MBA Fresher Hiring to boost in 2015 – What B-Schools students should do?

A steady growth in hiring of MBA graduates is expected in 2015. Thanks to a forward-looking government at the centre and the majority support with them. Not only local, but global hiring trend is expected to see a uptrend in 2015. Graduate Management Admission Council, organizers of the globally accepted GMAT score, revealed that 9 in 10 employers hiring B-School graduates will either maintain or increase the number of offers to be made at campus. Also, more than half of the employers stated that they will increase the starting base salary being offered to MBA Freshers.Talking about India specifically, many companies are targeting to boost up their MBA hiring straight out of campus. Future Group, Citi, Godrej, KPMG, Whirlpool, PwC, Vodafone and Snapdeal have already acknowledged the increase in MBA fresher hiring this year. While companies across sectors have ambitious plans to increase campus hiring, they are looking at differentiated strategies — psychometric assessments and tests to select the right set of candidates, customised onboarding initiatives and even innovation challenges to pick out the best of the lot.

All looks good. So now is the time to think of what can you, as an MBA graduate, should do to grab the best of this opportunity. Grades definitely make you stand out of the lot, but are not the only criteria that companies evaluate.

Below are few things that should be worked upon in this coming placement season:

  1. Prepare yourself for new hiring methods: Companies are looking forward to adopt new and evolved hiring methodologies this year. So, it is time that you start preparing yourself to answer tricky psychometric tests, face group tasks or may be an extempore.
  2. Keep yourself updated: General and Business awareness are more important than what everyone think. A single fact stated in a group discussion or in the recruitment interview can turn the direction your way. Stating numbers from authentic sources always help in breaking into a discussion. Thereby, it’s time that you should read newspapers, journals, and magazines or may be few novels about which you can always talk about.
  3. Have an opinion: Everyone wants a candidate who can stand up for his/her role in the company and one of the criteria to judge this is identifying a candidate who stands by his opinion. Obviously to build an opinion on a subject, you will have to read and re-read at times in order to partially memorize it. Things will automatically flow when required if you have ever read about it somewhere.
  4. Hone a Hobby: Yes, you read it right. Developing a hobby can prove to be unfairly advantageous especially during personal interviews. Imagine a case where the only common thing between you and the interviewer comes out to be your ability to play a guitar. You can impress just by the sheer knowledge or dedication which you have shown towards the instrument. A lot of interviews at some point of time drop down to reading books. And if you have had a knack of reading books, you are half way through.

It is time to make the most out of the opportunity coming your way in 2015. We hope that you come out with flying colours in this placement season and keep shining on.

Good Luck.

Arpit Srivastava

5 hidden costs in your CTC

Campus placement is fashionable today. Students feel very proud and happy to share with others about their pay package. They think higher the pay package, higher will be their monthly salary. They just divide their package by 12 and calculate the monthly cash inflow and build their castle on it. These castles prove to be sand castles as they just melt away on the day they receive their first salary.

Mohan was very happy to get an annual package of Rs 10,00,000 and was expecting a monthly intake of Rs 83,000 or so. His castle blew away when he saw that his monthly salary was only Rs 42,000, half of his expectations. Let us examine how his expectations were shattered.

What is CTC?
It is the abbreviation for cost to company. There are several hidden costs added to CTC, which inflate the salary package when initially offered, and then the employee crashes down when he gets his first salary slip. This may appear to be a short-sighted exercise by the employer, but they still get away with it.

Let us first take a look at what the hidden costs of CTC are, and then how the employers get away with it, and why employees reconcile to it.

Hidden cost No. 1: Adding the employer’s contribution in Employee’s Provident Fund
While provident fund is deducted from the salary of an employee every month, employers are also required to contribute a similar amount. This amount of the employer’s contribution is added to the CTC, and the employee is not going to get the money at the end of the month.

Hidden cost No. 2: Including the one-time joining bonus in CTC
To lure qualified and experienced employees, employers offer one-time joining bonus with a rider that if the employee leaves the job before a predetermined period he or she will have to return this amount. Adding this amount inflates the CTC.

