Industry
B-school grad? You may be paid less this year
Summary
- The market for most jobs remain in hibernation mode, and campus placements are no different
A Deloitte report recently highlighted a 33% reduction in campus placement budgets for 2023-24 when compared with the year before. This is the first time projected salaries of MBA graduates have actually dropped. Mint explains what has changed.
How have campus placements done?
The 2024 recruitment sessions have been a drag. In fact, the market for most jobs remains in hibernation mode. While some IT service firms like TCS and HCL Technologies recruited from campuses, the overall sector did not need freshers in large numbers as their bench strength was sufficient given the current demand. The shift in demand and supply with, employers maintaining the upper hand, is unlikely to weaken in the coming quarters for consulting, consumer goods firms and established startups. Top engineering and B-schools have struggled to attract recruiters this placement season.
Also read: Crunch season at IITs as many students yet to find jobs
Have overall campus salaries gone up?
While salaries in campuses have grown 5.2% CAGR over the past five years across various degrees, there has been a 33% cut in campus placement budgets (expenditure related to end-to-end hiring) in 2023-24 compared with the year before. The number of international offers from high frequency trading firms and global consultants has dropped due to the global economic slowdown. Last year, the highest offer— ₹3.7-4 crore per annum—was from Jane Street, a trading company. That number is yet to be breached this year. Many companies are looking for skills in AI. Generic skills command lower salaries.
What about the salaries of MBA graduates?
Deloitte says the salaries of MBA graduates will see a 5-10% drop for the first time. In fact, students’ expectations are down 7% in 2023-24 versus 2022-23. The fear of remaining unplaced has prompted many to grab the first offer without negotiation. Domestic investment banks, fintechs, robotics and SaaS-based startups hired from B-schools but the number was lower.
Also read: Recruiters shift focus from IT as hiring remains slow
What explains this lower offer amount?
The better offers in B-schools used to come from multinationals. These companies have tightened the belt on hiring because of fewer projects and geo-political tensions. Further, the IT sector’s slowdown impacted not just engineering colleges but also B-schools due to muted hiring by global capability centres, IT services and product firms. Companies have focussed on retaining their talent via promotions and role changes. Attrition rates dropped, which, in turn, moderated the need to hire management graduates.
What sorts of students do firms want?
Pre-placement offers or offers made to students during their internship fell by 26% across all degrees in 2023-24. Experts say that some skills are no longer needed. Coding, for instance, is already losing its spotlight. And engineering graduates may need to re-skill in new areas such as generative AI. B-school grads will need to work on industry projects that look into ESG and AI. The pressure on freshers will remain as firms will look for experienced candidates who have the required skills and need little training.
