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Think MBA hype has died down? These 10 placement facts about MBA education will change your opinion

Sep 12, 2018 15:52 IST
10 MBA placement facts
10 MBA placement facts

‘MBA Hype ends’, ‘there is no career after MBA’ only ‘rich people can buy MBA degrees today’; if you are a MBA aspirant, you would have certainly come across such statements from your friends, peers, parents and even academic experts in the recent years. In fact, many have gone on to announce the death of management studies as an academic domain in the coming few years. But, the million dollar question today is that ‘is there any truth to these claims?’

Despite the negative mood in the MBA circles, the recently concluded MBA placement season data suggests that MBA is far from dead as a career option. If you also had any doubts with regards to picking MBA, take a look at these 10 promising MBA placement facts and you will surely change your opinion about it.

Note: All the Data used in this article is as per the ET Top Recruiters survey

1. Rake in the Moolah

Despite the general mood of ‘doom and gloom’ the MBA placements season 2017 concluded on a bright note with the number of students being placed remaining more or less the same. In addition to this, MBA graduates were also pleased to see that the average salaries being offered to them saw an average rise of 5 to 10%, which might not be at par with the previous years, but considering the current job market is quite satisfactory.

Talking about the average salaries, MBA graduates across India from top B-schools attracted a price tag of Rs 21.42 lakh. This clearly depicts a marginal rise compared to Rs 21.03 lakh of last year. On a similar note, the median salary being offered to management graduates walking out of top MBA colleges in India rose by Rs 1 lakh on an average to reach the figure of Rs 21 lakh per annum.

Keeping the average salaries and compensation being offered to MBA grads in India, management still is a far better option for millenials looking for a progressive career option.

2. Hefty Pay Packages

Coming to the individual packages now, even the salary offers being to MBA students saw good growth, especially when it comes to highest offer being made. XLRI – one of the most respected MBA colleges in India saw the highest offer of Rs 43 lakh. Although this number is dearer by Rs 5 lakh compared to last year, the package has to be looked at through the glasses of demonetization and general economic slowdown. As far as XLRI is concerned, the average salary saw rise of Rs 70,000 and went up to Rs 19.2 lakh.

On similar lines, we can also see rise in the packages being offered to students at IIM Kozhikode which had the max package being offered of Rs 37 lakh and IIM Kashipur which again drew best package offer of Rs 53 lakh.

In no other academic domain, would you see job offers being floated at such a high level, at times even for freshers. So, MBA degree if received from the right college and in-demand domains would surely draw you hefty pay packages that cannot be compared with anything else in any other field.

3. Top B-schools still in demand

While there surely is a slowdown as far as hiring of MBA graduates is concerned, but that is mostly concentrated to tier 2 level B-schools. MBA students walking out of campuses of top MBA colleges in India like IIMs, SJMSM and XLRI still continue to be quite high, as can be seen in the data provided above.

In fact, even the newly founded IIMs such as IIM Trichy also saw a massive jump in the maximum salary from Rs 23.8 lakh to Rs 33 lakh this year. Among the non-IIM B-schools, the Shailesh J Mehta School of Management saw the average package rise upto Rs 17.63 lakh as compared to Rs 16.5 lakh. Even Management Studies Departments at IITs saw rise in the package being offered to their students.

This clearly shows that there are plenty of MBA jobs in the market and the only thing required to get hired is a relevant degree from a respected and recognized MBA college in India.

4. Tier 2 Institutes see shrinking packages

The mood is not so great when it comes to Tier 2 institutes which have seen the salary packages being offered to their students shrink in the recent years. On similar lines, National Institute of Industrial Engineering (NITIE) saw the average salary dip to Rs 15.86 lakh along with the max domestic salary package of Rs 39.5 lakh for MBA students. Another, popular but not premium B-school i.e. WE school also saw the fortunes of their students turn grey with the maximum salary going down to Rs 15 lakh from Rs 21 lakh last year.

So, if you are planning to join any of the tier 2 level B-schools, be ready to face some challenges as far as pay packages are concerned. But on the brighter side, students from these B-schools also find several recruiters who are willing to hire them even in the slow economic environment.

5. Increasing dominance of PPOs

Another change that is a good development as far as MBA education in India is concerned is the rising dominance of PPOs or Pre-Placement Offers. Recruiters / companies are increasingly adopting the pre-placement offers route to get hold of young MBA talents. Companies are choosing to hire interns who had worked with them during the summer projects, as they are already familiar with their potential and familiar with their work culture and style.

This year, XLRI saw a significant rise in the number of PPOs being offered to the passing out batch. On similar lines, NMIMS also saw 42% growth in the number of Pre Placement Offers being made to their students. IIM Trichy (19% rise) and Symbiosis (37% growth) also saw a significant rise in the number of PPOs being made and accepted by the students.

