The stories of fantastic placements of MBAs are running on media these days. The salaries being Quoted are just above the roof. The Category A colleges are 10+ domestic, Grade B 8+, Grade C 6+ lacs per annum. Now what is driving these high salaries, I think the following five factors-
1. The profile of people doing MBA is improving. More and more ppl with experience are doing MBA and they are looking at top 15 colleges depending on their experience quality. Thus the input talent in these MBA Institute is going up. The ppl fresh out of these colleges are capable of taking more responsibilities. They all already aware of the corporate environment. The freshers in these colleges also get a more professional environment improving their quality or attitude toward work. Thus for this more "ready to take it" resource companies are ready to pay more.
2. The already existing MBAs from top institutes who joined IBanks, consultancies abroad in the past few years have been delivering good results at par with the MBA Grads BSchools abroad. This has given them more confidence grads thus they have increased their Intake from Indian Schools. This also relates to the good I Banking Scenario globally thus their requirement for MBAs has gone up and the international salaries are in multiples of indian salaries.
3. Because of reason two above people from top colleges are going after international jobs. This is making the Indian companies which used to pick guys from the top colleges are forced to move to grade B colleges as they cannot match the salaries of foreign recruiters apart from this the traditional Indian Businesses are also witnessing high growth. Thus their incremental managerial power is coming from the Grade B colleges.
4. The high degree of growth in IT/ITES companies which has increased their demand for the MBAs these companies are knowledge driven thus their requirement of MBAs is much higher. These companies which used to go to top few colleges are now scouting for talent in all possible B Schools.
5. The current capacity MBA colleges is low and talent pool availability is low. This is making the Prices to go up. Too many recruiters chasing too many MBAs.
Whatever might be the factor the salaries are improving and so are the Job Profiles.
How long this can continue?
I think till the economic cycle last which definetly will last for next few years. But when it lasts will the salaries go down. Had India been a developed Economy it would have happened. But the growth of Initials salaries will drop then.
Thats my analysis of the situation which I am seeing, and being an MBA and working for last two years and pretty closely following the issue.
Please post ur comments:
3 comments:
welcome back to blogging...and a nice post...
I think the rise in salaries is going to continue till there is a shortage of quality manpower and till the time our salaries trail that in the developed world adjusted for PPP.
As you said the rise in salaries will continue till the economic boom continues and then the economy will statbilize and so will the rise in salaries. Since people would become used to see rise in slaries they will call it a downturn.
Due to these reasons i often thing one of the key factors that Magazines or for that matter any institution who tries to rank institute must take some more importnat factors into consideration that just the salaries received and companies visited. The other factors could be:
1. Average growth of the salaries of alumunus over a period of 5-10 years. This gives a good idea of the long term learning that the institute imparted.
2. Average period for certain number of alumunus to reach the higher management in their companies. This would indicate how much leaders did the institute produce or only plaine managers to get in the job and get the their monthly salaries..
3. How many people in every batch is taking the entreprenaurial route. This is being covered by some magazines now.
4. How many people actually succeeded and how many failed in their startup. This is a tricky one because no one wants to let the failure be visible.
5. What was the benefit of being from a certain institute whil going for a startup, networking, funding, ideas etc. Networking is covered in some places but funding and idea support is not.
And their could be more such factors to be included which would give an idea of the long term approach or the short term approach. Once the economy growth slows down the first to face the heat of drying growth in salaries would be who are riding on growing economy.
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