How Much Do Graduates of Indian B-Schools Earn?

Survey of graduates of India’s top 200 business schools places the Indian School of Business in the top spot, but the IIMs follow close behind

Indian business schools: the ones that offer the highest salary on graduation don't offer the highest return on investment

In India, as elsewhere, students graduating from business school are hoping for a job with a fat pay check that gives them a great return on their investment in school.

Tuition fees at Indian b-schools average around Rs 5 lakhs (£7,000) per year and are often funded by taking a big chunk out of the family savings.

With this in mind, market research firm Digital Mailers surveyed 18,390 graduates from 200 business schools across India on the cost of their education and their current earnings

The Indian School of Business (ISB) Hyderabad ranked top, with salary at graduation averaging Rs 16 lakhs (£22,750). ISB, currently ranked twelfth globally according to the FT rankings, was followed by three of the Indian Institutes of Management (IIMs); Ahmedabad, Bangalore and Calcutta; providing salary packages around Rs 11.76 lakhs, Rs 11.25 lakhs and Rs 10.63 lakhs respectively.

Average salaries on graduation were estimated for the top 75 business schools in India. The lowest salary within this group was around Rs 3.07 lakhs (£4,350) for someone graduating from Badruka Institute of Foreign Trade in Hyderabad.

With the economic downturn affecting many countries across the world, a key question s whether job opportunities for b-school graduates in Indian are growing or shrinking.

VK Menon, Senior Director of Career Advancement Services and Admissions & Financial Aid at ISB thinks that the demand for premier management graduates in India is growing:

“Leading companies in various sectors showed an increased demand for talent, compared to last year. The prominent ones among them were technology, consulting and finance, with ‘Green Energy’ emerging as a new category.

“Other sectors which showed an increase in demand for talent included pharmaceuticals and healthcare, infrastructure, real estate, media and energy.”

“Many of the recruiters at premier campuses are MNC’s and large corporations,” he added. “Last year, we had 346 leading domestic and international companies participating in the placements process at ISB; we also witnessed an improvement in compensation levels over last year.”

But how easy is it to find a job right after you graduate from a top b-school? Does it nevertheless take several sleepless nights and considerable effort?

Sindhu Kakade who will graduate from ISB in 2011, wants to work within “green marketing” in a consumer goods or pharmaceuticals firm.

She doesn’t believe that ISB grads need to make a minimum number of applications. “It entirely depends upon the potential of the candidate and to some extent the present economic conditions… Mostly an ISB graduate will have multiple job offers when he or she graduates… 346 made job offers in my year.”

But while ISB graduates enjoy the highest salaries in India, they don’t get the highest return on their investment. According to the Digital Mailers survey, graduates of Sona School of Management in Tamil Nadu get the highest rate of return on their fees.

ISB and the IIMs do not make the top 25 for return on investment, though they are of course the schools with the most prestige.

Kakade does admit that some of her classmates have not found their dream jobs yet. She says there are two possible reasons for this.

“If the candidate is aspiring to an industry or role where she does not have work experience in, then because of the mismatch between her skills and the company’s needs, she may not get that job.

Secondly, such a job may not be available during campus recruitment. However, when tried off-campus through the network that ISB has built over the decade, there is a possibility of getting the job.”

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Comments

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Wednesday 5th January 2011, 23.50 (UTC)

Jen Ten

sounds a tough job market... is there much sexism, or do female grads have just the same opportunities as males?

Thursday 6th January 2011, 05.25 (UTC)

Sindhu Kakade

There are some corrections to this article:

I graduate in 2011.

The placement facts are not correct.

http://www.isb.edu/pgp/Placement_Highlights.Shtml

I think we often look the concept of ROI myopically. One should look at ROI by including the career progression a graduate gets post the first year of his/her work (include bonuses etc). This is very impressive among our alums, compared to other B Schools.

And to answer Jen's question, I do not believe that sexism exists in the job market.

Thursday 6th January 2011, 17.14 (UTC)

Miguel Suarez

I don't see any mistakes in the placement facts. The article talks about indian people in India. The percentage of graduates who go abroad is roughly 11%, but there is no disclosure on the conversion rates used (PPP, exchange rates).

