The InsideIIM Recruitment survey has revealed that one of the most important aspects for an MBA student while selecting a company is the compensation offered. Considering the high fees of Indian business schools, high compensation is a minimum expectation from an MBA. But how high is "high"? What is the salary expectation that MBA students have that they believe is reasonable?
To answer this question, as a part of the InsideIIM Recruitment Survey, MBA students were asked to mention what they expect from an MBA in terms of remuneration. The following are the findings of the survey.
Note - An important point to be observed before drawing conclusions is that approximately 72% of the current MBA student respondents belong to business schools with a higher average and median CTC (Tier-1) as compared to other Indian B-schools. Therefore, the results will be influenced by the expectations of these MBA students of a higher than average CTC.
According to the survey, approximately 41% of the student respondents believe that a reasonable in-hand compensation post-MBA lies in the range of INR 1,10,000 - INR 1,50,000 per month. If one considers a 4:1 ratio (80% in-hand, 20% variable) between in-hand salary and the variable component, the annual CTC comes out to be in the range of INR 16.50 to INR 22.50 LPA.
For this range, it must be noted that 1st-year students are more optimistic about the reasonable remuneration they can expect at the end of their 2-year/1-year course.
28% of the respondents feel that an in-hand salary of INR 80,000 - INR. 1,00,000 is a reasonable expectation to have. When converted to annual CTC based on the same calculations used above, the range becomes INR 12,00,000 - INR 15,00,000 LPA, which is lower than even the lower limit of the aforementioned range.
What is interesting to note is that 40% of 2nd-year students actually believe that this is a more reasonable salary figure to expect post-MBA. Perhaps after the summer-internship season, 2nd-year students are much more aware of the realistic remuneration that can be expected during final placements; information that the 1st-year 'corporate virgins' may lack.
Only a fifth of the respondents believe that an in-hand remuneration of INR 1,50,000 - INR 2,00,000 per month, or an annual CTC of INR 22.5 Lac - INR 30 Lac p.a. is a reasonable expectation. Usually, only the top 20-25% of the batch of even Tier-1 management institutes end up getting these figures, which is why only about 15% of the 2nd-year students, who have perhaps just been through the final placement process at their respective B-schools, actually expect such an amount.
Only a meagre 4% of student respondents expect an in-hand salary of INR 2,00,000+ which comes out to an annual CTC of over 30 Lac+, making it very evident that even if you're at IIMs ABC, expecting more than INR 30 Lac per annum as CTC is unrealistic, unless of course you land an international offer and get paid in dollars.
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Comparison With Previous Years
As the MBA fees have increased, so have the post-MBA salary expectations. Till 2015, 41% of MBA students believed that a reasonable in-hand salary expectation lied in the range of INR 80,000 - INR 1,00,000. However, salary preferences have now changed significantly, with 41% of students believing that a salary of INR 1,50,000 per month is a reasonable ask. Besides this shift in preferences, the rest has remained more-or-less similar for MBA students.
As mentioned earlier, approximately 72% of the respondents belong to Tier-1 management institutes. So what is it that the rest feel is a reasonable in-hand salary expectation?
30% of the respondents believe that an in-hand salary in the range INR 1,10,000 to INR 1,50,000 is a reasonable expectation. However, 36%, the majority of the respondents, believe that realistic expectations must be a bit lower at INR 80,000 to INR 1,10,000, which is an annual CTC of INR 12,00,000 - INR 15,00,000.
Only 3% of the respondents believe that an expectation of INR 2,00,000+ per month in-hand salary is reasonable.
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|Compensation That B-School Students Expect After An MBA
InsideIIM Recruitment Survey - 2018
|Expected In-hand Remuneration (Per Month)||1st Year Students||2nd Year Students||Overall|
|Rs. 1,10,000 - Rs. 1,50,000||42.86%||37.04%||40.69%|
|Rs. 80,000 - Rs. 1,10,000||21.25%||39.51%||28.05%|
|Rs. 1,50,000 - Rs. 2,00,000||20.88%||16.05%||19.08%|
|Rs. 60,000 - Rs. 80,000||8.79%||6.17%||7.82%|
Most Preferred Locations To Work In
This part of the report is concerned with the locations that are most desirable from a professional perspective. To establish the Top-5 cities, MBA students and post-MBA professionals were asked to give the names of the three cities that they would prefer working in, in descending order of preference. Weights were assigned to each preference in order to create rankings.
The following are the findings of the survey.
For MBA students, the 3 most preferred cities are Mumbai, Bangalore and Delhi - 3 of India's largest and most developed cities. In the top-5, the big apple is the most desirable foreign city that most MBA students want to work in. The tech-hub of India, Hyderabad (including Cyberabad, the Gachibowli area that houses many software giants) also features in the Top-5 most desirable locations to work in for MBA students.
Dubai and Hong Kong are some of the least desirable places to work in for current MBA students. Hong Kong is the hardest working city in the world. According to CNN, employees in Hong Kong work 50 hours a week with just 17 days of paid holidays annually. The Hong Kong dollar is also not much stronger than the Indian rupee, so the lure of earning in foreign currency is also somewhat diminished when compared to the prospects of earning in dollars (American and Singaporean), and sterling. Both Hong Kong and Dubai are some of the most expensive cities in the world.
When compared to previous years, preferences have changed significantly. Ever since the inception of these rankings, the top-3 preferences have been amongst New York, Mumbai, and London followed by Bangalore and Singapore. However, the graduating Class of 2019 admires Indian cities more than foreign work destinations.
The absence of New York and London may have a direct correlation with the election of President Donald Trump and Brexit, respectively. Under President Trump, the work visa regime has been significantly tightened, and H1-B and H4 visas are very hard to come by. Brexit has also put the UK in a political and economic turmoil. London and New York are also extremely expensive cities to live in.
According to Business Insider, since 2014, Singapore has remained the world's most expensive city, and the city-state has also tightened its regulations around work-permits for expatriates. This may have also pushed the survey respondents to choose Indian cities over the likes of regular Top-5 features such as Singapore, London and NYC.
|The Most Preferred Cities To Work In For
Current MBA Students
According to historical data, MBA alumni have generally favoured foreign cities - specifically New York, London and Singapore - as the most preferred cities to work in, with Mumbai and Bangalore also featuring in the Top-5.
However, in 2018, preferences have drastically changed, not dissimilar to trends observed in the preferences of MBA students.
According to data, post-MBA professionals prefer to work in Mumbai, Bangalore and Delhi - 3 of the largest and most developed cities in India - over more expensive cities such as New York, London and Singapore. Hyderabad and Chennai do not feature in the Top-5, which may be due to the language barriers that may exist in these cities.
Dubai and Hong Kong are, once again, the least desirable locations to work in for MBA alumni and are also some of the most expensive cities to live in.
You may also be interested in reading our report - 'How Satisfied Are Post-MBA Professionals With Their Jobs?'
|The Most Preferred Cities To Work In For MBA Alumni|
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