6. Banking and Finance rule MBA world

Now coming to the more important aspect of MBA Placements i.e. identifying which domains still dominate the MBA job markets. As expected, Banking and Financial world which is highly dependent on excellent management tactics and principles, continue to dominate the MBA job markets. The dominance of BFSI (banking, financial services and insurance) can easily be seen through the fact that nearly 25% of the entire batch of IIM Shillong opted to choose offered from only one industrial domain. On similar lines, Faculty of Management Studies at Banaras Hindu University saw 47% share of BFSI in the overall placement numbers.

In terms of roles and job profiles being offered to MBA graduates are concerned, 2017 saw niche domains rise to the fore such as risk management, insurance management, securities management and investment banking also saw a significant rise in number of hires.

7. Ecommerce & IT and FMCG re-gaining ground

While 2015-16 saw a decline in the number of hires going to e-commerce and IT domains, this year these two made a comeback of sorts in the MBA placement season. Several IT Majors and E-commerce giants such as Amzaon were seen participating at the placement sessions at the top B-schools. FMS Delhi and IMI Delhi saw several MBA marketing grads being made respectable offers during the placement season. On the other hand, FMCG (fast-moving consumer goods) also saw rise in the growth of recruitment of MBA graduates, especially for the roles of marketing, sales and distribution profiles.

8. Public Sector Enters the Frey

Another very interesting development with regards to MBA placement season this year was the coming of age of PSUs. Public Sector Units such as SBI and Hindustan Petroleum Corporation saw rise in the number of offers being made to MBA graduates from top B-schools in India. XIMB (Xavier’s Institute of Management, Bhubaneshwar) saw 10 offers being made by SBI. Whereas newly founded IIM Udaipur and IIM Trichy saw 6 offers each being made by SBI to their students.

This trend is a very positive development and something that MBA students must watch out from. The Public Sector Units are now moving away from the bureaucratic setup and are looking to fill mid to high-profile positions with qualified, trained and skilled management professionals from top B-schools in India.

9. First-time recruiters also see growth

Another encouraging trend which emerged during the current placement season was the rise in the number of first-time recruiters who approached IIMs and other top MBA colleges to look for management hires. The move is seen as a win-win equation for students, institutes as well as recruiters as first-time recruiters are able to keep up the placement numbers in the current economic scenario.

In 2017, IIM Lucknow saw 52 first timers recruiters participate in the placement season. On similar lines, XLRI and SPJIMR saw 42 and 30 new companies participate in the placement sessions this year. IIM Indore also saw 20 new / first time recruiters who participated in the final campus placement season.

However, one thing all MBA aspirants keeping a check on MBA hiring trends must consider is that, while these companies are approaching IIMs for the first time but are still well-established and reputed companies in their own right. Therefore, as far as salary packages are concerned, they are easily able to match the average numbers are top MBA colleges in India. Some of the prominent first-time recruiters include Adobe, Alstom, Cipla, Cumins and other similar brands.

10. Start-ups Suffer

Finally, coming to the golden word that almost every MBA graduate would have somewhere at the back of their mind ‘Start-ups’. Since last few years, Start-up culture in India, especially in their core incubation centers of Bangalore and Powai (Mumbai) have seen several setbacks. With venture capitalists getting wiser and the funding frenzy coming to an end, the hiring potential of these so called ‘next-big’ things haven’t really materialized into anything substantial.

This can also be seen in the absence of start-ups at the campus placement sessions at top MBA colleges in India. The biggest success story of Indian start-up scene ‘Flipkart’ has been engaged in a constant war with global e-commerce giant Amazon. But, with funding dying out and no new revenue sources in sight, the company had to cut-back on the hiring budget this year.

This has been the story with major / well recognized brands that have been brought to the fore by the Indian start-up ecosystem. Ola Cabs and PayTM made their presence felt by hiring three students from IIM Bangalore, while Uber and Swiggy had one hire each from there. As far as others are concerned, there is nothing interesting to write-home about.

To sum it up…

So, there you have it! A complete evaluation of MBA placement season 2017 and what it holds in future for the MBA graduates that will walk out of India’s top MBA college next year. The report has certainly raised a few alarms as far as MBA recruitment in India is concerned, but there is no way to interpret these signs as a dying down of MBA hype or the scope of MBA education in India.

In no other academic field would you get average placement and salary numbers like the ones mentioned above. So, while there might a little bit of slowdown as far as MBA placements is concerned, but it certainly remains one of the most lucrative fields which a millennial can take up for a prosperous future ahead.

For more interesting updates and news about MBA placements and MBA job market, please subscribe to our newsletter. You can also find other similar stories about current MBA placement season here.

    DISCLAIMER: JPL and its affiliates shall have no liability for any views, thoughts and comments expressed on this article.

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