Are Crore-Plus Salary Offers To Indian Graduates Really Such A Big Deal?

The buzz around the fat packages forgets that they include one-time bonuses and are meant for positions in the US, where the cost of living is much higher.

The salaries proffered during campus recruitment in some Indian institutes are increasingly sounding like Indian census figures. Crores dominate the charts. Lakhs make up the rest.

At the Indian Institutes of Technology this year, at least 40 offers of crore-plus pay packets were put on the table by the second day of campus recruitment for jobs that would take students to the US.
At the International Institute of Information Technology in Hyderabad, more than 10 students were promised, on average, a salary of Rs 1.5 crore by technology giants like Facebook and Google.

Deepali Adlakha, who studied software engineering, was among the stars at IIT-Bombay. Soon after word got around that she had been signed up by Facebook for “a one-crore remuneration”, she began receiving phone calls from parents of young undergraduates, “asking if their child will get a similar deal”.

“The Rs 1-crore placement offer is not as high or unnatural as it looks,” she said, explaining that salaries for software engineers in tech firms like Google, Microsoft and Facebook are similar across the board.

She is not off the mark. In San Francisco’s Bay Area, which is the epicentre of technological revolutions, hefty pay packets are as normal as hipster culture.

Darshan Kapashi, a Stanford University graduate working at Facebook for over a year, agreed that “all big companies pay salaries of at least $100,000”. “This is the Bay Area standard, irrespective of the university where the employees graduated from,” he said. “After taking into account the exorbitant cost of living, it comes down to an equivalent of Rs 16-Rs 18 lakh.”

That is another thing the hype around campus recruitment salaries ignore: the cost of living in the United States is much higher than in India.

This difference becomes more lucid when put through the lens of purchasing power parity, a tool used to determine the relative value of different currencies. A basic salary of $100,000 in the US, when multiplied by 0.3 (the World Bank’s PPP factor for India), gives $30,000 (or about Rs 18 lakh) in India.

It was for this difference why a student from IIT-Bombay decided to stay put in India despite offers from abroad. “Taxes and the cost of living in San Francisco are high,” he told INNLIVE.

 Then, there are other components to the fat salaries offered during campus placements that are forgotten in the noise. For instance, the one-time joining bonus, stock options (that are given over 4-5 years), and the performance bonus (which comes not every month or even every year).

“The real value lies in working for a big brand,” said Adlakha, “and not in the figures that are usually played up and mostly differ from person to person.”

So, seen in the right perspective, are the crore-plus offers from US companies such a big deal? Indian companies and others regularly give fresh graduates salaries of Rs 20-30 lakh for jobs within India.

Rahul Maganti, a final-year student at IIT-Bombay, noted that a company called World Quant offered Rs 32 lakh per annum for postings in Mumbai to three applicants during the institute’s campus recruitment.

Housing.com, a portal that has reportedly scored its fifth round of funding of over $100 million, got first day premier slots at most IITs and recruited students alongside bigwigs like Facebook.

“We offered Rs 12-20 lakh salary packages across seven-eight profiles to graduates, but students showed great interest,” said Advitiya Sharma, co-founder of Housing.com. “We have recruited over 100 students so far from the IITs. We focus on providing interesting work profiles rather than fatter pay packages.”