While American business school students worry about job offers being yanked and salaries and starting bonuses shrinking, their counterparts at top Indian business schools are having what looks to be their best recruiting year ever, according to a report.
The job placement figures this year at 20 of India’s top management schools – including six Indian Institute of Management campuses – “paints a rosy picture of job prospects for top management graduates,” according to the 2016 MBA placement Report released Apr. 7 by MBA Universe, an India-based Web site about business schools.
Following a steady flood of unfortunate news like the global meltdown, stock market correction, slowing US economy, collapse of Bear Stearns and Lehman, lack of investments banking and job placements at US business schools, the IIMs (Indian Institute of Management) and other top b-schools have managed to sail through without taking much of the impact. In fact, the year 2016 looked bright for IIM-A MBA graduates who got paid highest record salaries. IIM-A graduates were paid the highest of Rs.70 lakh and US$ 360K. The average salaries in top Indian b-schools were Rs.17 lakhs and in US around $80K.
A Kumar, the site’s editor, says the concerns over slowing MBA hiring in the US aren’t being felt in India. “There are absolutely no concerns over recession or slowdown,” he said in an e-mail. “In fact, as our report says, even the international recruiters have been positive in their hiring.”
Indian B-School graduates are commanding record salaries, up 20 to 22 per cent from last year, and are being heavily recruited by major corporations, the report said. For example, at the Indian Institute of Management in Ahmedabad, the average domestic salary is up 30 per cent this year, with the higher offers ranging from the equivalent of $125,000 to $175,000.
In a few instances, offers as high as $280,000 to $360,000 were made to a select few. These offers included pay packages, signing bonuses, international relocation assistance, and vacation packages
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The recruiters are responding to an increasing need for high-quality managers to run the nation’s growing businesses. India’s burgeoning economy, fueled by a growing middle class, has made the MBA a more valuable commodity than ever before. The rise of top-tier management schools such as the IIMs is making it more appealing than ever for Indians to go to business school in their home country rather than pay for a brand-name American degree.
Reportedly, at IIM-A, the average salary was Rs.17.85 lakh per annum while lateral average salary was 18.3 lakh. So it looks like prior work experience was not much of a criterion. Also fresh campus recruits were paid a higher salary than those with about 3 years of experience from the same college.
Similarly at ISB, Hyderabad, women managers were paid a domestic salary of 16.4 lakh per annum while the average salary was around 19 lakh per annum. It appears that women managers were paid much less than their male counterparts.
While placement records seem to be at the highest during 2016, there also seems a slowdown of recruitment for graduates at the second-tier b-schools. With rising inflation and corporates playing a wait-and-watch game, there is an increase of preference towards Indian corporates at IIM. Interestingly, even though there is a rise in students appearing for GMAT (the test required for entrance to most American B-schools), Indian students seem to be heading back to India for job opportunities after graduation or gaining some experience.
The current placement game is all about rationing scarce resources, iron clad rules about which company comes how early, rules for how students must bid for jobs and choose them. This model was perfect for the 80s and 90s – low competition, few students, low heterogeneity in the batch, and total predictability of the hirer market
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The current placement game is all about rationing scarce resources, iron clad rules about which company comes how early, rules for how students must bid for jobs and choose them. This model was perfect for the 80s and 90s – low competition, few students, low heterogeneity in the batch, and total predictability of the hirer market. If several customers were upset, too bad, let them go, there are too many of them anyway, and the batch size is small. But let’s take this year. Graduating class sizes are larger, the most popular category of employers, Wall Street, consulting companies, foreign banks are not recruiting or recruiting in diminished numbers. The placement ‘business managers’ have responded to this new world by not altering their rules of the game in terms of doling out day wise slots to companies, determined by majority votes, discouraging off-campus interviews, and by not questioning the old belief that “how early placement finishes = how good the placement season/ institution is”. There have been no new innovative customer friendly propositions to widen the net of companies that could participate, no encouragement to students to seek to widen the net through pursuing “off-placement” jobs and bringing them into the placement fold for the future and so on.
In fact the response has been “more of the same”, with more pressure and better cosmetics on courtesy. Wonder what these students would say about a case study where the airline industry is going through severe turbulence and perhaps being changed forever, and the leadership team of a leading airline decides to (a) distribute more fliers on the routes available, to crowds at every shopping mall and (b) change the uniforms of the crew and add an extra mint free in the menu.
This is also a good time to look at the placement fee imposed on companies. The logic of the fee was that there had to be an entry price paid for access to a privileged pool of candidates, and also that if headhunters charged a fee why should institutes not do so. Today, there are limited takers for the access to a privileged pool and the need is to re-examine the price elasticity of demand; also when the tide is not rising in overdrive, it is a good time to look at things truthfully. Other than logistic support on campus, no real search-firm like services was being provided by the institutions. No advice, no pre-interviewing and feedback in terms of fit with the company, no help in decision making or selling jobs to chosen candidates etc. Paying for placement isn’t where money needs to be charged – it is paying for “advertising” (pre-placement talk or any other form of advertising and relationships building) that potential recruiters should be made to do.
Why have on campus interviewing at all in these days of technology and several flights a day to most destinations? Looking at it ‘outside-in”, it is pretty tough to get calendars synchronized for travel of any group of people from a company. It is a lot easier to do it via a conference bridge. Perhaps placement offices should contract with Reliance web worlds to get up several extra bridges for placement season – and get employers to pay for the use of them. Why have day slots in tes
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