MBA degree and salaries…
Most of the ‘average’ students today do an MBA and get a degree. Now this could be from a great college, a good college, a bad college or a downright stupid college.
Let me tell you the salaries that were being offered for these graduates. It is really appalling. For example I remember that there was a company that was paying Rs. 3.5 L for the people who passed out in the 2006 batch. IN the year 2006 this was not a bad salary. Let us see how much should this be just adjusted just for inflation over the past 5 years. Well it will look nice…assuming 10% inflation per annum:
2006 350,000 2009 – Rs. 465,000
2007 385,000 2010 Rs. 512,000
2008 423,500 2011 Rs. 564,000
Any guesses on what is happening at the ground level ?
FOR the same company and same institute, the company is offering – believe it or not Rs. 250,000. Those who joined in 2009 are continuing to be paid Rs. 350,000 and some of them are unable to get Rs. 250,000 outside. Of course there is a group which will be getting paid better..but this is not far away from the truth for too many of the students. It is the job of the industry to separate the men from the boys – so you see guys who have passed in 2006 who earn Rs. 1 Million a year. But the average, the median, mode are not good. The standard deviation makes a mockery of the word average.
I recently received the CV of a kid who had spent Rs. 10 lakhs on an MBA degree (super publicity seeking overrated, over advertising college – just guess!). I could not do anything – but did speak to him. The best job offer he has is from a co-operative bank which is offering him a grand salary of Rs. 1 lakhs PER ANNUM (repeating Rs. 1L per month, or Rs. 8k per annum)…well I had no comments to offer. Sad, but true.
Raja
My guess is IIPM 🙂
subra
i got a call from a bank saying ‘while this may be true we are willing to pay Rs. 5 L as starting sal..but not getting good people’. I am really unable to reconcile this problem. Happy to help colleges with some teaching, testing, coaching – so that these banks/ mutual funds pick their people…to fill in the gaps.
Abhishek
HI Subra,
The students who have financed their education with Loans pose a serious problem. All MBA colleges advertise 100% placements. The trick is lower the salary and take more people.. thats a good deal for the company and as well as the institute which wants 100% placements..
Abhishek
subra
liked this comment ‘MBA se CA achha degree hain. Baap ka paisa kam, leking apni puri jawani lag jaati hai’. LOL
not really true – these days people normally pass in the 2nd or 3rd attempt. Once upon a time people would give up doing CA and take up a job – those born in the 50s, 60s, etc…sometime in the 90s i guess the results started improving…now most people who start doing the course do complete it…
varghese
Hi Subra,
Can you guide whether to do MBA after completion of the B.E or to start working and then decide about further studies may be after 3 to 4 years?
anon
cycles–there are ups, there are downs..one has to get on with it
In the not-so-far days of 1999 yours humbly began at the princely sal of 1.2 Lac pa after a technical degree and state school MBA.
Sanjay
@subra : It seems like a conscious decision to increase passing rate of CA. I have heard it before also. In earlier days, so many CA were not required, so bar was set high. Now more CAs are required so bar is lowered.
@anon : things have changed in last 11 years. Check out prices of different asset classes 🙂
anon
sorry- that shd be 1989.
sanjay- you have a point.
Rajesh
The best job offer he has is from a co-operative bank which is offering him a grand salary of Rs. 1 lakhs PER ANNUM (repeating Rs. 1L per month, or Rs. 8k per annum)…
Isn’t Rs. 1 lakh per annum is approx equal to Rs. 8 per month and NOT (Rs. 1 lakh per month, or Rs. 8k per annum) as mentioned in brackets?
Rajeev
Subra,
It is difficult to find Engineering graduates even at 4 lakh PA CTC. Most of the grauates are actually un employable. They can not speak in English and do not have a clue what to expect in a real job. Oue educational system needs a revamp. We should focus not on the exams but on real knowledge, at least in the professional degrees.
I have tried hiring engineers without much luck in spite of offering a decent ctc of 4 lakh PA.
Suresh
Rather a fresh graduate with good English language skills and nil attitude. I think he can earn 9L-10L in 3 years time.
There will always be a job for people with common sense.
