Placements and Salaries: Myths and Realities

Today I received special requests from a dozen of readers to write something about salary. Hmmm... fat salary, money.. the basic reason for majority to come to this coveted institute! Tonight, I am going to break some heart, I am sure :). But, for many this write-up will be an eye-opener.

Let me begin with a table:

Item	2003	2004	2005
Overseas placements	36	38	70
Indian placements	148	126	179
Highest salary Domestic	12 lakhs	12 lakhs	14.5 lakhs
Average salary domestic	6.2 lakhs	7.1 lakhs	7.9 lakhs
Highest salary overseas	90 thousand USD	96 thousand USD	152 thousand USD
Average Overseas Salary	58 thousand USD	58 thousand USD	80 thousand USD
% of investment bankers	14%	12%	40%

These are not any private data, all available at www.iimahd.ernet.in. Can you see what I am pointing here? Number of investment bankers are hardly 15%; 2005 placements are misleading, only 15% got overseas I-banker placements as usual - rest were all domestic I-bankers. In 2006, the number of overseas I-bankers have increased big time but you can't take that as a trend. I was there, a certain foriegn I-bank went crazy and hired every possible face! That may happen once in 10-15 years. So, everyone joining IIMA can't be an I-banker, isn't it?

Your next option is then consultancy, isn't it? That's what you dream of as a next alternative. There is a hope then dude! In 2003, only 6% got consulting, no overseas placements there. In 2004, 16% - no overseas again. In 2005, staggering 20% with 9 overseas placements.

The story is that on average people get 7-8 lakhs as compensation - that too cost to the company. What's that? The figure 8 lakh is a big bluff - let me tell you. Company will cut certain money as tax, benefits, etc. etc. After tax et al. one gets 60% of it as cash in hand. So, 4.8 lakhs say as a mean value. Turns out to be 40K per month. So, why are people crazy about IIMs then?

That's because in five years, the rise you can get is phenomenal. I know people joining at paltry 5.6 lakhs as cost to company and now after 5 years of joining, enjoying salaries above 20 lakhs per annum cost to company... turns out to be 1 lakh cash in hand! That's pretty good!

Now coming to 2006 story! We had a very good placement. The official data are not out yet. But the trend is better than 2005. Average salary (domestic) went over 8 lakhs, may have crossed 9 lakhs too. We had some very experienced candidates and they got salaries over 30 lakhs per annum. Hence, the rise in average salary. Mean is many-a-times a misleading number, mode was almost similar to last year.

So, the story is that almost half of the batch gets below 8 lakh job after graduating from the place! That's the fact! Moreover, the 100,000+ overseas salary that you read in newspapers are of those graduates who had more than 2 years of work-ex in reputed companies like McKensey, Anderson, etc.; they are not the freshers. Freshers generally get in-an-around 80K USD annually. That's also good - post-tax 4000-5000 USD per month as a starting.

Now personal feedback from some I-bankers - I-banking jobs suck! Yeah, that's true. For first hand experience, contact any I-banker you know and ask them about the work profile and how interesting their jobs are - you'll know the reality. Personally consulting seems more appealing to me. I have a friend who inspite of being I-schol (rank holders@IIMA are called I-schols) rejected pre-placement and during placement offers from big I-banks and joined a premier consulting company. His summers was in an I-bank from where he bagged a PPO (pre-placement offer). Life is quite amazing! Isn't it?

Let me know how you feel about this write-up.
See you tomorrow!
Boss