The moment of truth is finally upon us. The InsideIIM Recruitment Survey 2015, which was carried over the month of August, garnered 980 consistent responses which form the basis of several important information synopses which shall be shared in the weeks to come. Into its fourth edition, the survey has gradually become a paradigm among B-school students for all career-related issues. Several recruiters have even admittedly leveraged upon the survey results/insights to redefine their compensation structures. In fact, we shall be disseminating the results of the survey to a hundred leading recruiters in India. By virtue of this exercise, we hope to not only engender a fundamental change in the mindsets of B-school students, aspirants & alumni regarding their career choices, but also abet in their convalescence from the deadly “herd” syndrome. The first of the reports in the sequence aims to explore the following issues:
(i) Which are the preferred work cities?
(ii) What is the general consensus regarding the cost of an MBA program?
(iii) The key loan statistics for MBA students.
In this regard, we should clarify that the survey’s respondents have been sub-divided into 3 broad categories:
(a) Industry Professionals
(b) Class of 2016 (Final Placements due Jan-March 2016)
(c) Class of 2017 and MBA aspirants
A segmented method has been utilized for the different respondent segments in order to minimize the information asymmetry entailed herein. While post-MBA professionals are bound to have a deeper understanding of their chosen domain primarily due to first-hand experience, 1st year students & MBA aspirants would base their views upon media reports and other publicly disseminated information. In fact, the latter category would in all probability not know even the intricacies of the different roles offered under the umbrella of any broad domain. The Class of 2016 would essentially possess a level of understanding intermediate to the two categories mentioned earlier. Thus, the segregation should abet in making the results more cogent.
B-school joining decision (the question was only posed to MBA aspirants & first year students only!)
Over the years, students have gradually taken into cognition the fact that a B-school is an institution of learning which is not obliged to provide anyone with a job. In resonance with this ideology, a whopping 85.18% of respondents have concurred that the quality of roles being offered on-campus takes precedence over 100% placements. It is indeed heartening to witness that students have taken into their stride that the VUCA world we live in today is straddled with a significant quantum of uncertainty at every stage.
This also points to the fact that most students are likely to believe that they will be able to get the better roles on whichever campus they join. They don't see themselves as those who may be left out at the end.
Estimated reasonable cost of an MBA program
A look at the trends over the years does render some interesting insights regarding the perceptions of post-MBA professionals. Although the last edition saw that a majority of this category believed that the fair cost of an MBA program should be between 9 lakhs and 11 lakhs, this year’s sample posits a tie between 5 lakhs – 7lakhs and 7 lakhs – 9 lakhs. However, in tandem with the results witnessed in the previous editions, the numbers aren’t skewed even in the least this year too. In fact, a lower estimate adds meat to the hypothesis that an ever-increasing fee structure is not sustainable at all.
Class of 2016
The results for this respondent segment are well-distributed as well. However, unlike the previous editions more than 17% of the respondents concur that the ideal cost of an MBA ought to be between 3 lakhs and 5 lakhs while roughly 26% each agree that the ideal cost should be between 7 lakhs and 11 lakhs.
There is one more factor at play here. Clearly, you are likely to justify a decision you have taken. Most Class of 2016 students have paid far higher fees than MBA professionals. Hence, we see that a higher amount is going to be become more and more acceptable as it has become the norm. Ask someone who graduated in 2007 when the fees at IIM A were less than 5 lakhs for the entire programme - you will get a different answer.
MBA aspirants and first year students
Although the results in this category too (like previous years) are not skewed, the biggest takeaway is that the lion’s share (18.94%) believes that the cost of an MBA should ideally be between 13 lakhs and 15 lakhs. This clearly proves that the respondents in this segment ascribe more value to an MBA than what has been the scenario traditionally.
Again, a 10 Lakh MBA has become a norm. Among fresh aspirants who are looking to do an MBA, are heavily influenced by fee figures reported by popular media - who report the fees of the top IIMs - most of those schools charge INR 1.5 Million or above. Hence, 13-15 Lakhs could become a norm soon. Of course placement figures will have to keep pace with this massive inflation over the last 5-7 years. Most of the MBA schools in India have increased their tuition fee between 150% to 400% in the last 7-8 years.
Although the fraction of loan-takers in the Class of 2016 is roughly 68%, the real good news is that 46.06% of the respondents among 1st year students have not taken a loan to fund their business education. This indeed bodes well for the entrepreneurial aspirations of the upcoming flush of high-profile managers.
Most preferred work cities
Although the Big Apple still holds onto the “bragging rights” per se, the trend of working in India seems to be making waves as three Indian cities have made it to the top 5 for the first time in the survey’s history. While Delhi/NCR is the new entrant in the list, London has made an exit from the list despite featuring prominently in the last two editions.
There are many reasons for the Indian City surge here :
- Slowdown in the west has made it difficult to get even internships, full-time jobs are a rarity.
- The work Visa scene in UK is not encouraging. According to us, London won't even be in the top 7-8 for Indian grads in the next few years.
- Banking & Finance jobs abroad have shrunk considerably. There are not enough jobs anymore in places like London, Hong Kong or Singapore. A lot many people join Middle office desks now in Bangalore, Mumbai and Gurgaon with massive cost savings for MNC banks. Depreciating rupee has also helped.
Class of 2016 - The batch graduating in March/April
The resurgence of India as the place to be finds its most sanguine expression for this category of respondents as Mumbai tops the list for the first time in the survey’s 4 year old history. Other than that, most of the standings are relatively constant in comparison to the previous editions.
Key Reason :
The general acceptance that foreign jobs are hard to come by. The media fueled aspirations before one has joined a Business School now get more realistic once you join it. With burgeoning batch sizes and shrinkage in the number of options abroad people know what is more likely.
MBA aspirants and 1st year students
The “phoren bug” seems to have bitten this category pretty hard as only two Indian cities make an appearance in this list topped by New York. Surprisingly, none of the cities sans Bangalore (replaced by Singapore) have changed their position with respect to the previous year’s list.
Unrealistic expectations when one has not joined a business school or just joined it are at the heart of it (remember this survey was done in August 2015). As far as Indian cities go, despite the supposed poor quality of life, there is still a big aspiration attached to Mumbai. If we look at women respondents, Mumbai becomes the most preferred Indian city by a good margin.
It is very clear that mouth-watering for a foreign location is still very prominent in B-school circles. In fact, this urge tends to intensify as one moves from MBA aspirants to post-MBA professionals as companies usually do not offer foreign locations directly to fresh graduates. As far as the post-MBA professionals are concerned, one may attribute a significant degree of relevance to their picks as most of them have in all probability had a fair deal of foreign stints to back their choices. As they say, with age the glitter & glamour wither away and only strong fundamentals drive key decisions. A more conducive work atmosphere, replete with a slew of germane opportunities, is essentially the key driver behind New York’s consistent superlative billing with regard to this metric.