The MBA placements at top B-schools, this year, have not been as lustrous as compared to previous years owing to the global economic slump, and slowdown in India. The downturn led to a significant decrease in the average salaries of the MBA students. Based on comprehensive and updated inputs by Top 20 B-schools, this special report by Amrita Das of MBAUniverse.com sheds light on the trends of Placements 2009. We begin the series with the trend of salary drop witnessed across all B-schools this year.
Highlights
- Significant impact of grim international financial condition on placements at top-tier MBA institutes
- Average salary down: 25% slide across top-tier B-schools
- Hiring process not complete in some B-schools yet
- Public Sector Units (PSUs) are new lifeline
- Marketing saw a renewed interest among MBAs
- In recession, entrepreneurship still a favourite
Average salary packages slide down by 25% across top B-schools
India’s leading management portal MBAUniverse.com analysed the placement trend of the year 2009 and compared it with previous years’ reports of IIMs and other top B-schools. This year, considering the economic meltdown and shrinking job opportunities in the market, fresh B-school graduates were left with no option than to accept job offers with low salaries.
The analysis by MBAUniverse.com shows that while last year, on an average, the salaries rose by 20%. But there has been a fall of about 25% in compensation packages this year. Even the Indian Institute of Management (IIMs) institutes, considered to be the best B-schools in India, got a taste of meltdown.
Take IIM Ahmedabad (IIM A) for instance. According to the MBA Placement Report, this time the average domestic salary at IIM A came down to Rs 12.17 lakh from previous year’s Rs 18.75 lakh, with a decline of about 30%. On the international placements front, the picture was worse. Last year, several offers in the range of USD 280,000 to USD 360,000 were made to IIM A students, but this year’s highest offer was that of USD 83,000. A substantial USD 277,000 lesser! The story was more or less similar at other IIMs.
This year, the average salary at IIM Calcutta (IIM C) was recorded at Rs 12.70 lakh, a significant 23% lesser than last year’s average package. This year, the highest offer at IIM C was pegged at Rs 60 lakh per annum. However, last year the average figure was around Rs 16.40 lakh and the maximum package was somewhere between Rs 65-70 lakh. But this year’s highest international package at IIM C was an exceptional, as it touched the figure of USD 86,785, considerably higher than what was offered at other IIMs.
At IIM Indore (IIM I), too, plunging salaries remained the top concern. The average annual compensation offered at the campus stood at Rs 10.29 lakh, almost 21% lesser than that offered in 2008. An annual compensation of Rs 9.65 lakh per annum was offered to IIM I candidates without experience. Experienced candidates, however, were offered slightly better packages with an average annual compensation of Rs 10.67 lakh per annum.
Even at IIM Kozhikode (IIM K) the average annual salary declined considerably. While 2008 placements at IIM K saw a jump of 16%, this year the salary package offered slipped down by around 28%. Last year, the average annual salary offer was Rs 14.83 lakh, but this year the offers could not exceed the Rs 10.61 lakh per annum mark.
The MBA Placement Report also found that other top-line B-schools like FMS, JBIMS, XLRI, IIFT and SPJIMR saw a drastic decline in their pay packages too. Surprisingly, some B-schools are still grappling with the placement process.
The placements at International Management Institute (IMI) Delhi are not over yet. According to IMI Delhi 95% of its batch has been placed and they are hoping to place the rest by the end of June. The average domestic salary offered to the IMI Delhi students this year (as on June 12, 2009) is Rs 6.03 lakh per annum, while last year the average domestic salary was Rs 8.75 lakh per annum.
What led to this drastic salary slide?
The most obvious factor is that of global financial meltdown. The worldwide economic drought played a spoilsport in this year’s recruitment process. It also contributed to the drastic cut in salary offers.
The dry job market is another reason why the students couldn’t bargain. Also, many students preferred joining PSUs and government jobs, which generally offer much lesser pay packages than their private counterparts. This is also one reason why the salary graph plunged downwards.
Let’s take a look at this year’s average salary offers at the top B-schools and compare them with previous year packages.
AVERAGE SALARY 08 vs. 09
| B-school | Average Salary 2008 (in lakhs) | % change (07 vs. 08) | Average Salary 2009 (in lakhs) | % change (08 vs. 09) | |
| 1 | IIM A | Rs 17.85 | Up 30% | Rs 12.17 | Down 30% |
| 2 | IIM B** | undisclosed | -- | undisclosed | -- |
| 3 | IIM C | Rs 16.40 | Up 14% | Rs 12.70 | |
| 4 | IIM L** | undisclosed | -- | undisclosed | Down 25% |
| 5 | IIM I | Rs 13.07 | Up 20% | Rs 10.39 | Down 21% |
| 6 | IIM K | Rs 14.83 | Up 16% | Rs 10.61 | Down 28% |
| 7 | XLRI | Rs 14.75 | Up 15% | Rs 12.12 | Down 18% |
| 8 | MDI | Rs 12.50 | Up 10% | Rs 10.45 | Down 16% |
| 9 | SIBM | Rs 10.38 | Up 20% | Rs 9.00 | Down 13% |
| 10 | IIFT | Rs 10.11 | Up 8% | Rs 8.09 | Down 20% |
| 11 | FMS D | Rs 15.31 | Up 27% | Rs 11.47 | Down 25% |
| 12 | IMT G* | Rs 8.67 | Up 10% | Rs 8.30 (as on May 25) | Down 4% |
| 13 | JBIMS | Rs 13.84 | Up 28% | Rs 10.72 | Down 25% |
| 14 | XIM B | Rs 10.12 | Up 15% | Rs 7.30 | Down 27% |
| 15 | SPJIMR | Rs 13.78 | Up 25% | Rs 10.00 | Down 27% |
| 16 | ISB* | Rs 19.00 | 21% | in progress | -- |
| 17 | Great Lakes* | Rs 9.70 | Up 5% | Rs 8.50 (as on Apr 14) | Down 12% |
| 18 | VGSoM (IIT K) | Rs 11.44 | Up 30% | Rs 8.93 | Down 22% |
| 19 | SJMSoM (IIT B) | Rs 13.96 | Up 43% | Rs 10.28 | Down 26% |
| 20 | IMI D* | Rs 8.75 | -- | Rs 6.03 (as on June 12) | Down 31% |
* Institutes not over with final placements yet
** IIM B & IIM L do not disclose salary details
Source: MBAUniverse.com MBA Placement Report 2009. MBAUniverse.com is India’s leading management portal for MBA-aspirants, MBA-students and young executives.
Next: The second part of this series will bring to you a story on the new flavour of the recruitment season: Public Sector Units
