vehicle accident for quick claim settlements.

“Through this application, a policy can be issued to the customer by the agent at customer’s place, which will increase our presence in rural areas,” Singhel said.

Bajaj Allianz is a joint venture between Germany’s Allianz Group and Bajaj Finserv, with 74 per cent stake with the latter.

Companies like McKinsey, Cummins, Standard Chartered & others prefer PPOs during campus hiring

MUMBAI/KOLKATA A two-month internship is a far better way to assess a student rather than a 30-45 minute interview during final placements, a view that’s gaining currency among recruiters, institutes and even among students.

Indeed, companies across sectors say that instead of weeding out competition during the few slotted days ofrecruitment at top B-schools, they would much rather take the preplacement offer route for a better and more informed hiring process.

“It’s a huge relief to see more PPOs coming in when we have a large batch to place,” says Sankarshan Basu, chairperson for career development service, at IIM Bangalore.

IIM-B this year has received around 100 PPOs against 80 last year and this has given the college more breathing space which has more than 300 students to place. One of the consulting majors has, in fact, told Basu that 30-45 minute for interviews was just not enough and they would be happier to observe probable employees during summer internships.

“Final placement is not the big deal it used to be 7-8 years ago. A good chunk of talent that McKinsey looks at gets placed at summer, so the hiring process starts much earlier for the top talent now,” Renny Thomas, partner, Mckinsey, told ET.

McKinsey hires close to 100 people every year and visit 30 campuses, including IITs, law schools and top colleges. Based on offers received during summer placements which usually happen at B-schools during November, students intern with companies during April-May the following year.

Companies start rolling out PPOs to students they want to hire from August itself. “We want to hire people for character and value alignment as well as technical skills.

Once the fit is right, everything falls into place,” says Nagarajan Balanaga-VP HR, Cummins Group in India, which hires some 40-50 students across campuses like XLRI, JBIMS, SP Jain, NMIMS and Tiss. The company actually wants to complete its entire recruitment from its summer interns.

“Right now, we take around 50 students for summer placements and offer PPOs to 50-60% of them. In future, we plan to take about 140-150% of our hiring requirements for summer internships so that we find enough people from among them. That way, we can even skip final placements,” says Balanaga.

Like Balanaga, several recruiters complain that the placement process followed by most B-schools gives them very little scope to evaluate a candidate properly. Summer internships, on the other hand, give them enough opportunity to put the student through the drill.

What’s more, they observe that both retention and engagement of hires through this route are better than those taken through final placements. “If you’ve seen them and they are good, you take them,” says Madhavi Lall, regional head – HR, India and South Asia, Standard Chartered Bank.

“Till a couple of years ago, we used to hire only about 30% through PPO route. Now it’s 60%.” Standard Chartered, that plans to recruit 35 students across campuses like IIM Ahmedabad, Bangalore, Calcutta and XLRI, has already got 18 of them from summer interns.

Conglomerates like RPG are also doing the same: last year it took 30 interns and 3 got PPOs while this year it plans to give 4 PPOs to 19 interns. “This year, we have shortlisted students keeping in mind specific requirements of each business entity. With the introduction of new criteria in the selection process, we want to maximise our ratio of internships converted to PPOs,” said Amit Das, Senior VP – Group HR, RPG Enterprises.

At BCG India, around 28-30 of the 35 summer interns were given PPOs in 2011 — that accounts for about 40% of the company’s total campus hiring plans of 70-75. This time, it has taken around 45 summer interns across IIMs, plus another 3 who will be given international stints.

“It’s a reflection of the fact that we can give adequate experience to all these students. They get to experience what work we do and it’s a good way to figure out whether both parties like each other,” says BCG India senior partner & director Sachin Nandgaonkar. Students also agree.

Aman Bhatnagar of IIM Lucknow has just accepted a PPO from BCG and will be joining the organisation in Gurgaon. During his summer internship last year, he got a first-hand experience of BCG’s work culture, including working on a live project, client meetings and interaction with the company top brass.

“Having been through it, I know it’s an informed decision I am taking about my career. It’s not like I have to take up a job on the basis of some random interview with a company whose work culture I know nothing about,” says Bhatnagar.

A first-year student at IIM Calcutta who did not wish to be named has another take. “In these poor markets, given a chance, most would opt for a PPO since one is wary about dream companies reducing their campus hiring targets. It also gives the student an upper hand in negotiations since he knows he has a backup.”