Hidden cost No. 3: Including gratuity, insurance premium, food coupons and transport facilities in CTC
Almost all companies offer the above facilities as part of the job. However, they also add the cost of these facilities as part of the CTC and thereby inflate it to make it more competitive in the job market. These facilities, too, do not convert themselves into cash inflow and therefore go on to reduce the monthly intake.

Hidden cost No. 4: Adding a notional variable component in CTC
Dividing the salary package into fixed and variable components is very common. The trick is to make the variable component – which depends on performance rating – larger. Very few lucky employees get the best performance rating and, therefore, the full variable component. The others have to satisfy themselves with much less variable component by getting even less than the promised annual CTC.

Hidden cost No. 5: Putting stock options in CTC
Offering stock options is another enticement to get qualified and experienced employees. The stock option also comes with preconditions that they cannot be sold before a fixed period. The employee is stuck with those options and there is no cash inflow at the end of the month.

A first-time employee will be fooled by the above hidden costs. So always remember that your CTC is not your take-home pay.

Story first published on NDTV: September 13, 2013 15:50 IST

Questioning the Interviewer…

If hiring trends over the last, few years are analyzed, a rather appeasing fact surfaces—recruiters are more relaxed in their approach at the time of screening individuals.

One of the most common practices emerging as a result of this pattern is recruiters encouraging the interviewee to question back. In a way, this is also a way of judging the degree of confidence and level of preparedness an applicant possesses. The manner in which the applicant can question or counter-question the recruiter reflects his overall confidence levels and the ability to handle oneself in unexpected situations. Strangely, most applicants never seem to be prepared for this part of interview, believing that making initial impressions and talking about their professional skills is all that matters. However, they should realize that there is no dearth of applicants with similar-looking profiles. Thus, seemingly unimportant aspects like questioning the recruiter shouldn’t be ignored. Here are a few questions that you can ask the recruiting team/human resources, if given the chance, at your next interview:

Question: Are there learning or training programs endorsed by the organization?

Why? This question works in your favor, presenting you as someone keen to improve further, someone willing to learn and not hesitant to be associated in the long term—something that could make your profile click ‘stable’ in the HR’s mind. You can even ask about conferences, seminars or interaction programs involving the upper crest of the management hierarchy being hosted. This kind of inquisitiveness presents you as an individual unhindered about interacting with the bosses and someone who can associate with the job in a broader perspective, outside the realm of salary and financial incentives.

Question: What kind of challenges can I expect for the profile I have applied for?

Why? This question presents a fraction of a doubt—it might present you as someone already hesitant about the advertised role but if asked correctly and with a look that conveys genuine interest and sincerity, it works rather well. This query underlines your curiosity and an attempt to ensure that you are the appropriate fit and are not intimidated by challenges.

Question: What kind of employee reward programs can I expect?

Why? This questions points to the fact that you are a performer, someone who will most probably try to compete with the best, someone ready to stretch himself and challenge the best—basically, it highlights you as a hungry performer.

Question: What kind of growth target has the organization set for itself?

Why? It shows that you are more concerned besides your personal role and can think for the larger picture, i.e. not your boss, team members or subordinates, but the ORGANIZATION.

Question: How do you measure success?

Why? This is one question that is applicable across all recruiting professionals. This query emphasizes your concern about the manner in which your efforts will be recognized or in what manner does the organization perceive its growth or performance of its employee. Such a question presents a certain degree of professional maturity.

Question: What is the biggest challenge your organization faces today? How well does it measure up to its immediate competitors?

Why? This question underlines your penchant for being associated with a brand with certain traits. It also highlights that you can think beyond your immediate benefit even at the time of being interviewed—presenting you as a smart, aware and composed individual. If you can name some competitors too, it makes an even better impression, underlining that you have not been short on reading about the organization.

What does CTC (Cost to Company) salary figure means in India ?

