The pecking order for recruitment at Tier 1 colleges is undergoing a dramatic shift, owing to the influx of start-ups. Start-ups are competing head-on with MNCs by offering very high packages, stock options and an opportunity to work on latest technologies for Tier 1 college graduates.
According to a recent study finding released by Zinnov, a leading management consulting firm on ‘Campus Compensation 2015’, exclusively for the MNC R&D centres in India indicate the median CTCs offered by companies at Tier 1 campuses is INR 15.5 lakhs.
The CTC includes base salaries, variable pay, joining bonus and stocks. Companies are increasingly using stocks and joining bonus as mechanisms to attract top talent and gain a Day Zero slot in Tier 1 colleges for recruitment. The value of stocks and joining bonus combined may vary between INR 4 to 10 lakhs from company to company.
Talking about the study, Anand Subramaniam, Program Manager (G.A.P), Zinnov said, “Companies use the strategy of onetime payments like joining bonuses and stocks in order to manage internal parity on the base pay in their organizations.”
The average salaries paid to Mechanical and Electrical engineers at Tier 1 colleges are about INR 7 Lakhs. Also, the practice of giving joining bonus and stocks is not very prevalent in the Mechanical sector.
Subramaniam added: “High salary packages are being given to graduates from Computer Science and related streams by Software/Internet R&D companies and start-ups. However, interestingly, companies in the Mechanical and Electrical R&D space are able to source talent from the same institutes at a much lower price.”
See: Indian Start-Ups are betting big on Innovative HR Policies
Retaining talent hired from Tier 1 colleges continues to be a challenge for employers with freshers tending to leave for higher studies after a year or two. While many companies leverage the potential of the hires within these two years to justify the Return-on-Investment (ROI), some companies are opting to hire from Tier 2 established colleges like NITs and IIITs or hire M-Techs from IITs.
Increasingly, MNCs and other companies believe that they are able to find equally good talent at Tier 2 established institutes and Tier 2 emerging colleges like PESIT, M.S Ramaiah at a much lower cost. That said, companies employ stringent screening processes for these colleges to short-list and identify the right fit for the organization.
MNC R&D centres on an average pay about INR 8 to 9 lakhs to graduates from Tier 2 established campuses and about INR 6 to 7 lakhs to Computer Science graduates from Tier 2 emerging colleges.
The battle between start-ups and large MNCs for attracting and hiring the best talent has just begun, and is only expected to increase further in the near future. A recent McKinsey survey of senior multinational executives from India found that few companies were providing opportunities overseas in line with the aspirations and capabilities of ambitious managers.
MNC R&D centres in India need to adopt innovative mechanisms in addition to compensation to gain a competitive edge in this talent war.
Also read: India Inc HR Heads Shifting Loyalties to Seek Newer Greener Pastures
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