Why you should have a personal accident cover

You need a life insurance policy to cover the risk of death and a health insurance policy as a cushion against hospitalisation expenses. While most readers are bound to be familiar with these essential covers, very few would have heard of the personal accident cover. Personal accident schemes cover the policyholder against death or disability due to an accident. All general insurance companies offer these policies, but it’s very unlikely that an agent will try to sell you one. These low-priced policies are not very popular because the agent earns barely Rs 20-30 as commission from selling such a policy.

However, you should buy a personal accident policy because it plugs an important hole in your insurance portfolio. Firstly, it will provide financial support to the policyholder if he is disabled after an accident. Secondly, the magnitude of the mishap doesn’t matter; even minor ones like falling off a bicycle and breaking an arm, or fracturing a leg while playing football are covered by the policy. If you thought term insurance policies were cheap, wait till you find out about the premium rates of a personal accident policy. For as little as Rs 225 a year, you can get a cover of Rs 5 lakh.

The daily cost works out to about 60 paise. However, this is the rate for a basic cover from a PSU insurer and will only cover death and permanent disability. If you want enhanced protection, you will have to shell out more (see graphic). Bundle it with other covers One way to get the agent interested is to buy it along with your health or motor insurance.

“Since agents get very low commissions, they usually try to bundle the personal accident cover with some other insurance product. However, this doesn’t mean that you will pay a lower premium, though some companies may give you a discount,” says Sanjay Datta, head of underwriting and claims, ICICIBSE 0.63 %Lombard General Insurance. A basic personal accident cover against death and permanent total disability is already built into a motor insurance policy. You can enhance the cover by paying extra. PSU insurers offer a maximum cover of Rs 5 lakh under a personal accident plan.

Private insurance companies offer a higher cover and a wider range of benefits, but the premium rates are higher too. You can take a cover of up to 8 times your annual salary. Apart from the basic death and permanent disability cover, you can buy additional protection against partial and temporary disability, even loss of livelihood. “A personal accident policy covers the buyer against costs that can shatter him financially,” says Subrahmanyam B, senior vice-president, health & commercial lines, BhartiBSE -0.17 % AXA General Insurance.

Understand terms & conditions It’s important to understand the terms and conditions clearly before you buy a policy. For example, hospitalisation benefit can be availed of only if the policyholder is admitted within seven days of the accident and is hospitalised for at least 24 hours. A fractured leg is a temporary disability, and if you have taken a cover against it, your policy will pay a weekly sum of Rs 5,000 for up to two years. However, this weekly cash benefit is paid only if you are unable to go to work and the payment starts only 60 days after the accident. One also has to submit proof, including a doctor’s certificate for the disability that prevents one from attending work.

Placement season: Companies prefer to recruit from top-tier B-schools than lower-ranked IIMs

KOLKATA | MUMBAI: It’s been a better-than-expected placement season at the IIMs this year, and that has had a positive rub-off on other top-tier business schools as well. B-schools like NarseeMonjee Institute of Management Studies (NMIMS), TA Pai Management Institute (TAPMI), Birla Institute of Management Technology (BIMTECH) and others have seen higher salaries on offer, more international postings and double the number of pre-placement offers.

“All IIMs are not in the same ranking when it comes to quality, and for companies, hiring the top 10 percentile of management colleges lower in the order makes more sense than picking up from the bottom percentile of anIIM,” said GaneshShermon, KPMG India partner and country head (human capital).

Top Indian as well as international companies such asGoldman SachsWiproBSE -0.30 %, Accenture,Cognizant, Infosys, Microsoft, DeloitteCrisilBSE -0.64 % and RBS seem to subscribe to this thinking, making offers at NMIMS, TAPMI, BIMTECH as well as Great Lakes Institute of Management, KJ Somaiya Institute of Management Studies, and Research and Indian Institute of Foreign Trade (IIFT).

At NMIMS and TAPMI, InfosysBSE 0.05 % is one of the top recruiters, picking up around 30 students at each campus. The firm’s HR head, Nandita Gurjar, had said at the time of company results that it would hire from B-schools for its consulting division, which is expected to get a large chunk of projects.

Placement season: Companies prefer to recruit from top-tier B-schools than lower-ranked IIMs

Students at Mumbai-based JBIMS have received pre-placement offers from Standard Chartered BankHindustan UnileverBSE 0.57 %, Procter & Gamble, Citibank, Vodafone, JPMorgan Chase, Mahindra & Mahindra, Accenture and Jones Lang LaSalleso far, with final placements still to come.

NMIMS has a large batch of 473 students, compared with 413 last year, but around two-thirds of the batch have already been placed and 81 PPOs have eased the pressure. Around 60 companies are still to visit the campus before the season ends.

