Is your MBA at a second-rung business school worth it? Barring the top 50 B-schools, the remaining institutes find it difficult to place all their students. As many as half the students in some second and third-rung institutes don’t get placed, according to education experts.
Salary offers have not changed much over the past few years and some experts say the compensation offered can be as low as Rs 2-3 lakh per year. Average salaries at second rung B-schools such as the TA Pai Institute of Finance and International Management (IFIM), SRM Institute of Science and Technology (SRMIST) and some other B-Schools have been almost static in the past two years. SRMIST has placed 63% of its batch so far compared with 66% at the same time a year ago. The average annual pay here for both years is Rs 4 lakh.
Companies like Religare and Orange Scape Technology have offered salaries of Rs 2-3 lakh at SRMIST. At IFIM, the average salary has not budged from Rs 7.2 lakh last year. The average salary at TAPMI is Rs 10.6 lakh, among the highest in second-rung institutes, compared with Rs 10.1lakh per annum last year. “When compared to last the job market for second-tier B-schools is not so promising in terms of hiring,” said VM Ponniah, dean, School of Management at SRMIST. By comparison, a student from one of the top B-schools can expect an annual package of Rs 17-18 lakh on average.
Patience Key to Finding the Right Fit
“Besides the top 50 institutes where almost all the students get placed, the remaining institutes struggle to place their students with almost 20-50% of students without an offer in hand,” said Bakul Dholakia, former director of the Indian Institute of Management (IIM), Ahmedabad. He attributes this to the quality of faculty, infrastructure and student intake. According to another former faculty member who taught at IIMs, students have to accept offers of Rs 2-3 lakh. “Desperation forces them to take up temporary jobs of running odd errands in companies,” he said.
The fee for a two-year MBA programme at many of the second-tier institutes can go up to Rs 16 lakh while only a handful (less than 5%) get offers that exceed Rs 8 lakh per year.
Recruiters typically restrict themselves to the leaders among the tier-2 B-schools. “Campus talent from tier-2 schools is value for money. But we have to be patient in identifying the right fit,” said an HR head at a company that’s a regular visitor to the B-schools. Deloitte prefers to take the summer internship route, especially when it comes to zeroing in on talent from tier-2 B-schools. “It is better to go to these institutes and hire the talent through the summer internship.
This gives us a longer time to judge the right fit,” said SV Nathan, chief talent officer at Deloitte India. Currently, it hires only 20% of management personnel from second-rung management schools.
Amazon, another top recruiter at the management schools in India, does not differentiate between talent from top B-schools and the rest.
The effort is on finding the right talent that would fit the Amazon culture irrespective of the institute,” said an Amazon India spokesperson. “When it comes to hiring new talent, our philosophy is focused on the potential we see in students. With India becoming a major growth story for us, we want top talent from B-schools to build a career at Amazon.”