Salaries in India are quoted in terms of CTC or cost to company. CTC is nothing but the cost that the company incurs to employ you and keep you employed. It includes your pay and anything else that the company may incur to keep you in employment. It’s important because a lot of components of your CTC may not translate into actual take-home cash every month.

As a broad thumb rule, what you get in hand will be 70% of your CTC. So if your annual CTC is Rs 5 lakh, you can expect to get an annual take home of 3.5 lakh or Rs 29000 per month.

So what happens to the difference? There are many components that are offered in addition to the CTC, ESOPs being a good case in point. So what are the things you need to look at there?

1. Certain components of CTC may not be cash components

A company may beef-up your CTC with components that don’t really translate into month-end cash or that may have just a notional components. Some examples include:

-Value of perquisites is included in CTC. So if you are provided with a company accommodation, car, driver, child education expenses and so on, the value of these get included in the CTC.

-Banks may include interest subsidies in CTC. That is, if you are a bank employee, you are entitled to a discounted rate on loans. The difference between the market rate and the discounted rate maybe considered part of your CTC. Even corporate give out loans and advances at subsidized interest rates and the subsidy would be added to the CTC.

-Companies may include the cost of group medical or life insurance. Some companies may add food subsidies, that is, you may be getting a subsidy on your lunch in the office canteen. If you carry your lunch from home, you may not actually benefit from this component. Similarly, if the company provides transport, there maybe transport costs or subsidies.

-Companies include gratuity in the CTC. Gratuity is a sort of bonus that is paid out when you resign or retire from your company. The catch: You are entitled to gratuity only after completing 5 years in the company.

-Employer’s contribution to your provident fund is included in CTC. This amount is deposited by the employer in your provident fund and so this does not form part of your take-home. You will get this amount only at the time you resign or retire.

2. Deductions further reduce monthly take home

Even after you have arrived at the cash value of your take home, there are certain deductions made from it. Tax is one such deduction. It is nothing but the taxes withheld from your income by the company. It is the equivalent of ‘withholding tax’ that several countries have. How much tax is deducted depends on the various components of your salary.

In addition to income tax deduction, you will find a professional tax deduction being made every month.

A lot of companies may allow you to choose the components in your salary. For instance, they may allocate a certain amount as a ‘flexi pay’ component. Within this amount, you maybe able to choose components such as HRA, medical reimbursement, etc depending on what maybe most tax efficient for you. If you are in a higher income bracket, it would be wise to consult a professional to help you optimize your salary to make it tax effective.

The other deduction is your contribution to provident fund. This amount is deducted from your monthly salary and deposited in the provident fund. This is your contribution and comes out of your monthly salary, thus reducing your take-home. Again, a lot of companies make this deduction optional. However, making provident fund contributions maybe a wise saving tool. Currently company provident funds earn tax free returns of 8.5% per annum. Over a long period of time, that would build up to a decent corpus.

3. Annualised and variable components

There are certain components that are paid out to you annually or subject to your performance; these do not become part of your monthly take home. Examples include leave travel allowance, annual bonus etc.

Variable salaries can range between 15-50%. For programmers the variable pay would be around 15% of the CTC while for marketing professionals it could go up to 50%. Before the 2008 crisis, most companies paid out the variable components in full, but that has changed now. There are various factors that come into play while arriving at the variable pay outs. The company’s performance as well as your individual performance would both matter.

4. Understand what your ESOP

Employee Stock Option Plans or ESOPs are given out over and above the CTC. The company gives employees an option to purchase stocks at a certain future date at a discounted price. As the value of the company scrip increases, the employee stands to earn capital gains. “When a company offers ESOPs, the CTC part of the compensation maybe a little lower.

While ESOPs might seem attractive when the company HR presents the numbers to you, it is important to look into the fine print. There are a number of issues here. Firstly, people do not realize that there is a certain vesting period for ESOPs. That is, you will be eligible to exercise the ESOP only after working in the company for a certain period, say 2 years or so. The second issue is the strike price. This is the price at which the ESOP is granted. If the market price at the time of exercising the ESOP is lower than the strike price, there is really no gain. And that has happened many times in the past.