Akanksha
The fault lies with both the students as well as companies…I have seen that self starters who have the will to learn can take away much more than even a mediocre student at an ivy league college who doesn’t have the thirst for knowledge. Even so called A minus or B-grade MBA colleges (recruiters’ terminology not mine) often have excellent air-conditioned libraries stocked with good books and never hold back students from taking up extra projects/attend seminars after class or during the holiday breaks. Lot of students are too busy exploring their freedom (first time away from home for many) rather than honing their skills.
And speaking of companies, many recruiters attach too much unnecessary credit attached to brands. I graduated from a university run MBA in a city which has hundreds (yes, hundreds) of MBA colleges. Most top colleges (mine was one of them) drew from the SAME pool of part-time experts to teach the core courses (Law, Finance, Marketing) . The same professors, same opportunities to attend seminars, same knowledge ‘bank’ (never heard of professors holding back their knowledge from curious students). I know many who have WILLINGLY held extra classes for students on Sundays because they wanted to learn more than the ‘curriculum’. BUT, the companies would offer the same position at 20-30% less salary to a brilliant candidate just because he/she is from a B grade college as opposed to mediocre candidates from an A grade school. That seems a little unfair to me. Never got to know why companies do this other than pure profit motive (talent for lesser money).
Anon
My guess would be that companies are still using “recession” as an excuse to hire talent for lesser. I know this is a very pessimistic view, but I believe it is one of the reasons. Privately held companies had a grand time in 2009 recruiting MBA graduates at their asking rate. MBA graduates with no other choice had to accept whatever was being offered. I know for a fact that my current company wasn’t particularly affected by the recession despite having mostly American clients. However, it loves to use this excuse even today.
Rajeev
Akanksha,
I hire engineers and do prefer higher rated institutions. the logic is simple. In India, students who get good marks go to higher rated colleges via the admission process. It is impossible to judge the attitude of a preson in one day when you go for an interview. I prefer to go for higher merit students with some leadership skills and some sports background. These normally turn out to be balanced individuals.It is imposible to know everuthing about who appear for an interview.
In India today, it is very dificult to hire and retain talent. Most freshers prefer jumping jobs every two years for higher salary. This does not help the company which hires them and trains them. I see candidates who have switched six jobs in ten years and still not found their path.
There is always good growth for people who learn what they are hired for and exceed the expectations. In private sector there are no limits to your growth if you are a valuable employee. The companies will do what it takes to retain you and keep you in good spirits.
As regards lower salaries, everyone has a market price. Why hire a preson at higher salary if you can hire him / her at lower? Once you are hored, your performance will lay the path for your growth and if you do not perform, the company may use salary restriction as a way to ease you out. There are no fixed increments for non bargainable staff. Hiring someone at too low a salary also creates problems. Once he comes to khe salary earned by his colleagues, he gets de motivated. It is best to upgrade a performer within six months of hiring him if you find him good.
pravin
what about the problem of grade inflation? every gets A grade because our kids are oh so sensitive that they cant handle competitive pressures. this dumbing down of reality is not helping anyone
Praveen
But many of my friends who done MBA from some 5th/last grade MBA colleges done some SAP courses and many are drawing some 8 lac salaries pa now. So they say everything depends on faith.
Praveen
sorry., I meant ‘So they say everything depends on fate’
Srinivas Muthadi
Are we going to have an “Education Bubble”? Consequenses seem scary!
Akanksha
Rajeev,
Yes, I agree it is difficult to judge a person in a matter of few hours (minutes for companies who bulk hire engineers?) I was not talking about hiring students with lower grades/marks who might outperform the academically smarter ones in the future. I am referring to the unfair practice of companies which “grade” colleges as being top tier, middle tier, lower tier etc… And the wisdom of offering different salaries to students with the same or superior caliber just because they come from a middle tier college. I can see that we have some law of averages in play here, where students from top tier colleges may perform better than a middle tier college. BUT, isn’t it unfair to those who are exceptions to the law?
Speaking of opportunities once you start working, I would completely agree with you. It may take a little bit longer for the ones starting at a lower pay grade to catch up, but I would give it maybe 5 years to even out. But try telling that to an MBA graduate and he/she will just scoff at your offer. Just seems like a long time to us young people, but its not really that long is it? 🙂