Jan-Apr period every year is the most important one for Indian B-schools, IIMs, ISB et al.
Because this is the period when on-campus placements are held and these schools, which seem to consider the salary earned as the only parameter to show their worth, come all out with their new records of salaries offered!
This year was no exception – in fact after a lull of 2 years or so – the B-Schools are back with buzz! The highest salary reported so far is whopping Rs. 1.4 Crores per annum (or USD 320,000 per annum).
Recently I came across an article ‘IIMs’ high salary: The true story has a twist‘ that caught my attention and made me write about this whole salary brouhaha.
The article rightly questions the salary claims made by B-Schools. I have been thinking about it for a while and would like to share my thoughts.
Infosys is one of the most transparent companies in India – a bit too much, for it publishes in every Annual Report the salary details of people whose Gross Remuneration in that year has been more than Rs. 2 Lakh per month (i.e. USD 5000 or so). You can download Annual Reports from here.
When I was working with Infosys I have seen and heard many senior execs expressing their dissent over such practice. It is not mandatory or legal requirement, no other company in India does that, still Infosys publishes such vital pay package details!
I looked at this as benchmark – because it is very much in-detail. They publish names, designations, educational qualification, years of experience with Infosys and overall experience, Date of Joining, Gross Renumeration and Previous Employer details! (Is there anything else to be revealed? 😀 I sometimes sympathize with those who crib…)
Now, some observations from these Salary details and how they compare with eye-staggering salary figures IIMs and ISB throw at us every year!
- 41 year-old Assistant Vice President at Infosys who has been there for 17 years and has got an MBA earns Rs. 58 Lakh (USD 132,000) per annum
- Chief Operating Officer earns Rs. 91 Lakh (USD 203,000) per annum
- Chief Operating Officer earns Rs. 87 Lakh (USD 194,000) per annum
- Among the younger lot – A 33 year-old Delivery Manager, with a Bachelor’s in Engg and 12 years at Infosys earns Rs. 28 Lakh (USD 63,000) per annum
- A 31 year-old Principal Researcher, with a Bachelor’s in Engg and 10 years at Infosys earns Rs. 30 Lakh (USD 67,000) per annum. At 31, he is the youngest person to make it to this list. There is nobody younger than him – no matter if he has an MBA, CFA, Ph D. or any other TLA (Three Letter Acronym) against his name!
Now lets look at claims by IIMs and ISBs –
They regularly get salaries in excess of Rs. 1 Crore (USD 225,000) per annum – which is higher than CEO of Infosys!
If this salary is way too much for a domestic placement. Even for an overseas placements it is a bit on higher-side but would not appear as much exaggerated. The media reports do not clearly clarify on this.
But when you read finer news print, you come to know that the average domestic salary at IIMA for 2010 has been 15 Lakh (USD 34000) per annum (after an increase of 23%!) – which brings it to more humanly numbers. This probably is equivalent to a guy with 10 years in IT – so an MBA with a couple of years work could realistically get that offer…seems plausible!
I guess in most cases the salary numbers would be less than Rs. 10 Lakh per annum – not everybody gets into investment banking – few have to be content with a Software Coolie kind of profile 😀
But what happens is – the news reports hover around Crore-plus salary figures and MBAs in early twenties with no background in Finance hitting the jackpot by getting offers from Goldman Sachs, McKinseys, Lehman Brothers (RIP!) et al.
It creates a wron perception about MBA and changes the focal point from Management Studies to Manager-producing-Mills called IIMs and ISBs.
And media is certainly not the only one to be blamed for that. The institutions (IIMs/ ISBs), the Prof., the Placements and PR divisions of these institutes and finally the students with herd-mentality – all are to be blame for this.
My main concern is not around salary – it is something else, which I would come to later. Before that let me share what salary-related questions I get.
After completing my MBA from the UK when I again joined an IT firm in India people would give me strange looks…
a) Why would you do MBA in the UK and come back?
b) Why would you join IT industry? Did you try Investment banking/ Consulting? (I asked that person to explain those two terms, as in what really happens in those industries – he could not…)
c) If your post-MBA starting salary is ‘just’ 60-70% higher than your pre-MBA salary – it was not worth going for MBA! At least 4-5 times is minimum what you MUST expect!!!
I am an alumni representative for my parent Univ. in the UK and I get lot of questions, e-mails, phone calls around the Indian/ overseas MBAs, salaries, placements, RoI etc.
I ask them lot of questions – which at times irritate them – to know WHY they want to pursue MBA…and why not – say M. Sc. in Accounting and Finance (which would also open doors for a Finance career) or M. Sc. in Hospitality Management (for a person with that kind of experience)…the answer is common. In most cases it it hype around MBA, the salaries, and nothing else.
Another commonality is – most of them think short-term (2-3 yrs post-MBA), some really really short (they use IIM buzz words such as DAY ZERO and DAY ONE). It beats me…I cannot understand such obsession with RoI, payback period, % rise in salary etc.
There are other (and better!) ways to show that you understand economics, finance and mathematics of money management…salary calculations is the least exciting of it!
A colleague at work who is going tomy Univ. next year asked me one simple question – my Band (Designation) is B3, would I be able to join at B6 after I complete 1-year MBA and return here in 2011?
I said, “There are definite norms for these designations – education is not the only criteria. You MUST have certain yrs. of work exp (i.e. certain Age) to be in B6 band. (3 levels UP from current!). If you can become 6-7 years older during your MBA (from current age of 26 to 33-33!) you can very well expect B6 Band! I am sure MBA would be stressful enough to make you ‘look’ older by 6-7 years but I am not sure how you can manage biological age! :D”
He was visibly shaken and disappointed. His expectation was – after 1-year MBA he would be elevated from his Senior Software Engineer position to Account Manager position – and have his own cabin and company-provided car!
Sorry I say – that happens only in movies or IIM news 😀
I can go on and on about such misconceptions and mis-expectations from MBA – the instantaneous success n all. But there are other things I want to write about – which I feel should be point of discussion.
I have thought over it and my views are based on my experience/understanding of the UK B-schools and the Indian counterparts, and based on my interest in Management journals, magazines, research!
I would end this post here and will come back soon with Pat 2!
Meanwhile – you can comment on this post and share your views…