Boom Time at B-Schools

At TAPMI, offers received this year have already crossed last year’s, with 46 companies coming to campus, including blue-chips like IMB Consulting, PricewaterhouseCoopers, ANZ BankTitanBSE 1.61 %, HDFC Life and Bajaj Auto Finance. And at Delhi-based IIFT, pre-placement offers have doubled to 42 compared with 21 last year.

“Final placements will start from February when companies rolling out international offers will come in, which includes the firm that gave the highest package of $150,000 last year,” said Munish Bhargava, corporate and placement advisor, IIFT. While the top salaries on offer at these campuses have increased, they are still below the level of the top offers at the IIMs so far. At TAPMI, the top offer was an international posting, from Oman-based brand distribution and retail management solutions company EnhanceOman, which made a Rs 15.84 lakh offer.

At NMIMS, the top salary has surpassed last year’s record of Rs 30 lakh while at IIFT, the top offer so far is Rs 22 lakh, compared with Rs 19 lakh last year. At JBIMS, the highest salary so far is Rs 24.2 lakh, a marginal increase over last year’s Rs 24 lakh. At Chennai-based Great Lakes, Microsoft has offered Rs 28.5 lakh for an India-based profile. The institute has a one-year MBA programme for students with more than two years of work experience.

Uniform insurance terms to simplify claim process

There’s some good news for policyholders fatigued by litany of excuses from insurers for rejecting claims. TheInsurance Regulatory and Development Authority (Irda) has recently proposed standard definitions for certain clauses and exclusions in health policies. If implemented, the proposal could ensure more clarity for customers at the time of buying policy as well as filing claims.
“It is a welcome initiative. It seeks to bring clarity on some of the common terms used in health insurance contracts and excluded items. It also seeks to standardise some important documents like claim form and discharge summary,” says Segar Sampathkumar, DGM, New India Assurance. The insurance regulator has also put up a draft customer information sheet on its website, which, as the name suggests, details the information most relevant to policyholders.

FIXED EXCLUSIONS

Often, the source of disputes between the insured and insurer is the ambiguity in policy wordings on expenses that are payable and the ones that do not qualify. To minimise the heartburn that varying interpretations cause,Irda has drawn up a list of as many as 203 items or expenses that the insurance company need not pay for. “This will reduce the disputes between hospitals and insurers/TPAs and make the process much smoother. However, if any insurer wants to cover some of these items he is free to do so,” says Shreeraj Deshpande, head, health insurance, Future Generali. The long list includes hospitalisation for diagnostic or evaluation purposes, stem cell implantation or surgery, nursing charges in post-hospitalisation period, cosmetic products, baby and infant food, weight control programmes, cost of spectacles, eye lenses, walking and hearing aids, service, documentation or administrative charges and so on. “Almost all policies have a list of standard exclusions like cosmetics and other charges which may not have a bearing on the treatment undertaken. This list spells out item-wise exclusions which brings lot of clarity to the hospitals and patients on what is covered and what is not,” says Sampathkumar.

STANDARD TERMS

Likewise, it has also proposed to standardise the definitions of 46 terms including room rent, pre-existing diseases, ‘medically necessary’ treatment, and reasonable charges. For instance, pre-existing diseases will mean ‘any condition, ailment or injury or related condition (s) for which you had signs or symptoms, and/or were diagnosed, and/or received medical advice/treatment within 48 months prior to the first policy issued by the insurer’. Now, insurers have been following and using this definition for the last few years, but Irda’s stamp will ensure that the company cannot wriggle out of its commitment citing policy wordings. Similarly, reasonable charges would mean ‘the charges for services or supplies, which are the standard charges for the specific provider and consistent with the prevailing charges in the geographical area for identical or similar services, taking into account the nature of the illness /injury involved’. It also listed critical illnesses and related conditions, which are admissible for claim purposes. According to Sampathkumar of New India, these developments bode well for the health insurance space. “It may be recalled that the General Insurance Council’s definition of pre-existing disease brought in lot of clarity to the market. Similarly, some of the common definitions are now getting standardised,” he says.

SIMPLER CLAIM PROCESSING?

The insurance regulator has also put out template of standard claim form and pre-authorisation form, which is to be submitted at the time of getting admitted in hospitals. According to industry players, this will improve the claim disbursal process. “Standardising the pre-authorisation form as well as claim form will help speed up the process of cashless claims by eliminating to and fro communication,” says Deshpande. “Standardisation of codes for billing would enable the claimant understand the deductions, if any. Similarly, standardisation of codes of disease would help the TPA settle the claim at the earliest. Guidelines on claim settlement will be of great help, as all TPAs now follow their own standards,” says Viren Ahuja, head strategy & director of claim consultancy firm Magus Corporate Advisors. “The draft also mentions timelines for settlement of claims.

