MT@work: At consumer electronics major LG, it's possible for an MT to make as much as a junior manager

A management trainee is a management trainee is a management trainee, right? Well, not quite. No doubt the management trainee (MT) comes at the very bottom of the corporate food chain, but apparently there's an intelligent ecology that governs this microcosm. Which means one MT-just like any senior hire-is not the same as another, and that skills and the demand-and-supply equation matter a lot. Want proof? Take a look at the BT-Omam Management Trainee Salary Survey 2003, which looks at compensation across 100 companies in 17 sectors. While the average annual pay works out to Rs 3.20 lakh-25 per cent less than what junior managers in these sectors make-the intra-industry average high can range widely: from Rs 5 lakh, in the case of FMCG, to a low of Rs 2.14 lakh in the hospitality industry.

Even this only partially captures the dynamics of MT compensation. To get a sense of what's really happening, one needs to look at the difference in pay of MTs and junior managers. For, this reveals two things: One, what the job market at this level is in search of and, two, how willing an employer is to fast track its white-collar trainees. Not surprisingly, sectors that are growing at a breakneck pace lead the charge. Take telecom, for instance. Here, the differential is just 9 per cent, followed by consulting (10 per cent), banking (11 per cent), and BPOs (14 per cent).

Interestingly enough, the differential in the two-wheeler industry (at 6 per cent) is the lowest, but it may not be an accurate indicator of ground-level changes. Why? Being a traditional, manufacture-intensive industry, it probably has a sizeable number of blue-collar workers who've moved up into junior management, but on lower base salaries. Says Sulajja Firodia Motwani, Joint Managing Director, Kinetic Engineering: "We have a lot of people from administration, accounts etc. in the junior management cadre. But we hire MTs from reputed B-schools who mostly end up skipping the junior level." In companies, like LG, where there is no significant difference in the skills of junior managers and MTs, salaries are determined on the basis of skills and merit.

Still, across sectors, from manufacturing to services, trainees with professional degrees are being fast tracked on to middle management-simply because they are seen as more competent in using management tools and techniques that are now part and parcel of every decision-making process. Even BILT, a paper manufacturer, places MTs directly into middle management once they have been confirmed. Says Tapan Mitra, Head of hr at BILT: "Many in our junior management are frontline supervisors, who are essentially shop floor managers. But trainees equipped with sound application skills can even skip the junior management level."

What's also reinforcing the trend is the coming of age of specialised schools such as NITIE (specialises in industrial engineering) and Anand-based IRMA, which is reputed for its rural marketing programmes. These, then, represent a ready pool of talent that recruiters can build on with relatively less effort. Essar Construction, for instance, hires most of its MTs from the National Institute of Construction Administration and Management in Delhi and Pune. The hospitality industry, however, is a stark exception. Hotels hire from specialised management institutes too, but the difference between MT and junior management pay is a staggering 147 per cent. What explains the aberration? "We have to make big investment in training at the entry level, and hence the wide gap," says Ashwin Shirali, Director (South Asia), Hyatt International.

Sectoral Choice

But if you are a second year management student, what does the BT-Omam Survey mean to you in terms of making a sectoral choice? There are two ways in which this question can be answered. One, in terms of money and, two, in terms of growth. If you are more interested in money and going through a well-oiled, time-honoured grind, you'd be better off choosing FMCG, banking, or consulting. But if you would rather speed up your learning and rise through the ranks faster, even if it means lesser pay, go for telecom, it-enabled services, or even it. Bharti Tele-Ventures, for example, puts MTs through a shorter six-to-nine-month training programmes compared to, say, HLL, where the training is for a year or more. But deciding on a job offer is rarely as simple as that. One inevitably has to consider one's own aptitude for a particular industry and within that, a specific company.

But are MT salaries going up? Absolutely, and across all the 17 sectors in this study. The highest projected increases for this year are in the high-growth industries of BPO, it, and consulting, where there's a revival of sorts happening. But expect the average hike to be between 10 and 15 per cent. Says Sudeep Srivastava, Group Head (HR), Kotak Mahindra Bank, "Despite more companies going to campuses this year, salaries won't be going up significantly, and in tier two B-schools the salaries may be static."

Part of the reason is that there's no let up in the supply of management graduates. Every year, an increasing number of them are available for recruiters to pick and choose from, and many are actualy talking of upping their intake. Bharti plans to double its B-school hire to 50 this year, Wipro has 20 to 30 per cent more entry level positions this year compared to the previous, and if its figures for the last two years are any indication, HLL may also marginally increase its intake this year.

Does the MT salary story reveal anything beyond the obvious? As a matter of fact, it does. That junior management as we know it today may soon be an extinct species.