In one of my posts recently, I had touched upon the issue of salaries in the top IIMs and there were quite a few responses to it. Most of the responses were unfortunately not correct and some of them went the political way rather than a reasoned discussion. In this post let me try and address this issue in a more structured manner.
To begin with my top B schools will be as follows and this post is about these. There are several other good B schools but I am not talking about them here. In order of merit these are IIM ABC, IIML/XLRI/FMS, IIM KI / SP Jain / Bajaj etc. My focus in this post will be for IIM ABC as they are really what we are talking about.
So what companies come to these institutions and what salaries do they offer? Firstly we need to understand that there are several companies, specifically in the areas of Consulting and Investment banking to name a few, that come only to specific institutes and not to others. So if one is looking at an initial job in Boston Consulting Group ( BCG ) then it is almost impossible to get through unless you are in these institutes. Some companies like Accenture do go to several other Technology and Management institutes but they look for a different profile there and not Strategy roles.
Secondly, the top IIMs and other B schools get most of the top companies in the different areas. These companies come here for they are absolutely clear they will not get such quality of people anywhere else. If you look at the recruiters from these top companies, many of them have been Alumni of these institutes themselves, so it is very natural for them to pick people from their Alma Mater.
Thirdly for the people who debate as to whether a general candidate from a top IIM is actually one of the best that the country has, let me state what it really takes to get into a top IIM today:-
- 95 % and above in X and XII board exams. These are normalised in case of IIM B, so getting 99 % etc in a weaker board will not help.
- CGPA of 8 and above from a good Engineering college, 9 plus will be more like it.
- 99.5 percentile and above in CAT. About 2 lac people take the exam so you will need to be in the top 1000 people.
The above is just to get a call, and rejection rates after that is also 80 % and more. So you can easily understand what we are talking about here.
So, given all this what are the salaries offered there? Let me give some data points rather than go by isolated figures:-
- At the topmost tier will be jobs outside India where we get to hear of crores of Rs as salaries. These are very few in numbers and can be only secured by the top few people in every year. For all practical purposes these are statistical anomalies.
- Highest domestic salaries are typically in the range of 50-60 lacs nowadays.
- Average salaries are in the range of 20 lacs plus.
- Median salaries are also in the range of 20 lacs plus – this means half the students in any batch ( 240 out of 480 ) get this salary.
- The minimum salaries are still in the range of 10 lacs plus and this is normally for people in the reserved categories – even for these people the change in them is quite extraordinary once they go through the 2 year program.
Are these salaries justified? Well, ultimately all salaries are based on market demand and supply, so companies pay for the skills and potential of the people they are taking. The debate about others not getting the same salaries even after several years is not logical. An IT developer with 5 years experience will probably get about 10 lacs but the pressure and accountability he has to face in the job is significantly less compared to an MBA in the first 2 years of his career.
So if you are in the first 2-3 years of your working life and looking for doing something different, you can consider this as an option. Of course, you will need to be really good to get through a top B school.
In today’s India I do not think there are any better opportunities than this.