Monday, March 26, 2007

Placement at IIMA

You know it's placement time at IIMA when you see men and women striding along briskly in suits- a refreshing change, I daresay, from the rather shoddy attire on display in normal times. You can also tell from the upmarket taxis you see in the parking lot. We faculty are on the old campus. All the placement action has moved to the new campus. So, we catch a lot less of the buzz than before.

Wondering what is placement time at IIMA? Good question. Placement happens in two lots: lateral placement (for people with more than a year's work experience); and final placement (for the majority). We now have three programmes running: our flagship, PGP, PGP-ABM (the agriculture program) and PGP-X (the one year program for executives).

Lateral placement for the first two happens in January and February and final placement in March. For PGP-X, the process starts in December. Then, there are the privileged few who land PPOs- pre-placement offers. These are people who are offered permanent positions on the strength of their summer internships. This year, there were 81 PPOs, although not all got accepted: some of the recipients participated in placement in the hope of doing better. In the lateral placement category, there were 28 acceptances this year.

Ah, I mustn't forget. We have Summer placement as well. That happens in the middle of the second term- sometime in September/October, I would reckon. Also, placement is not just about the final interviews. We have pre-placement talks and presentations, which start well ahead of the placement interviews. Effectively, you could say that the Institute is now in placement mode for half of any academic year- this is a subject on which there is some muttering from the faculty. Too distracting, they say.

Salaries at IIMA keep soaring. It's the international offers that grab the headlines. This year, top salaries (based on minimum bonuses) were of the order of $225,000. The highest domestic salary for Rs 60 lakh. The average international compensation was Rs 115,300 and the average domestic salary Rs 13.6 lakh.

A key question for us is: are we on par with the top b-schools in the world when it comes to placement? The Financial Times' list of b-schools shows that the top three b-schools in the US had an average placement salary of $160,000. Ours, as I mentioned above, is $115,300. I have a few observations to make on this:

  • The average salaries at IIMA and those at US b-schools can't be directly compared. The typical b-school product in the US has at least three years' experience. The majority of our students have less than a year's experience. On the face of it, it appears that on an "experience-adjusted" basis, our average international salary of $115,300 would not compare unfavourably with those in the US b-schools.
  • However, I am not sure whether the compensation package is counted in the same way here and abroad. Our package includes the cost to the company, including sign- on bonus and year-end expected bonus. Going through the FT list, I get the impression that US b-schools include sign-on bonus but not year-end bonus. But I could be wrong. We need to do some research on this.
  • Suppose, we assume that the composition of the package is the same at IIMA and in top b-schools in the US. Are we then equal after adjusting for work experience? Not quite. The average international salary at IIMA is for 61 students or less than a quarter of the batch. Harvard Business School's average is for a batch of over 900. We would equal the top US b-schools only when those looking for international placement (at least 150 in a given batch) all get placed internationally and at an average of around $120,000. By that yardstick, we still have some distance to go.
  • One gratifying sign for us is the level at which some of our grads with experience are getting placed. Some international firms (such as Deutsche Bank) are offering the Associate level to IIMA grads with, say, two or three years' experience. That is the level at which a US b-school would join. Other investment banks absorb our products at the Analyst level. Goldman Sachs won't compromise and puts our grads at the bottom of a three-year Analyst program after which they become Associate. Lehman Brothers takes people at the second or third year level. And so on. The consulting firms mostly take our products for their India offices on Indian salaries.
  • A better direct comparison might be between our PGP-X placement salaries, rather than PGP salaries, and those abroad. But this comparison too is flawed to some extent because PGP-X is a one-year program. Moreover, the top investment banks, who really determine the average international salary, have not shown themselves receptive to the PGP-X product. Once that happens, IIMA will have achieved a breakthrough.


V said...

Hello Prof. Ram Mohan,

Just read your blog. Thanks for the unadulterated and upfront views!

I have a question stemming from an observation you made last year. How was the international placement this year (March 2008) for the PGPX-II batch in the area of finance? Was there a difference in the corporate response this year? Or, is it an area which needs a couple of years to develop?

Thanks and regards!

Anonymous said...

hello Prof ram mohan,

Thank u for the information.It was quite an interesting read!!!

i just wanted to ask u something on the salary averages u mentioned.
Is it true that the highest salary of an iim a grad can ACTUALLY equal the salary of mediocre student(cant be mediocre-if he got harvard) at harvard ????

Sud said...

sir, i would like to know what was the lowest domestic salary for PGP students who got through by CAT

Anirudh said...

Is sallary the only way to judge the performance of a B-School.
What about the number of publications per faculty, the diversification of students, the courses offered, the performance of faculty in the chanding times, the faculty ratio, the work experince of the faculty..dont those thing matter or not...

Krishnakant said...

what is the minimum criteria for a company to come at IIM like min. salary offered or business turnover more the 100 crores.