Irrespective of whatever happens all year round at the 1600 business schools in India, it is placement season that creates the greatest hype and evinces the greatest amount of interest from the media, students and their families. Over the last few months, news reports about placements have dominated media space -sadly some of them were a little sensational and misleading, a fact that was pointed out by Prof. Saral Mukherjee, placement director at the IIM-A. While the interest in placement figures is understandable, the focus primarily on salaries offered is unfortunate and often unjustified as it, subtly, becomes the barometer to judge a school and its MBA programme.
On a high
2009 was undoubtedly a disheartening year for placements. That said, even in a disastrous year, MBA schools still managed to ensure that their students were placed, albeit over a protracted time period. According to V.K. Menon, Senior Director (Career Advancement Services), the Indian School of Business, Hyderabad, “Despite the recession, our team was working with students well after graduation to ensure that they found a desirable opening and in fact some of the offers made later, in mid-2009, were better than those during the placement season, at the height of the recession.”
2010 has been a markedly better year, not just for business school placements but for the global economy and the same has been reflected in placements this year. As business and recruiter interest has picked up, almost all Indian business schools across the board have experienced a significant spike in placements. The large batch size increase, 25 per cent at ISB, 27 per cent at IIM-A and 32 per cent at IIM-K, across the country seems not to have affected placements, as almost all schools have recorded a successful and quicker placement season. “We are glad to see an increase both in the number of recruiters to over 320 companies this year and the variety of roles offered. While the sustained recruiter interest in ISB is heartening, what is more crucial is that we are able to offer our diverse batch of students, with work experience ranging from 2-15 years the kind of lateral roles they desire, rather than just a few entry level roles with marquee companies,” says Mr. Menon.
IIM, Kozhikode, saw an increase of about five per cent in the finance domain and about 30 per cent in consulting, according to a press release. The Loyola Institute of Business Administration (LIBA), Chennai, registered a quicker placement season with a significant increase in the number of recruiting firms and offers made. The common thread that runs through these results is that Indian B-schools and their graduates still continue to evoke a positive response from recruiters. With an Indian economy projected to grow at over eight per cent and poised to be among the top five global economies by 2020, the need for managers and executives in firms will continue to increase and therefore placements are expected to be robust over the next decade.
MBA aspirants need not worry; an MBA especially from a top-tier school will continue to add significant value to an individual's career aspirations and trajectory. Another notable trend this year has been the shift towards domestic placements. Despite signs of revival, unemployment in the US and the UK continue to remain at a high and this has reflected in Indian placements as well, this year. Coupled to the fact that the Indian economy is back on an upswing, the foreseeable future will see a majority of offers at any Indian business school coming from domestic companies or MNCs with locations in India.
The statistics done, it is now time to focus on the meatier issue and one that is more important for aspirants and their families. Should the interest in a school and an MBA be anchored on the highest salary and reported salary figures? Most of the top-tier B-schools in India, such as the ISB and the IIMs, have a policy of not revealing either recruiter names or salary packages offered. Then really where does this information come from and how reliable are these figures? Prof. Saral Mukherjee, referring to some earlier reports in the media stated, “The truth is that readers are being fed garbage.”
The truth behind the ‘garbage' is - not only can these salary figures be inaccurate, but also misrepresentative in many cases. Most of those Rs. 50 lakh plus offers are dollar or pound amounts converted to Indian rupees and definitely not for Indian locations. A US $ 100,000 offer in Manhattan is definitely not as astronomical as a Rs. 50 lakh offer in Hyderabad and this is something that prospective students must take into account. Secondly, another crucial detail is that most of these offers are CTC (Cost to company) and include many perks, which means that the true ’ash in hand' component is far lower. And lastly, as any MBA pass-out will tell you, averages are meaningless and can easily distort perspective. Consider a premier school like ISB, Hyderabad (ranked 12th in the world by FT) which has a diverse student set with experience ranging from two ‘15 years. Suppose one student with two years experience, got an offer of Rs. 12 lakh, while the other with 10 years experience got an offer of Rs. 30 lakh. That would place the average at Rs. 21 lakh. So as a prospective aspirant with two years experience or one with 10 years experience would Rs. 21 lakh be a suitable offer for both of you?
It is time that students realised, most Indian companies and MNCs have pre-defined salary bands based on designation, and simply passing out of a top-tier MBA school does not ensure that you will get a compensation package higher than your peers in the company.
Quality of placements
Salary figures should not be your only benchmark; focus on the role offered, the sector of interest and the culture of your future employer instead. A view that is forthrightly shared by Prof. Jayaram Iyer, Professor of Marketing, LIBA. According to Prof. Iyer ?Internally we use three criteria to determine quality of placements - the first is the brand and culture of the firm recruiting; second is the profile offered and the match with student interests and only then should compensation become a consideration.? The fact remains that not every aspirant makes a great fit for finance, and simply choosing to pursue finance as a career option because of the reported pay packages is a grave mistake. In 2010, according to Mr. Menon, “Several companies in diverse sectors such as Technology, FMCG, Media, Infrastructure and Pharma made offers rivalling those in finance.?”
This view seems to be echoed by the IIM-A, which recently introduced a cohort based recruiting process (segregates companies based on sector into one cohort) with the intent to help students focus on roles and sectors rather than pursuing day zero and day one recruiters blindly.
According to Prof. Mukherjee, “In this new system the students and recruiters got more time to interact with each other. This helped both the parties in making better choices.”
The bottom line is that aspirants should view their MBA programme as a long-term investment, one that will pay off not just in the year you graduate, but also over the next three decades of your work life. Ask any alumnus and he/she will tell you that your first job's salary is far less important than the brand you work for, the education that you receive and the pedigree of the school.
Ignore the hype created by astronomical salaries, an MBA is an education first and foremost and will definitely result in career progression and enhancement, both in the short and the long term. Don't buy into it - follow your passion and interests, rather than the herd, to carve out a successful career.
Think about this?
Speaking of averages distorting perspectives, consider a premier school like ISB, Hyderabad, (ranked 12th in the world by FT) which has a diverse student set with experience ranging from two to 15 years. Suppose one student with two years experience, got an offer of Rs. 12 lakh, while the other with 10 years experience got an offer of Rs. 30 lakh. That would place the average at Rs. 21 lakh. So as a prospective aspirant with two years experience or one with 10 years experience would Rs. 21 lakh be a suitable offer for both of you?
Kartik is an alumnus of the Indian School of Business, Hyderabad, (PGPM - Class of 2010) and was closely involved with the placement committee during his year at ISB.