Top engineering colleges blacklist startups after placement debacle

Hiring engineering graduates from leading institutes is about to turn tougher for ecommerce companies, particularly startups, after some of them failed to make good on the offers they had made in the previous rounds of recruitments.

Placement teams at institutes such as Birla Institute of Technology & Science (BITS) Pilani University and Delhi Technological University told ETthat they have turned extra vigilant and introduced stringent background checks on companies from the sector that was among the most sought-after recruiters until last year.

Delhi Technological University, National Institute of Technology (NIT), Surathkal, NIT-Trichy and Motilal Nehru National Institute of Technology (MNNIT), Allahabad, among others, are pursuing a similar strategy for placements that have started at some institutes and at others will start later this month or in September.

"Barring some big names such as Amazon and Paytm, ecommerce companies will have difficulty attracting the best students this year," said a professor in charge of placements at a top NIT, requesting not to be identified.

BITS Pilani University, where 42 students from the previous batch were hit by deferral or revoking of offers by companies including Flipkart and Grofers, has given the go-ahead to just five-six recruiters from ecommerce and startup sector ahead of the placements due to start on August 8. That's a sharp 70% decline from the number a year ago.

The institute has now made it mandatory for new recruiters in the sector to sign an agreement expressly stating that they are liable to pay six months' compensation along with an experience certificate to the affected students should they revoke a job offer, said G Balasubramanian, chief placement officer (India and Dubai) at BITS Pilani University.

"We will only have those recruiters who are willing to come on these terms. Otherwise, this kind of incident has a huge impact on the students' psyche at the start of their careers," Balasubramanian said. Officials at some of the leading institutes other than the premier Indian Institutes of Technology (IITs) said the recruiters who did not honour their commitments last year are being banned.

This comes after the all-India placement committee at the IITs had in June decided to blacklist about half-dozen startups that reneged on their offers. Recently, hyperlocal grocery delivery startup Grofers was served a legal notice by 20 of the 67 students whose offers it had revoked at the last minute.

NO STARTUPS AT DTU THIS MTH
Delhi Technological University, which started placements a few days ago, has decided against inviting any startups for this entire month. The only ecommerce company slotted so far is Amazon, said RS Walia, head of the department of training and placement. "We are not allowing any startups," he said.

At least 17 of the university's students from the previous batch were affected by the failure of companies such as Flipkart, Grofers and Nearbuy to honour their commitments. Rajeev Tripathi, professor in charge, department of training and placement at MNNIT-Allahabad, which had witnessed a surge in the popularity of startups in the previous placement season, said the institute is "seriously cautious" this time.

"We are not calling anyone without background verification verification and are tapping into our alumni network to help in the assessment of these companies," said Tripathi.

He said he may allot these companies a slot much later, in the second phase of the placements. NIT-Trichy's placement head AK Bakthavatsalam said the institute will not invite any startups this time after getting its fingers burnt with Grofers last year.

Students more cautious

At NIT-Surathkal, M Kulkarni, professor in charge of the department of training and placement, said that while Myntra made it to a slot on the first day of recruitment, courtesy a package of more than Rs 20 lakh a year, students are much more cautious about accepting offers from such companies.

Overall hiring is likely to be brisk nonetheless, according to the institutes, because they have reached out to more companies in different sectors this time round.

NIT-Warangal's placement head G Amba Prasad Rao said he had anticipated the trouble with startups last year itself. He said he had been wary of startups flush with venture capital money, but without strong fundamentals or revenue model, offering salaries upwards of Rs 20 lakh a year. That is why, he said, he did not entertain too many startups even last year.

"Some students at the time felt the institute was being too conservative. Many came back later to say it was a good decision to have been that way," said Rao.

Vinod Murali, managing director of venture debt provider InnoVen Capital India, however, said institutes should leave the final decision to students.

An IIT-IIM graduate, Murali said while it is understandable that institutes want to protect their students, they should let market forces work.

"Startups definitely operate in a more volatile and dynamic environment but that may be acceptable to some students. There have been instances in the past where IT companies have done similar things and no strong action has been taken against them. Making it difficult for startups to come will not help matters," Murali said.

Having said that, he said, startups should also make an effort to educate students about the kind of environment they work in, so the latter can take more informed decisions about possible fallouts.

source: techgig.com