So is there room for negotiation? There is always a 10% room for negotiation in any component of your salary. So you might ask the employer to reduce the variable component by 10% or the value of ESOPs by 10% and increase the cash component by 10%.

Arpit Srivastava

25 interludes of life

25 interludes of life

1. Don’t go for looks, it can deceive; Don’t go for wealth even that fades away. Go for someone who makes you smile Because only a smile makes a dark day seem bright.

2. There are moments in life when you really miss someone so much that you want to pick them from your dreams and hug them for real!

3. Dream what you want to dream; Go where you want to go; Be what you want to be; because you have only one life and one chance to do all the things you want in life.

4. May you have enough happiness to make you sweet, enough trials to make you strong, enough sorrow to keep you human, enough hope to make you happy, and enough money to buy gifts!!

5. When one door of happiness closes, another opens but often we look so long at the closed door that we don’t see the one which has been opened for us.

6. The best kind of friend is the one you could sit with on a porch swing, never saying a word, and then walk away feeling like that was the best conversation you’ve ever had.

7. It’s true that we don’t know what we’ve got until we lose it,but it’s also true that we don’t know what we’ve been missing until it arrives.

8. Always put yourself in another’s shoes. If you feel that those hurt you, it probably hurts that person, too.

9. A careless word may kindle strife; A cruel word may wreck a life;

10. A timely word may level stress; A loving word may heal and bless. Which word did you use today?

11. The beginning of love is to let those we love be perfectly themselves, and not twist them with our own image – otherwise, we love only the reflection of ourselves we find in them.

12. The happiest of people don’t necessarily have the best of everything; they just make the most of everything that comes their way.

13. Maybe God wants us to meet a few wrong people before meeting the right one so that when we finally do meet the right person, we should know how to be grateful for that gift.

14. It takes a minute to have a crush on someone, an hour to like someone and a day to love someone-but it takes a lifetime to understand someone.

15. Happiness lies for those who cry, those who hurt, those who have searched and those who have tried. For only they can appreciate the importance of people who have touched their lives.

16. Love is when you take away the feeling, the passion, the romance and you find out you still care for that person.

17. A sad thing about life is that sometimes you meet someone who means a lot to you only to find out in the end that it was never bound to be and you just have to let go.

18. Love starts with a smile, develops with a kiss and ends with a tear.

19. Love comes to those who still hope even though they’ve been disappointed; to those who still believe even though they’ve been betrayed; need to love those who will love even though they’ve been hurt before.

20. It hurts to love someone and not be loved in return, but what is the most painful is to love someone and never finding the courage to let the person know how you feel.

21. The brightest future will always be based on a forgotten past, you can’t go on well in life until you let go of your past failures and heartaches.

22. Never say good-bye when you still want to try never give up when you still feel you can take it-never say you don’t love that person anymore when you can’t let go.

23. Giving someone all your love is never an assurance that they’ll love you back! Don’t expect love in return, just wait for it to grow in their hearts; but if it doesn’t, be content that it grew in yours.

24. There are things you love to hear but you would never hear it from the person whom you would like to hear it from, but don’t be deaf to hear from the person who says it with his heart.

25. When you were born, you were crying and everyone around you was smiling-live your life so that when you die, you’re smiling and everyone around you is crying.

Words of wisdom

In the last couple of days I shopped voraciously and still there is bit of more to come. Apart from all the preparations for my next destination, I have come across a few words of wisdom which I would like to carry with me and therefore quoting it on the blog.

It was the final day at BHU and we invited all the teachers for a small get together. One of the teachers Dr. Suman Mohan who never taught us, but was a esteemed faculty member of the department, also addressed the function. Her statement,

“Friends school ke yaad rehte hain aur teachers college/university ke”

really drew my attention because I immediately related the statement with my friends around. Of-course she was right I hardly have that close friends at BHU as compared to the ones from school.

Someone (I exactly don’t remember who) also told me about three points to note in order to scale new heights :

1) Dedication 2) Determination 3) Patience