“What is the effect of Coronavirus on jobs all over the world? How many people have lost their jobs? Is it just me or is it happening all over the world?”
“How long will we face job cuts and hiring freezes in India due to the Coronavirus pandemic?”
“How are campus placements affected by the global pandemic?
“I want to apply for my Masters since companies are not hiring. Is that a good idea?”
“Are universities in the United States, Canada, Australia, and others still accepting applications?”
If you are worried about your study abroad plans and jobs during the Coronavirus crisis, you are not alone. We talked to over 15,000 Indian students in the same boat looking for guidance on what to do.
Many, like you, were on track to study for their GRE and apply for universities abroad. But now, some of them are confused about what to do next.
To decide your next steps, first figure out your options. Learn how:
1. How are jobs for Indian students affected by the Coronavirus crisis?
During an economic crisis, companies stop or limit hiring, cut salaries, and even jobs. In India, 52% of CEOs across sectors predict job losses (CII CEO snap poll of 200 CEOs).
College job placements are under threat – 50,000 students in institutes across India are yet to be placed. Even the IITs and IIMs are struggling! 40 placement offers at IITs and 35 at IIMs have been revoked so far. The Director of IIT Delhi, Mr. V.Ramgopal Rao, publicly appealed for companies to honour their placement commitments but companies are requesting for more time.
This worrying trend can be expected to continue in the near future till the world begins to recover from the pandemic.
This means that the competition for jobs will be immense over the next 18-24 months at least.
2. How long will it take before the economy recovers?
The COVID-19 crisis is unlike any other experienced on such a global scale. However, based on historical economic depression periods, it may be at least two years for the economy to improve after an unprecedented pandemic like this.
Experts in top management firms agree that the economic slowdown will be hard to overcome.
The slowdown is further supported by research by top management consulting firms. A recently released report by KPMG titled “Impact of Covid-19” on the Indian economy” states that India’s real GDP had already decelerated to its lowest in 6 years and that the impact of Covid 19 has further worsened the situation.
This means that the Indian economy was already in a slowdown and the COVID-19 pandemic has significantly worsened the situation. The report states that all the three major contributors to the Gross Domestic Product (GDP) – Private consumption, investment and external trade will be affected. Why is GDP important for you as student?
This is because that growth in an economy in an economy is measured in GDP. It is the sum total of all goods & services provided in an economy. A recession happens when there are two or more consecutive quarters of negative economic growth, meaning GDP growth contracts during a recession. As per the KPMG report, if the three biggest contributors to GDP are affected, then it is likely that GDP will fall. If the economy is in recession due to the GDP falling, then business will stop expanding and no new jobs will be created. They will start looking at ways to reduce expenses to prevent losses. This means that the number of jobs available to fresh graduates will significantly reduce and become very competitive as companies will stop hiring. A recent Goldman Sachs report predicts that the Indian GDP may plummet to a multi-decade low of 1.6% in the FY 2020-2021!
If job offers at premium engineering and management institutes are not being honoured, then you can expect similar trends across other colleges.
3. Companies don’t like employment gaps in your resume but they like to see graduate degrees (MS, MBA, PhD)
Imagine a scenario wherein you decide not to apply to your ‘study abroad’ program. We hope that in this case you will be able to land your dream job in what is going to be a tough economy. However, given things are the way they are right now, it is important to plan for a scenario in which this does not happen. There are 2 potential scenarios that one should consider :
- Scenario 1 : Not able to land a campus placement job due to a bad economy
- Scenario 2 : Getting a job but it not being in your area of interest
In the first scenario, where you don’t land a campus placement, this will reflect as an employment gap on your resume. As the employment gap increases, it becomes more difficult to find a job.
On the other hand, if you had kept your options open and applied for an MS, MBA or Phd abroad, you could attend graduate school and avoid a gap on your resume. This way, you have a valid rationale where you spent the time up-skilling with a graduate degree. You will improve both your core skills and your soft skills during the course of your degree which will make you more employable.
In the second scenario, if you do manage to find a job but it is not in your area of interest, it’s likely you will need to go back to graduate school and upskill yourself anyway. So, you would have been better off applying to graduate school in the first place.
As a student you have to plan for a scenario in a recession where you do not get a job or do not get the job that you are interested in.
Avoiding employment gaps on your resume is important. Applying to your MS, MBA or Phd programs are a great way to avoid employment gaps in your resume while significantly improving your skill value for a better economy.
4. Time is one of the most important factors that you need on your side when navigating a tough economy!
Data from past US recessions shows that time is one of the most important factors that you need on your hand.
The Great Recession of 2008 and 2009 was one of the worst in several decades and lasted for 18 months. This was the longest period of economic decline since World War II. The impact of the Corona virus is expected to be along the lines of the great recession of 2008.
The US economy was booming before the Corona Virus impact with unemployment numbers at record lows. While this has changed after the Corona virus impact over the last month, given the fact that it is the world’s largest economy with immense ability to create stimulus packages to kickstart the economy, we expect that it will recover first. Only after the US economy improves, will we expect to see some of the other countries improve.
Now, what does this mean for a student applying in Spring or Fall 2021. A Spring 2021 student starts in January 2021. A typical master’s program runs for 2 years and so they will graduate in early 2023.
For a student applying for Fall 2021 (August/September 2021), you are looking at graduating in August/September 2023. If you look at past data from the worst recession that the US has seen, it lasted 18 months.
Continuing your applications for Spring and Fall 2021 gives you enough time to ride out a recession with some buffer for recovery based on previous data.
To summarize, applying for Spring 2021 and Fall 2021 gives a student the most important component to ride out a recession TIME !
Past data from US recessions shows that even the worst financial crisis lasted for 18 month. Give yourself the time to ride out a recession and try to be positioned in economies that will recover first.
5. As a student, it is the time to keep your options open!
At Galvanize Test Prep, we strongly believe that as an undergraduate student, you need to make sure that you keep all your options open at this time. The job market is going to be quite difficult in the medium term.
Make sure that you are using the time available now to continue with your study abroad preparation and application to give you a competitive edge in today’s market. As mentioned in the article above, Spring 2021 and Fall 2021 aspirants are uniquely positioned to take advantage of the time that graduate school offers to improve their skills and ride out a bad economy.
If you do manage to get your dream job in a competitive economy, you can always defer your admissions to graduate school if you want. But if you do not apply to graduate school, you will not have that option available in case you are not able to find a job on graduation or not able to find a job in your area of interest.
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