Compensation offered to graduates saw a steady 5.2 percent compound annual growth rate (CAGR) over the past five years across various degrees, despite a reduction in placement budgets, according to Deloitte India’s latest Campus Workforce Trends 2024 study.
However, 2024 was an outlier in the half-decade under review. The survey, which gathered data from over 190 organisations and across 500 campuses, showed that for the first time in five years, in 2024, the projected salaries for management students (viz. MBA) dropped by 5 to 10 percent across tiers. As a corollary, students' expectation of starting salaries also experienced a similar decline.
Another finding was that the variable pay component of salary rose by 250 basis points over the past year, indicating a shift by employers towards higher performance orientation.
Further, internship intake by organisations was reduced by 10 percent on average, indicating a declining trend in new hires. Similarly, pre-placement offers fell an annual26 percent. Complementing it, campus hiring budgets saw a 33 percent drop in the past year.
According to the report, skills are taking centre stage. Organisations are pivoting to specific skills/competency clusters within the educational stream while selecting their talent. For example, AI/ML or artificial intelligence/machine learning in engineering, social selling in management and computational biology in pharmaceuticals are the most in-demand skill segments. Accompanying this trend, expectations from campus students are pivoting towards management consulting roles for MBA specialisation and data scientist for technology talent.
Attrition
Talent retention remains a significant challenge, especially among MBA graduates. Overall, one- and two-year attrition rates for top-tier campuses stood 21 percent, 26 percent and 28 percent, pan-India. These rates are slightly lower for tier 2 and tier 3 campuses at 19 percent, 21 percent and 25 percent, respectively.
Despite higher attrition rates, 70 percent of organisations actively seek MBA graduates, reflecting their importance in business success, and a 5.2 percent CAGR in compensation over five years. Notably, year-on-year compensation fell for the first time in five years across tiers of MBA talent and in the top 10 tiers for M.Tech and B.Tech. This was reflected in a 26 percent decline in pre-placement offers across degrees and a 33 percent reduction in campus placement budgets.
The shift suggests a focus on a more thorough skills assessment and a strategic reallocation of resources for streamlined hiring practices, the report said.
“This year’s study reveals a critical need for organisations to rethink their retention strategies, especially for MBA graduates, where attrition rates are alarmingly high. Innovative practices are no longer optional but essential for retaining top talent in a competitive market. It further reveals that currently, four of every five executives favour decisions on hiring, pay, promotions, etc., based on skills over job history or network, citing reduced bias and improved fairness. Thus, there is a need for educational institutions to equip students with the multifaceted skills to succeed in the digital age,” said Neelesh Gupta, director, Deloitte India.
Diversity and inclusion
The report underscores significant progress in workplace gender equality and diversity hiring. Female campus hiring increased in FY24 compared with that in FY23. However, the availability of gender-diverse talent remains a challenge, especially in the engineering stream.
A rise in various initiatives also supports the hiring of differently-abled individuals and those with diverse gender identities. Targets for hiring differently-abled employees increased from 5 percent in FY23 to 9 percent in FY24, while LGBTQIA+ hiring targets surged from 8 percent to 20 percent.
Further, the survey reveals distinct location preferences for different disciplines. For engineering graduates, Bengaluru, Hyderabad and Chennai emerged as the top destinations, likely due to their thriving tech ecosystems, prestigious universities and robust job markets.
In contrast, for students pursuing management degrees, the top three preferred locations were Bengaluru, Delhi and Mumbai. Bengaluru's reputation as an IT and startup hub likely makes it attractive for management students seeking opportunities in diverse industries.
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