One of the most attractive things about an MBA is the stellar placements and the allure of the paychecks that are offered by various companies. But, most of us are not aware of how these salaries are computed and how much salary does one REALLY take home.
It is important to make this analysis before falling for the claims by many institutes. Weighing the financial returns would help you make an informed decision both while joining a B-school and appearing for your placement interviews.
Fact 1: Average Packages are NOT a good indicator of the Placements Scenario
We know that there are 3 measures for central tendencies – Mean, Mode and Median. Mean is the average of all the data points. So, in case one of the values is enormously large, the mean of the data would also significantly increase. This usually happens in case of an international offer. Consider a B-school with 50 students where 3 students bagged an international offer of 55 LPA, then automatically the mean inflates.
To counter this effect, it is better to look at the median stipend, as it indicates the middle value when all the salaries are arranged in increasing order.
Fact 2: The truth about International Placements
While a lot of international placements seems to lure the aspirants, one must carefully consider other factors too. For Example: Income Tax rate in USA is 35%, which is significantly more than India.
While the value of the package might seem alluring when multiplied by the exchange rate. However, as long as you are working in a foreign country, you must pay attention to the purchasing power parity of that specific geography.
Fact 3: Variable Package and Joining Bonus
When you assume your role for the first time in a company, many of them offer a joining bonus of around 1 to 2 Lakhs. Evidently, it is not a part of your recurring salary.
Besides, almost all the job offers consist of a variable package linked closely to one’s performance. In the placements report, B-schools usually consider this figure to be 100% to inflate the average and the median stipend value.
Fact 4: List of Recruiters in the Placements Report
B-schools certainly want to impress you with the list of the recruiters who visit the campus. However, not all of these recruiters would visit the ‘campus’ for placements. Some of them might recruit students through Case Competitions.
Some of them might just come for summer placements and not for finals. Many FMCG firms have a strong PPO policy through which they recruit students.
Fact 5: 100% Placement Record at B-schools
Sometimes students opt out of the placement process to pursue entrepreneurship or join their old business. In this case, the placement report does NOT accurately cover the status of the offer made to all the students.
However, oftentimes, the institute mentions the number of students who are eligible to participate in placements and the number of ones who opted out, which is an essential element.
These are the things you should be cognizant of while you are browsing the Placement Report of an institution. Also, consider other factors such as academics, alumni base, networking opportunity while making the decision of which college to join. You must extract the most of the 2-year life at B-school.
Content Courtesy: insideiim.com
IIM,Placement,MBA,B-School
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