Challenges and Opportunities: The Evolution of B-Schools in the Age of AI

The highest salary offer for the Post Graduate Programme in Management for Executives at IIM Ahmedabad has dropped to ₹54.8 lakh. This marks the lowest figure in six years. Such headlines reflect the ongoing difficulties in the job market for management graduates. As the placement season concludes, many graduates are still searching for their ideal roles..

Survey Insights on B-Schools

In response to these challenges, Business Today, in collaboration with Marketing and Development Research Associates (MDRA), has released the 25th edition of its survey on India’s Best B-schools.

For the fourth year in a row, IIM Calcutta has secured the top spot for two-year MBA programs.

The Indian School of Business (ISB) continues to lead in the Executive MBA space. Additionally, upGrad excels in edtech, while IIM Ahmedabad stands out in short-term executive programs.

Despite the consistent rankings of top B-schools, significant challenges loom.

With digitisation and generative AI set to transform the corporate landscape, B-schools must address the widening skills gap.

This year’s lackluster placement outcomes signal deeper structural issues, indicating a shift in the global economic narrative—from protectionist policies to the disruptive influence of generative AI and emerging sectors like electric vehicles and renewables.

The Placement Dilemma

A recent study by Bank of Baroda reveals a decline in the headcount growth rate. It has fallen to 1.5% in FY24, down from 5.7% in FY23.

This decline raises concerns about campus placements at engineering and B-schools.

Companies in IT, consulting, and manufacturing are struggling to predict revenue growth. They are also having difficulty sustaining profit margins.

The widening skills gap between academic training and industry needs is a significant hurdle.

This mismatch is particularly evident at IITs, where unplaced student numbers are rising.

Hiring trends are evolving, with companies increasingly seeking technical and cross-functional skills rather than traditional MBA qualifications.

There’s a clear demand for expertise in sectors like smart manufacturing, logistics, and aviation, driven by automation and AI.

Evolving Industry Demands

In the financial services sector, there is a growing preference for engineers over MBAs due to the rising need for skills in data analysis and risk management. Banks are leveraging big data for customer insights and product development, prompting recruiters to look beyond traditional MBA graduates.

B-schools need to align their curricula with these changing talent requirements.

For instance, Kotak Mahindra Bank has established a 'Chief of Customer Experience' role, reflecting the need for specialized skills. IT companies are similarly adapting their hiring practices.

Adapting Business Education

The way business schools teach sometimes does not match what jobs need.

Experts say they should change their lessons every two to three years.

This change should include ideas from people who work in businesses. Some schools, like BIMTECH, have already updated their programs. They now teach important subjects like Python and ESG. They have introduced mandatory subjects such as Python and ESG.

Institutes are also hiring industry professionals for roles like “Experiential Learning Manager” to engage with companies and tackle real-world challenges.

The rise of generative AI gives Indian B-schools a chance to change how they teach. It can also improve student experiences.

However, making these changes costs money. Since government support is decreasing, IIMs are relying more on student fees and money from executive education. This makes it hard to raise fees even more.

Navigating the Future of B-Schools

B-schools need to change how they teach. Students now prefer videos and podcasts instead of just reading. Working with online course platforms can make education more accessible.

This can help even smaller schools attract good teachers.

At IIM Kashipur, classes are now shorter to help students pay more attention.

Experts believe that it’s not just up to schools to get students ready for jobs. Industry needs change quickly, and schools may not be able to keep up.

Students must recognize that an MBA is not a guaranteed ticket to a high-paying job.

t’s important to keep up with what’s happening in jobs and to learn new skills. Getting certifications, doing internships, and always learning can help you get a good job.

Finally, with the increasing demand for technical expertise, the prominence of engineers in B-schools is likely to rise.