Appeared first in Business Standard, Rediff.com, Indian Management
Top notch salaries reaching a new high are falling into the laps of one-year full time MBA graduates.
Let’s consider the salary statistics for IIM Indore’s one-year full time MBA class of 2011 (EPGP), which requires students to have a minimum five years’ work experience. Cost to company (CTC) figures in the 2011 EPGP and PGP placement reports for IIM Indore tell a compelling story.
The mean domestic salary for the people graduating the one-year full time MBA (EPGP) is Rs 17.75 lakh and for the people graduating the two-year full time programme (PGP) is Rs 14.06 lakh. The complete placement report for EPGP can be read at http://bit.ly/plepgp.
The contrast in salaries is starker at IIM-A, where the minimum work experience required is closer to seven years. An all-time high international salary of Rs 1.35 crore ($300,000) was offered to a one-year full time MBA (PGPX) graduate in 2007 http://bit.ly/plhigh.
The detailed 2011 PGPX (http://bit.ly/plpgpx) & PGP (http://bit.ly/plpgpa) placement report for IIM Ahmedabad shows the following CTC figures for graduates of the one-year full time MBA and the two-year PGP:
- One-year full time MBA (PGPX) mean domestic salary – Rs 27,13,974
- Two-year full time programme (PGP) mean domestic salary – Rs 16,36,346
- One-year full time MBA (PGPX) minimum domestic salary – Rs 18,40,000
- Two-year Full Time programme (PGP) minimum domestic salary – Rs 8,00,000
- One-year full time MBA (PGPX) maximum domestic salary – Rs 42,02,997
- Two-year full time programme (PGP) maximum domestic salary – Rs 37,00,000
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In 2011, the average salary received by the one-year batch at IIM C was Rs 19.66 lakh and at IIM B it was Rs 20 lakh. Indian School of Business, which popularized the one-year format, quotes an average CTC of Rs 17,92,000 for its 2011 batch. SP Jain, Mumbai mentions a 15.63 Lakhs average salary for its one-year MBA (PGPM).
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Companies recruiting from the one-year full time MBA include all the prestigious firms that recruit from the two year programme. So for instance at IIM A, companies such as JP Morgan, Goldman Sachs, KPMG, McKinsey & Co., Booz Allen Hamilton, Deloitte, GE, Ernst &Young, Arcelor Mittal, General Motors, HSBC, IBM, Oracle, Microsoft, Unilever, Google, and Ericsson pick up talent from campus.
The placement process of the two courses is, however, different. While the two-year course has a ‘placement week’ and talks about ‘day zero placements’, the one-year course follows a rolling placement model, as is the practice at most international schools. What this means is that recruiters visit the campus throughout the year to pick suitable candidates. This is because the candidates of the one year course are hired for leadership roles, not entry level ones, and this requires a different approach to hiring.
For example, the typical scenario is that a single company may come to a B-school and pick up 20 two-year full time PGDM/PGP students as management trainees and later assign them specific tasks on induction. The hiring from the one-year full time MBA instead will be for candidates with very specific skill sets and for senior slots, such as General Manager & Vice President. For this kind of recruitment, interactions between candidates and recruiters happen over a longer period, with recruiters engaging closely with the candidate they would like to hire.
Placements for both the two year course and the one-year full time MBA are student driven. The institutes provide no more or no less help to the one year candidates than they provide to the two year ones.
However, I would like to add that, at times, one or two candidates from both the two-year course and the one- year course do not get the kind of role they are looking for. In the context of a student of the one-year course, this can happen when a candidate is looking for a drastic career change for example, from IT to finance, after seven-eight years experience in IT. This kind of transition is difficult, not because of any shortcoming in the one-ear course, but because after this quantum of experience in a specific area the recruiter can place the candidate neither at a senior level in a new role nor at a trainee level in a fresh role. A candidate facing such a situation might chose to rejoin his previous employer in a higher role.
Building managerial skills on a base of past experience is the stated goal of an MBA and the one-year full time MBA deliveres well on that promise.
I would advise students to change their approach to judging the worth of an MBA course – from a single-minded focus on placements offered by the course to the ability of the course to transform them into leaders. You would be surprised to know that no international B-school promises placements. This is primarily because their class profile, similar to the class profile of the one-year full time MBA at Indian B-schools, consists of candidates suited to highly specific roles – roles that are sometimes not available. It may come as an eye opener for many that at Harvard, considering data from 2007-2012, on an average, 20 per cent of the MBA class was not placed at the end of the course and 10 per cent was not placed even 3 months after graduation! Does that change the standard of the MBA at Harvard? Not at all!