I definitely agree that ROI is on your personal delta and perhaps not on the data specified on the placement reports as such, but it does help to do comparisons among schools.

Thursday 6th January 2011, 17.32 (UTC)

Sindhu Kakade

Rashmi, Thanks for the correction!

I really appreciate it!

Best,
Sindhu

Thursday 6th January 2011, 17.43 (UTC)

Maria Ahmed

Sindhu I've corrected your year of graduation in the story. Apologies for the error.

Thursday 6th January 2011, 17.53 (UTC)

Sindhu Kakade

Thanks a lot Maria :-)

Miguel, ROI is just a number and could be misleading even while comparing B Schools within India. Because while we look at the outgoing versus incoming, we ignore the value that each B School has to offer that cannot be compared.

In India, we have thousands of B schools and lakhs of MBA's graduate every year. So while the salaries in currency can be compared, the designation where these students occupy and the value they deliver cannot be.

Its an apples to oranges comparison, which misleads. Its like saying 20 divided by 40 and 100 divided by 200 is the same :-)

Clearly you have to look at the inputs and outputs to "compare" B Schools.

Thursday 6th January 2011, 19.21 (UTC)

Miguel Suarez

That is totally true. I think that the main focus is on your personal delta, because it is certainly misleading to compare salaries. However, it does give you a broad idea of what you can find at a school (in general). But this broad idea will tell you only about a group of people and not much about individuals.

If you recruit superstars, then you will get superstars upon graduation. But there is no way to measure inputs vs. outputs. The closest there is will be salary increase, but it still involves many factors that blur the whole image.

Some time ago I read an article in the New Yorker by Malcom Gladwell that talks about these points. It's really interesting, try checking it out if you have some time. He is a great thinker...

http://www.gladwell.com/pdf/getting_in.pdf

Friday 7th January 2011, 16.36 (UTC)

Shammi Gaur

Being a MBA aspirant I can certainly relate to the discussion above. Am planing to move to UK for a MSc degree this year. I understand that ROI should not be the prime factor on which an individual should decide to go for a B- School or not but some where down the line you tend to think about it. A lot of students here cannot fund there education themselves and that is when they go for big loans and they end up calculating the ROI for each B-School.

Wednesday 13th July 2011, 14.05 (UTC)

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Thursday 19th January 2012, 16.39 (UTC)

Vijay

I am a graduate from one of the top business schools of the world. Funny thing, international degrees are not appreciated in Indian market as students are picked directly from campuses here. Making external job application doesn't help as the positions are already filled.
ROI in terms of value creation is great if you graduate from international B-school but this value is brought down in the Indian market.

Friday 20th January 2012, 10.45 (UTC)

Tushar

I am a recent graduate of one of the top European Business Schools. I never understood the logic of Indian MBAs in different depts like HR and finance when MBA is a general business study with an overview of every department to train experience technical or even non technical professionals for an entry level management role. To enter an industry, for instance Finance, one requires to do a specialist masters, keeping which in mind modules of master courses are prepared (One which has been recently introduced in IIM-A curriculum). I think IIM-A understood the need for such a course but was apprehensive to introduce it earlier succumbing to corporate demand of MBA graduates.

Now, whichever business consultancy firm I go to as an applicant to an Associate's role I am told that they are unable to hire lateral hires due to company policies. And most of these companies are equal opportunities employers. After a few weeks of job hunting I have realized that there are ample job opportunities but not equal opportunities. The corporate can argue that top Bschool graduates are aspired to be intellectually sound because of long hours they have invested in the efforts to get admitted in these Bschools. However, I think that does not impart decision making skills or integrity. Something that even corporate journalists have many a times agreed to (Would have mentioned the source to this had my university database membership not expired)

I completely agree with the first poster on this blog, who mentions about ROI in terms of value addition. I am an Indian by all aspects regardless of the geographical basis of my post graduate degree, however after witnessing the western standard of education and the corresponding western corporate culture I am an avid supporter of their level of understanding of needs of youngsters.

Too much untapped potential is available in the market but most of it is sought at a relatively smaller intellectual boundary. I challenge this article's methodology to calculate the ROI and welcome ideas about a methodology of calculation of ROI in terms of values imparted in their students by India's top B schools.