This would help the customer get the claim disbursal in a seamless manner.” Then, there are other proposals that have the potential to change the way the entire business is conducted. Third-party administrators (TPA), for one, could see their powers curtailed heavily. “TPAs will not be able to carry out the business of insurance companies – like claim settlement or rejection. Instead, insurance companies will have to handle the claims directly. Also, insurers will have to sign agreements with the hospitals now, as opposed to contracts between TPA and hospitals earlier,” explains civic activist Gaurang Damani who had approached the Bombay High Court with a plea seeking clarity in claim settlement procedures followed by insurers, among other things. As a result, Irda framed the draft health insurance guidelines last year. “If insurance companies really start looking into claim rejections by the TPA, and analyse mistakes made, it will help the claimants. As of now, insurers go entirely by the verdict of a TPA, without even going through the documents,” says Ahuja. While the effectiveness of these measures will be seen only after their actual implementation, policyholders hassled by legalese in their policy documents can consider it as a step towards simplification of this rather cumbersome process.

Deutsche Bank, Morgan Stanley offering 1-crore-plus salary at IIMs, e-comm firms stay lukewarm

Banks are stepping up hiring at IIMs this placementseason and have rolled out at least three 1-crore salaryoffers so far. Deutsche Bank has given two such offers at IIM-Ahmedabad for its London office and Morgan Stanley has offered a 1-crore package to a student at IIM-Calcutta, sources involved closely in the placement process say.

Most global and Indian banks are hiring more than last year and many are offering pay packets that are 10-15% higher.

The top five consulting firms are again making their presence felt at the IIMs and will together hire over 200 people this year, according to ET estimates put together from conversations with sources from these firms. BCG will end up recruiting 60-70 consultants and McKinsey will hire a slightly higher number. The salary offered ranges from 18-20 lakh with an assured bonus of 1-2 lakh. Interestingly, this hasn’t changed much over the past few years.

But e-commerce firms, which had hired big at the IIMs last placement season, are going slow this year, according to sources from companies and the institutes. These are still early days with the placement frenzy likely to peak sometime next month. Around 2,800 students from 13 IIMs will enter the job market this year.

Banks rule the roost

HSBC, which recruited 17 students from top IIMs last year, is now hiring 30-40% more. It is increasing pay packets from around 15.5 lakh last year to about 16.5 lakh in its resident management trainee programme and 18 lakh for students with work experience. “We are looking at IIM A, B, C and L to source talent for our treasury business,” said a senior HSBC banker.

Standard Chartered Bank, which hired 15 IIM grads in 2012, plans to recruit more this year. The bank recruits from five IIMs, with Ahmedabad as the preferred campus for both wholesale and investment banking. Bank of America Merrill Lynch, which prefers to hire from IIM Ahmedabad, Bangalore and Calcutta, is also likely to hire more this year, sources say. The bank had laid off staff in 2012.

Among Indian banks, Axis BankBSE -0.02 %, according to sources, is offering 15-30 lakh, depending on the job profile. “The bank will hire for profiles in corporate and investment banking, retail banking and other corporate functions,” said Rajesh Dahiya, president, HR, Axis Bank.

HDFC to Offer 15-18 Lakh

HDFC BankBSE 0.33 % hires about 5-6 candidates from IIMs. Most of these are for trading in bonds and currencies. For commercial banking such as corporate and retail, they pick graduates from other schools. The bank is expected to offer a 15-18 lakh package.

“Banks and consultants have made a strong impact during the placement season,” an IIM Kozhikode spokesperson said. “Banks offered summer interns 10-12% more than last year, with 30% rise in new recruiters. Laterals were offered 32 lakh a year,” sources say. IIM Kozhikode also received 7 offers for $60,000 from overseas companies compared to one offer for $70,000 last year.

Brakes on E-comm

E-commerce companies, a big hit at campuses last year, are pulling back; some are not hiring from campuses at all. redBus, which hired from IIM Indore, IIM Ahmedabad and XLRI last year, is not participating in campus placements this year. “We are well-staffed at the entry level and are not going for placements,” says Phanindra Sama, CEO of redBus.

Myntra and Flipkart will also hire less from the IIMs this year. Other internet ventures too are iffy. “We don’t have a target, we will only hire if there are exceptional candidates,” says Manmohan Agarwal, CEO ofBigshoebazaar India, which owns fashion and lifestyle etailer Yebhi. The company had hired 10 candidates from IIM Ahmedabad and IIM Kozhikode last year. It will offer Rs 10-12 lakh.