Aon launched the Aon Campus Study 2019-20 to understand the campus strategy and compensation philosophy adopted by companies across different campuses. The Pan-India study garnered considerable interest and secured participation from 367 organizations across industries such as Hi-Tech, ITeS, Consumer Products, Services, Financial Institutions, Engineering/ Manufacturing and Life Sciences. The study provides in-depth insights on the hiring and compensation trends across different tiers of colleges and industries, across various educational qualifications, covering critical parameters ranging from Joining Bonus, Variable Pay, Stipend, Attrition, Benefits etc.
It is evident that despite the fact that the past few years have seen muted growth in hiring and the market has witnessed ups and downs; campus hiring has usually remained immune to change. However, with 24% organizations indicating a decrease in number of campus hires, as compared to 13% last year, this indicates resonation with the macro economic factors. Number of organizations indicating an increase in campus hires, has also dropped from 43% (in 2018) to 40%.
38% of these organizations state that dedicated campus team has been institutionalized for the past 3 to 5 years, thus clearly emphasizing the maturity with which organizations are deeply invested in the process of campus hiring. Not only do organizations focus on measures to enhance the ROI from their campus hires but also evaluate the efficacy of these hires.
Campus Hiring Strategy
Apart from statistical approaches towards hiring, organizations are also enhancing their campus strategies. This is evident from the fact that 70% of them have a dedicated campus program targeting different tiers of colleges for management trainees while 90% of the organizations state the presence of gender diversity targets while hiring from campuses. With steady movement in campus strategies, one foresees talent management in the transforming job market through the lens of a growing campus outlook.
- Emerging as one of the most popular metrics to attract desired talent, higher joining bonus is offered by 15% of the organizations this year (as against 8% last year), thereby laying impetus on the steady movement towards one-time payment offering at campuses.
- 91% of the organizations have indicated either stabilization or improvement in business performance while 9% have indicated a decline, as compared to 4% last fiscal.
- The positive campus compensation trajectory continues this year with 41% organizations indicating an increase in campus salaries.
- 64% of the organizations have stated the presence of a dedicated campus hiring team (majorly team size of 2 to 5) which measures strategic metrics such as Offer to Joining Ratio, Early Attrition, Recruitment day slots, Cost per Campus Hire, Gender Diversity Ratio and Internship to PPO conversion etc.
- 78% organizations tracking the metric of early attrition for campus hires indicate the impetus laid on addressing the growing concern of attrition amongst campus hires.
- 52% of the organizations classify early attrition as less than 1 year. The overall attrition has witnessed an improvement when compared with the past few years. Organizations cite multiple reasons from role mismatch to limited growth opportunities towards the inability to retain talent.
Brand Building Initiatives at Campus
In this era of business dynamics where millennials take over the workforce, employer branding plays a key role and companies are gauging the attention of prospective candidates through:
- Year-round Digital Advertising, Career Fairs, Informal Meeting and Hackathons etc.
- Alumni Connect and Networking Sessions are also being deployed
- This is closely followed by Live Projects and Case Study Competitions that have emerged as the most preferred initiative undertaken by organizations at campus.
Talent Mix Ecosystem
MBA Talent Mix
- 81% of organizations capture early attrition across MBA campus hires, out of which 57% of the organizations define early attrition to be Less than 1 Year.
- Highest attrition is recorded for Tier 3 at 12.7% while attrition rate for top tier (IIMs & Tier 1) colleges has reduced when compared to 2018.
- Organizations are willing to pay Overall Tier 1 campus hires 2.9 times that of Tier 3 and 1.8 times that of Tier 2 campus hires; while Tier 2 campus hires enjoy a pay differential of 1.6 times when compared to Tier 3 campus hires.
- 50% of the organizations have reported to pay Joining Bonus at MBA campuses, out of which only 15% of the organizations are expected to increase Joining Bonus amounts, while 83% of the organizations are expected to keep it similar to that of 2018.
- The median Joining Bonus offered at IIMs (A,B,C,L) is expected to touch INR 2.40 Lakh in 2020, as compared to INR 2.25 Lakh in 2019.
- Pre-Placement Interviews (PPI) & Pre-Placement Offers (PPO), are popular at the campus, with 80% of the organizations providing such opportunities to the students.
B.Tech Talent Mix
- B.Tech (IITs & Tier 1) compensation has displayed an average increase of 7.1% till 2018, but is poised to grow at only 3.1% annually from 2018. Tier 2 & Tier 3 campuses witness an average growth of 2.2% and 2.1% respectively since 2018, indicating a moderate growth sentiment.
- 75% of organizations capture early attrition for B.Tech campus hires, of which 53% of the organizations define early attrition to be Less than 1 Year
- Tier 3 graduates still account for the highest attrition. Apart from Higher Education reasons such as Role Mismatch and Limited Growth Opportunities contribute to the attrition for B.Tech graduates
- Organizations are willing to pay Overall Tier 1 campus hires 2.5 times that of Tier 3 and 1.6 times that of Tier 2 campus hires; while Tier 2 campus hires enjoy a pay differential of 1.5 times when compared to Tier 3 campus hires.
M.Tech Talent Mix
- 70% of organizations capture early attrition for M.Tech campus hires, out of which 50% of the organizations define early attrition to be Less than 1 Year
- While Tier 2 graduates account for the highest attrition, the attrition rate for Tier 2 M.Tech hires has dropped in comparison with 2018
- 54% of the organizations have reported that they pay Joining Bonus at M.Tech campuses
- 97% of the organizations have reported to offer internship programs for M.Tech with a median stipend (per month) of 35 K at Tier 1 campuses, which is 1.2 times higher than what is offered at Tier 2
- In addition to stipend, interns are also provided with transport facilities and accommodation in guest houses by 51% and 36% of organizations respectively
Analysis on Total Cost to Company provided in 2019
It is clearly evident that that Campus hiring has witnessed growth while at the same time, has shifted opportunity focus to Tier 2 and Tier 3 with top tier campus hiring seeing a definite growth as well. Compensation trends have seen an upward trend, albeit a marginal growth.
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Associate Consultant, Aon