Let me list down the popular career options for an MBA/PGDM Finance student. I am giving here a pretty exhaustive list not necessarily in any order. It might be possible that some options are missed out from it:
1. Handling finance function in a company.
2. Doing accounting job in a company.
3. Handling a desk at a broker's office.
4. Handling some operations in a bank.
5. Handling some operations in an insurance firm.
6. Financial advisory in a consulting firm.
7. Investment banking with a merchant banker.
The Undesirable Ones
You may note that the first two options are very rare for an MBA. You will also notice that the last two options are equally rare for an MBA from an average institute. Now I try to list down a few career options wherein an MBA grad is forced to join:
a. Selling / marketing a product. (other than financial product)
b. Selling / marketing a financial product. (other than insurance product)
c. Selling / marketing an insurance product.
You will appreciate the fact that most of the finance students land up in any of the above three options. What are the reasons behind such a rude behaviour by the market? Who is accountable for such an impartiality with finance grad? What can be done to secure a desired career? Let us ponder over these issues one by one.
Why Does the Market Behave so Rudely
Some experts would say brand name, a few would say quality of inputs, and others would like to say something else. No one is correct!
If you have any stake in India's business education, either as student or as faculty or as owner, or as a parent, you will agree that the quality of inputs are more or less same across all average kind of B-schools. So the curriculum, number of courses, quality of faculty, and quality of infrastructure.
The real culprit is the rosy picture that we usually like to paint to our students. As a matter of fact, our markets don't have enough opportunities for a finance grad, specially in serial number 6 and 7 above. Our MBA curriculum is not so structured so as to offer a career in serial number 1 and 2. So the most popular options remain between serial number 3 and 5.
If a finance student is poor at grades, then he or she has the options between a and c above. This is also true if the institute has failed in roping in enough companies for campus placement. Unfortunately, this is also true if the student has miserably failed in required skill-building, such as Excel. Institutes' failure to rope in enough companies is not always because of a lousy placement cell. It is because the market doesn't have enough opportunities to accommodate everyone. So the market has to act with partiality, favouring those who have better skills.
Who is Accountable
Poor quality inputs, lethargy from students and faculty, institute's dim efforts in roping in enough companies, and mismatch between the curriculum and industry expectations are only some of the factors that are responsible for a poor show. Localized thinking by the institute's management also worsens the situation. Interestingly, all the parties would be interested in passing the bucks. None of us has the courage to shoulder the blame.
What is the Remedy
The situation is not completely out of control. Inspite of the fact that the market doesn't have enough seats, there exists some space for all. Unfortunately, I doubt if a fool-proof plan exists as a cure to all these problems. Based on the feedback from industry and academia, I would like to propose the following:
i. Faculty and students must attempt to bridge the gap between course curriculum and industry expectation. The possible ways are constant industry interaction, live projects with companies, and industry driven curriculum. For example, a course on energy management must be prepared in consultation with the energy sector executives only.
ii. Industry mentoring can be a way forward wherein a set of students are mentored by an industry expert. For instance, HDFC Bank has started a program where they send their executives to teach to select students. Such a practice has gained a lot of momentum and a host of other banks / companies have also started doing it.
iii. Placement must be student-driven activity. Students must realize that a combined effort could make hell of a difference. Institutes must not think twice in deploying resources to achieve this goal. To everybody's satisfaction, institutes have started taking a lead in this direction now a days.
iv. Finance is a field that requires a host of skill sets in a student. Faculty and institute should leave no stone unturned in providing necessary skill sets to their students. Such skill sets include spreadsheet skills, data analysis and quantitative modeling, structured finance, financial news analysis, financial forecasting and some of the areas in banking domain.
v. Students must do a meaningful summer intership in finance area only. They should not settle at too beaten, run of the mill, and substandard topics that are usually offered by the company and guides alike. A worthwhile project report is heavier than good marks in 10 courses!
The Good, the Bad and the Ugly
The most sought after profile in finance is investment banking in a consulting firm. Incidentally the seat is usually reserved for grads from IIMs only. One of the most lucrative careers is in the field of M&A and risk management. Again the positions are filled by grads from IIMs. Then comes the profile of analysts. This is much desired by grads from good B-schools (other than IIMs). Sales profile comes in the last but it is in majority.
These views are based on a comprehensive research carried out by me and my team. There is a lot that still remains untouched in above article. I would like to invite all stakeholders to provide their valuable comments.