Some Hidden Facts behind the IIM Placements 2009

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The top ranked B-schools in India are facing a dip in the average salary (domestic & overseas) offered to the students of batch of 2007-09 in the final placements of 2009. Indian Institute of Management, Ahmedabad (IIMA) and Indian Institute of Management, Calcutta (IIMC) reported a drop of 25% & 23% in their average salaries respectively. These institutes still feel that they are well-off by placing 100% of their batch strength, in these tough times of economic slowdown, which is the biggest concern for many other B-Schools.

But where does the median package lie? Does the average package reveal the complete scenario of the placement success story? Are these salaries really fetched by the students? These are some of the questions to be addressed before we get into the sectoral analysis of the placements. The discussion includes institutes like IIMA & IIMC which are perceived as similar b-schools across the nation.

IIM Calcutta reported the highest domestic offer of Rs. 60 lakhs per annum against the highest domestic offer of Rs. 65 lakhs per annum in last year which shows a drop of only 7.7%. The lowest salary reported by IIMC was somewhere in between Rs.6 lakhs to Rs. 7 lakhs per annum. But the median salary offered is not mentioned which can change the perspective of the salaries offered to the students. Some of these huge paychecks provided by the leading I-banks and consulting firms to the students in India causes the average to shift to a high margin & negate the impact of the no. of small paychecks paid by some of the firms visiting the campus. For example two offers of 60 lakhs can compensate for 15 lowest offers (of Rs. 6.5 lakhs) to bring the average offer to Rs.12.75 lakhs per annum. The placement scenario is no different in case of IIM Ahmedabad.

All these salaries quoted in the news are inclusive of bonuses which are mainly determined on the basis of the performance of the employee. Thus the fixed pay of the salary is just a fraction of the offer made by the firm. During these hard times of financial turmoil, the probability of reduction of this variable pay is very high in turn resulting in a small pay check for the aspiring student.

Banking and Financial services sector:

This sector has been the hot favorite of IIM campuses for many years. During the year 2009, when the whole world was crying about the financial meltdown, there has been not much effect on the placement statistics (in finance sector) of IIMA & IIMC campuses. In fact the placements for the banking & financial sector for IIM Calcutta have increased by 6% in this current placement season. This can be explained due to many factors. One of the major factors is the intervention of new firms on the campus in place of the large investment banks like Lehman Brothers etc. The list also includes some prominent Public Sector (PSU) firms like Union Bank of India, Bank of Baroda etc. Many of these firms were not given a chance in previous years because of the slotting system & hence they got a golden opportunity to pick some talented IIM graduates. A second reason can be the increase in the no. the private equity firms as well as trading firms visiting the campus which offer unmatchable job profiles in terms of role & compensation package to the candidates. But still the PSU banks played an important role (Union Bank of India recruited 18 students from IIMA which comprises nearly 5.5% of the batch) in keeping finance the pick of the year for the IIM students.

Consulting sector:

Consulting took the lead in becoming the most adored sector in most of the IIM campus as finance was losing its glamour due to economic crisis. But the placements at the IIM campuses do not show similar trend. There has been a fall in the no. of students placed in the consulting sector in IIMA as well as IIMC campus. This sector was not helped by the PSUs as these firms do not provide such kind of roles. Some of the old recruiters (like McKinsey & Co., Boston Consulting Group, Bain & Company, A T Kearney, Opera Solutions, Accenture, Deloitte and Cognizant Business Consulting) along with some first time recruiters (like Frost & Sullivan) & exclusive recruiters (like Corporate Executive Board for IIMC) represented this sector. The no. of job offers were very few & thus in spite of increase in the firms visiting the firm, the total no. of students placed decreased.

Marketing sector:

This sector saw a sharp increase in its placements due to fall of other sectors. The trend of falling marketing sector was broken this year with IIMA & IIMC showing an increase of 117% & 157% respectively in this sector. Some PSUs such as IOCL, NTPC, Coal India and Andrew Yule also recruited

for marketing roles at IIMC at a middle management level. Thus this sector saw a boom in the placements in spite of economic slowdown.

Information Systems sector:

Systems continued to be the least preferred job on the campus as the trend continue to decline even in these times of economic turbulence. This may be due to the less responsible roles provided by these firms which the students are aware of the fact as more than 40% of the batch (students with prior work experience) has a work experience in a similar industry.

Conclusion:

The placements at IIM Ahmedabad & IIM Calcutta shows a similar trend (except the marketing sector covering up the loses of all other sectors) in the sectoral placements this year in spite of the ghost of economic slowdown haunting these campuses. So, the next big question can be: Is the fall in average compensation packages due to increase in share marketing sector or due to intervention of PSUs?

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