Flipkart deferred the joining dates by 6 months. How much will this hurt recruitment for startups?

There is an uncertainty among graduates looking to join the startup ecosystem due to the current market scenario of firing and fund crunch.E-commerce giant Flipkart had deferredthe joining dates for IIM-A graduates by six months. This move could possibly hurt Flipkart’s future recruitment prospective, especially considering the fact that IIM’s are considered the most important recruiting grounds for most organisations.

So when the recruitments were frozen, why the six-month delay? A spokesperson from Flipkart confirmed that these delays were made as Flipkart is currentlyundergoing a few structural changes, and the deferment is made to ensure that the candidates get the best possible experience at Flipkart.

Flipkart believes that it is important for the company to ensure that campus hires join Flipkart at the right time and into meaningful roles. Company's statement mentioned,

We are undergoing restructuring that will further consolidate our leadership in the e-commerce industry in India. Consequently, it becomes important to redesign the campus programme to align it with our new business focus. Completing our restructuring process and consequent redesign of our campus program in our best assessment will take the next couple of quarters and hence the revision of joining date to December is the earliest possible.

Flipkart pointed out that this is not the first time that campuses have faced such a situation. The company requested to take an empathetic view claiming that they are possibly one of the very few companies to have offered the additional joining bonus of Rs 1.5L. Flipkart has made their position clear that they will not increase this amount and will pay to student upon joining in December. Company's spokesperson mentioned,

Flipkart is committed and confident to onboard our campus hires in December. Please take this as an assurance.

Reports suggest that in an email from the office of IIM-A’s chairperson to Binny Bansal, Flipkart CEO and Co-founder, and Nitin Sethi, HR head, Flipkart says that this delay in joining date would possibly impact the relationship between the e-commerce giant and B-schools. The reports said that the chairperson also demanded that Flipkart give a written commitment that the 17 students they had recruited will be absorbed by December.

IIM-A has also requested that either the period of deferment be reduced or the compensation for the same be increased (from the current offered amount Rs 1.5 lakhs). A report by Mint quotes the letter stating:

“While we understand that 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 decisionmaking. Rude shocks due to unilateral decisionmaking does little to help strengthen relationships with the campus.”

A spokesperson from Flipkart added that with the creation of newer units within the organisation, the six months deferment of the joining date isn’t to undermine the value but to ensure that the newer recruits can get better responsibilities and roles.

Whether the company faced devaluation, top recruits and hires leaving the company to talks of lesser funding, for a few months now Flipkart has been on the receiving end of negative publicity. The talk of organisational restructuring and deferring of joining dates in most cases happens when organisations either over estimate their requirements or are unsure what position the newer recruits will have.

Funding crunch, tougher market scenarios, and a general uncertain atmosphere for recruits, it has become all the more important for startups to handle campus placements more prudently and carefully. This deferment not only hurts Flipkart, but other startups might also have to face the brunt in the long run. Many sources suggest that in the current situations startups are no longer being seen as a lucrative stable career choice for fresh graduates.

Reports suggest that all isn’t well internally at Flipkart, with close investor scrutiny and losses the startup might be forced to keep a close check on its hires. At the end of March last year, Flipkart had reported losses of Rs 2,000 crores and Snapdeal had reported loss of Rs 1,328 crores.