B-Schools Seeks Auditors Help Regarding Pay Packets

Ahmedabad: Now, the B-schools are seeking the help of professionals to expose the pay packages offered by recruiters, so that they can help students understand their potential earnings better. As per sources, institutes like the Indian Institute of Management Ahmedabad (IIM-A) and the SP Jain Institute of Management & Research, Mumbai plan to appoint external auditors to decode the cost-to-company (CTC) that organizations offer management graduates. Moreover, others, like IIM-Lucknow are contemplating a similar step.

According to HR Manager with KPMG who does not wish to be named while pointing to some of the grey areas in salary packages has said that there have been instances where companies have included notional benefits and training costs in the CTC. Notional benefits could include month-long training at an overseas location, market value of accommodation provided or even a subsidised lunch in the company’s canteen. Experts say salary figures quoted by B-schools are not reflective of a student's take-home (net) remuneration, and could be confusing.

For example, last year, when IIM-Calcutta announced an average salary of  15.32 lakh, which was higher than IIM-A’s figure of 14.94 lakh, students in Ahmedabad accused the other institute of inflating the figures. Moreover, the charges, expressed publicly, showed that even IIMs do not follow a common plan for calculating CTCs. According to Rahul Thappa, a student enrolled in the post-graduate programme at IIM-A has said that portions of the salary such as the variable, bonuses and taxation components are few grey areas that freshers find it difficult to comprehend.

Moreover, according to the statement of an IM alumnu for freshers, salaries are the only metric they understand. There have been instances in the past, when B-schools have asked recruiters to include the cost of flight tickets or rental of the accommodation provided by the employer, in the CTC. According to Delhi-based executive search firm GlobalHunt, a 1 crore salary package bagged by the topper of a reputed B-school whittles down to a 50 lakh take-home. The remainder is subject to his performance and market conditions.

Also, anomalies like this have prompted IIM-A and SP Jain to put their own placement data under the scanner of an independent auditor. Prof Abbasali Gabula, deputy director (external relations and administration) at SP Jain has said that there is no system in place which can verify the data emanating from placements. There are no agencies to go through offer letters. Prof Saral Mukherjee of IIM-A reiterates that the issue of authenticity and transparency could only be addressed by an external auditor. Mukherjee, who heads the placement committee, has already come out with salary reporting norms that B-schools across India could follow.

Furthermore, among the other IIMs, Lucknow has indicated that it is open to having its salary data authenticated. IIM-A Calcutta, on the other hand, has said it doesn’t plan to. Prof Amit Dhiman, placements chairperson at IIM-C has said that external audits can give better credibility to data. In principle it is good. He also added that but once you have a system, a lot will depend on its practicality.