Industry
Hefty pay of IITians comes with strings attached
Summary
The median salary of IIT’s batch of 2022 was ₹22 lakh, a 7.8% increase from that in 2021.
Dazzling pay packages offered to India’s top tech grads come with strings attached, with many employers maintaining the fixed salary component as before while boosting elements such as variable pay, retention and joining bonuses, stock options, relocation benefits, hybrid working benefits and reimbursements for online learning.
The annual placement season at the Indian Institutes of Technology (IITs) kicked off on 1 December, with many companies, especially high-frequency trading (HFT) firms, offering salaries above ₹1 crore. The largest package of around ₹4 crore was offered by Jane Street Capital, a proprietary trading firm. A large variable part means the actual take-home salary will be much lower than the gross figure.
“About 15% of salaries at top-tier campus hires in 2022 consisted of variable bonuses. Another large portion included health benefits, online training, relocation and hybrid working opportunities. This year, despite inflation, the fixed component will remain the same and, given the recessionary mode, in some cases even fall," said Roopank Chaudhary, a partner for human capital solutions at Aon in India.
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According to Aon data, the median salary of IIT’s batch of 2022 was ₹14lakh, a 7.8% increase from that in 2021. Variable pay was 10% and is likely to go up to 15% in 2023.
“Companies are changing their cost-to-company (CTC) packages, and we have to figure out what will be their take-home and how much will come in later on. CTC is always a pipe dream, and the component mix gets tweaked every time," said a senior placement officer at one of the top IITs.
According to consulting firms studying campus hiring trends, firms which were earlier offering ₹10-15 lakh have raised their fixed component by a maximum of ₹50,000, but profiles which pay ₹20-30 lakh have seen all additions in the variable/bonus components.
“The fixed-to-other component ratio was 70:30 before the pandemic, and now it is 60:40, and in some sectors, it has become 50:50," said Anshuman Das, chief executive and co-founder of Careernet, a talent solutions provider that also studies campus recruitment trends.
Das said there were consulting firms whose ₹40 lakh salary for a domestic profile had a bonus component as high as 50%. “Retention or loyalty bonuses, too, are stretched over 4-5 years. This is not a euphoric year, and IIT campuses have seen a marginal uptick in overall salaries," he said.
While HFTs and quant firms were the top recruiters remuneration-wise, the internet behemoths held back on hiring this year. An HFT like Quantbox Research, for instance, offered a salary of ₹1.3-1.4 crore for domestic postings and ₹1.6-2.4 crore for global placements, but both profiles included a bonus of ₹80 lakh.
“The companies which are listed and have stock options—it is easier to understand what their valuation might be. However, many of the startups are unlisted, and although the salaries are high, it becomes difficult to estimate what their growth prospects are," said a placement member at another IIT.
The hesitancy about joining startups comes at a time when the sector has laid off 17,000-20,000 employees in India this year. Although they remain popular recruiters at the IITs during the placement season, students and placement teams have told Mint that they are going through funding details to check the stability of the companies.
IIT-Kharagpur announced on Tuesday that its students were offered 10 positions worth ₹1 crore to ₹2.65 crore both domestically and internationally from companies in several sectors, including analytics, software, finance, banking, supply-chain logistics, consulting, core engineering, high-frequency trading, technology profile, product development, etc. IIT-Madras has received over 25 offers with salaries over a crore rupees, while IIT-Delhi said that there was a 20% increase in job offers. The placement process across IITs is still underway.
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