Salaries of graduates from India’s top management institutes have started to plateau as campus hiring becomes a buyer’s market.
“Organizations continue to offer a substantial premium for Tier 1 talent but the hype around exorbitant packages at the campus has clearly been subdued,” says Aon Campus Study 2017-18.
MBA Tier 1 compensation at campus placements has displayed an average increase of 9.3% till 2016. However, since then this growth has begun to plateau at 3.3% annually. Surprisingly, salaries for graduates from Tier 2 and Tier 3 management institutes have showcased a constant increase, in the range of 6.5% – 7.5%, over the last seven years.
The market reflects a muted sentiment with 66% of the organizations offering compensation, similar to that of 2016. 33% of the organizations offer higher compensation than in 2016 while 1% have indicated a drop in campus compensation offered vis a vis 2016.
“Lower compensation increases, reduced number of jobs and controlled attrition amongst the current working population has forced the excessive supply of talent to operate on the backfoot. We now have more people fighting for a limited piece of the pie, thereby strengthening the narrative of a “buyer’s market”,” says the study.
To understand their campus strategies for identified educational qualifications, across different tiers for 2017-18, Aon Hewitt surveyed 379 organizations across eight industries—hi-tech, ITeS, e-commerce, consumer products, services, financial institutions, manufacturing and life sciences. The data for the study was collected between October 2017 to December 2017.
“Today, India is flooded with a large number of educational institutions, churning lakhs of graduates every year, who join the talent pool, looking to find their footing in the Indian job market. This heavy influx of talent, coupled with limited job opportunities, seems to be the primary cause of high rates of unemployment amongst this workforce. Furthermore, the lack of formal accreditation amongst these colleges poses increasing number of questions on the employability of such talent, thereby adding to the woes of an average Indian graduate,” the study says.