Does market want experience?

Placement season is about to begin in management institutes across country. Currently, IIMs are undergoing what is called lateral placements i.e. placements for candidates with about two years or more of work experience. Later in March, institute will have final placements which will be open to all students with or without work experience.

Over years, management education has been gaining popularity among students in India and IIMs have been observing increasing intake with substantial work experience. Substantial in Indian context is about two or more years where prior work experience is not pre-requisite for admission into MBA colleges. Where such fraction was less than quarter mere 3-4 years ago, this number is above 50% in recent years and steadily going northward. Many colleges have explicitly stated giving more preference to professional experience in their admission formula and others are following suit. That’s what college want to improve learning experience though how far this objective is met with mere two years of work experience, that too in predominately IT related fields is open to debate.

But do companies want their MBA candidates to have prior work experience? If we go by number of companies who chose to come for lateral placements and range of salaries they offer to applying candidates, then answer is unambiguously no. Types of roles and profile offered are not different than those offered to fresh graduates and very few companies try to hire from lateral pool. It seems that market doesn’t care about prior work experience. One can contest that work experience is useful only if it is relevant and given types of opportunities which open after MBA (consulting, marketing, banking, general management), a software engineering background is not going to help much. Objection is justified though it means that despite push from education institutions to intake candidates with prior experience, best move from candidate’s point of view is to join MBA program directly after graduate degree.