As a subject, it is taboo for almost anyone involved in the process. No one, not the schools themselves, not the recruiters, and definitely not the students-one of them went underground after the initial rash of publicity surrounding his feat of landing a salary of $193,000 a year-want to speak about placements. The schools themselves, caught between the desire to upstage their peers and rivals (especially strong among the IIMs) and the mature, it's-business-as-usual approach end up doing more harm than good with releases that set off a media frenzy. Not surprisingly, a system that is supposed to produce transparent free-marketers (every CEO should be that) is notoriously opaque, despite the surfeit of details. Some schools refuse to divulge recruiter-specific salaries; others confine themselves to function-specific details (X offers were received from marketing companies and the like).

The recruiters themselves do not like the subject any more than the schools. The main reason for that is inflation. Average domestic salaries at Indian Institute of Management, Ahmedabad, for instance, increased 23 per cent, from Rs 7.9 lakh a year in 2005 to Rs 9.7 lakh. All other things remaining equal (or ceterus paribus, as economists would put it), a company that paid Rs 7.9 lakh for an IIM-A grad of a certain profile would now have to pay Rs 9.7 lakh for a grad of a similar profile. Even were a company to do that, it would end up in a situation where it has to raise the salary of the individual it hired last year by around 45 per cent to keep a 20 per cent differential between him and this year's hire. Only, if it does so, it would end up having to restructure salaries across the board to ensure internal parity.

One way companies get around this is by offering, say, 10 per cent more on campuses this year than they did last year. That may mean ending up with hires who are qualitatively inferior to the previous years'; still, inferior isn't a politically correct word to use in any organisational context, which is why companies end up either speaking about how their recruitment process isn't based on academic merit alone or how their training process can turn tin, er, sorry, gold, into even better gold, or prefer not to say anything on the subject at all. "We make sure our current employees' salaries are in line with their expectations and that their bonuses are handsome," explains the head of human resources of a large financial services multinational. N. Ramkumar, General Manager (HR), ICICI Bank, doubts the picture is as rosy, but points out that even if the previous year's hires are unhappy, there is little available to them by way of an exit option. "These people are paid so much over the market rate, year after year," he says. "So, where do they go?".

Another way companies handle this is by down-trading from the IIMs to a few Tier II B-schools. Few foreign recruiters visit these campuses, the salaries are still rational, and the students themselves almost as good (the key word is almost) as those at the IIMs. This year, for instance, salaries offered at these schools rose by around 10 per cent.

"Too many people want too little talent and obviously, something had to give," says a professor at one of the IIMs. Salaries are what seem to have given, with the difference between the average domestic salaries of the Class of 2006 and that of 2003 at IIM-A being an impressive 50 per cent. "No wonder, some of the older guys from the IIMs wish they were here today," laughs the India hr head of a multinational financial services firm.

While multinational consulting firms can live with the inflation on campuses-they hire few people and their overall workforce is small too-large marketing or financial services companies cannot. "What sort of competitive organisation are you if you cannot handle input costs?" asks Ramkumar (ICICI picked up 40 grads from top B-schools this year for Rs 7.2 lakh a year). "Either you are admitting that you operate on very fat margins or that you are going to increase the costs to your customers significantly," he adds.

-Kushan Mitra

INSTAN TIP
The fortnight's burning question.

Q. Are IIM grads worth domestic salaries of Rs 25 lakh-plus and foreign ones of Rs 50 lakh-plus?

Yes but... D. Harish, Vice President (HR), HLL

It is not surprising that organisations are willing to pay high salaries. However, students with experience tend to get placed at higher levels and their salaries are commensurate with that. One must not draw wrong conclusions on that basis.

Yes. Manisha Girotra, Managing Director and Chairperson (India), UBS Securities

The money is justified considering the calibre of the students; you can't take that away. I think the IIMs have played the game well. Today, there is limited availability of talent and it is a competitive world.

No comment. Prakash Apte, Director, IIM, Bangalore

Leave it to the buyer to decide. After all, he knows what the product is worth. We have seen this kind of money for about two years now. It comes down to how the economy is doing and salaries will continue to rise.

--Compiled by Krishna Gopalan

Q&A
Jen-Hsun Huang: He's Game

Jen-Hsun Huang is a hero to millions of gamers across the world. In fact, without his company, the $30-billion (Rs 1,35,000-crore) gaming industry would be shorn of a lot of its 'realism', because his $3-billion (Rs 13,500-crore) Vidia makes some of the best graphics processors in the world.

Why do you think video games have become so popular across the world?

You can tell wonderful stories using video games. Unlike any other forms of entertainment, these are interactive stories. That is the ultimate power of the video game.

Computer penetration is still miniscule in India, how will a company like yours tackle that problem of hardware?

Look at mobile phones (picks up the next-generation Motorola RAZR); this phone has a graphics processing unit (GPU) made by us; the fidelity of this phone is amazing. This is why we are buying a company called Pace in Pune, which has achieved a level of expertise in producing phone-based graphics applications.

With main processors becoming more and more powerful and increasingly acquiring multiple cores, is the graphics processor doomed?

No, because they do completely different tasks. In fact, multiple cores would create even more demand for GPUs from companies like ours.

-Kushan Mitra