IIM-A asks Flipkart to guarantee jobs of recruits, says Rs 1.5 lakh compensation for late joining unacceptable
By Sreeradha D Basu & Madhav Chanchani, ET Bureau |
The email, a copy of which ET has, suggested that the delay should be shortened and said the compensation of Rs 1.5 lakh offered by Flipkart was “utterly unacceptable.”
MUMBAI | BENGALURU: Days after Flipkart told new campus recruits it was deferring their joining dates to December from June due to a restructuring exercise, the Indian Institute of Management, Ahmedabad, sent a strongly worded email to the company urging Chief Executive Officer Binny Bansal to guarantee that the candidates do indeed have a job when the date of joining is finalised.
The letter was addressed to Bansal, Chief People Officer Nitin Seth and Executive Chairman Sachin Bansal among others. The email, a copy of which et has, suggested that the delay should be shortened and said the compensation of Rs 1.5 lakh offered by Flipkart was “utterly unacceptable.” Compensation should be in the form of a monthly payment starting June and not as a lump sum as joining bonus or arrears, it said.
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IIM-Ahmedabad placement committee Chairperson Asha Kaul asked the Flipkart management to schedule a conference call in the next few days, “where all the relevant stakeholders can engage to reach a mutually acceptable solution”.
Flipkart told ET that it has written to Kaul saying that it’s taking on all the students it has hired but it wouldn’t be able to increase the compensation while pointing out that this isn’t the first time campuses have faced such a situation. To be sure, while Flipkart may be the biggest ecommerce campus recruiter to postpone joining dates, B-schools and engineering colleges have seen others in this space deferring or even withdrawing offers of late.
The IIM email pointed out that students need to repay loans and had turned away “multiple opportunities that the campus had to offer”, adding that most students had chosen Flipkart over other well-reputed recruiters because of the strength of its brand.
“The decision to defer the date of joining, coming as it does so close to the earlier promised date of June 2016, is sure to make this talent pool regret their decision of joining your company. Talented students fresh out of campus, on the eve of starting successful careers, feel cheated,” it said. While restructuring calls for tough decisions in an organisation, “the matter of campus hiring could have been handled much better with campuses forewarned well in advance and engaged as partners in this decision making”. This is likely to have an impact on future campus hiring drives.
“Future engagement of Flipkart with B-school campuses is bound to get affected as a relationship based on mistrust and lack of transparency can never be mutually beneficial,” the email said. The letter has been forwarded to placement cells at several other B-schools including IIMCalcutta, IIM-Bangalore, IIM-Indore, Faculty of Management Studies, Delhi, TA Pai Management Institute and Tata Institute of Social Sciences, asking them if they would be interested in joining the call.
The move comes as Flipkart tries to contain its burn rate, even looking to trim fixed costs, of which employee compensation forms a significant chunk. Also, profitability is now taking precedence over last year’s mantra of growth at any cost, for which it needed to recruit in droves.
The company has already put high-profile hires on the backburner and is not aggressively looking to add more executives to its ranks, relying more on existing staff to fill senior roles. “We have hired a lot in the last 18 months. There are a few critical positions opened on the hiring side based on specific needs we have which we continue to do. What we have is great internal talent,” Binny Bansal told ET on Monday when asked about recruitment plans. Flipkart told placement cells and campus hires on Friday that the company has been restructuring its businesses in the past few months.
In line with this, the new recruits will start working toward larger company goals from “day one”. But change of this scale meant time and effort, which is why it was delaying the joining date, Flipkart said. The move came as a shock to students, who’d been expecting to start work next month at typically high wage levels.
“For some roles, Flipkart was paying a Rs 20 lakh-plus (annual) package (and) joining in December means losing out on over Rs 10 lakh,” said a B-school placement team member. “A joining bonus of Rs 1.5 lakh can’t make up for it.” When asked whether Flipkart had responded to the email, Kaul said: “We would not like to comment at all at this stage.”
Other B-schools said they would be getting in touch with the company and decide on the course of action. “Some students may want to look for alternatives,” said the placement head of another top IIM. Hires from the Indian Institutes of Technology have also received the same communication deferring joining dates. “We will understand the company’s point of view and then take a collective decision,” said an IIT Delhi placement official.