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Next time you chose a B-school impressed by its impeccable placement records, you may want to do a reality check by speaking to the alumni. For, data can often lie.
Many B-schools, including some of the top-ranked ones, have been apparently inflating their stipend and salary figures for summer and final placements. While the figures about placement and stipend are given to media by the placement cell, which is manned by students, the chairperson of the cell is a faculty member. So the top administration of B-schools is fully aware of the figures that are put out.
Students from a number of B-schools, including a few top-rung ones, told Business Standard that their placement cells, for fear of losing out in various national B-school rankings, have been fudging the salary figures.
"With the slowdown hitting the economy, salaries have dived to an extent. But given the impact it will have on our overall ratings and rankings, we decided to prop up the figures by a few percentage points. Other B-schools also do it," said a student from the placement committee of a New Delhi-based B-school, on the condition of anonymity.
However, Business Standard spoke to the administration of four B-schools, all of which denied the possibility of fudging the figures.
Placement data is the prime driver for aspiring management candidates to choose a B-school. Most rankings give due weightage to placement details in addition to other factors like faculty and student quality, residential facilities, research output and accreditations, among others.
"It was through media reports that we learned about the highest stipend figure on our campus. When we enquired from our placement cell, we learnt that the actual stipend was at least 25 per cent less than what was quoted in public," said a student from a prominent B-school in West Bengal.
Premchand Palety, director of Centre for Forecasting and Research (C-fore) in New Delhi, says placement figures quoted by over half the B-schools in India are highly exaggerated.
C-fore does annual survey of B-schools and has access to information about them through primary survey and secondary sources.
"Some B-schools quote salary figures of Rs 1 crore, which is actually a foreign placement figure and is effectively about Rs 15 lakh per annum if purchasing power parity is factored in," says Palety. He adds that some B-schools claim 100 per cent placements and even international placements, when the truth is that hardly 50 per cent are placed on-campus and that too, mostly as entry level salesmen.
Even the top B-schools in the country pad up salary figures. In many cases, when students receive multiple job offers, all the salary figures are added up to increase the average salary figures.
"Mostly students are in-charge of placements and to compete with other B-schools, they prop up salary figures," adds Palety.
Little wonder then that there are only a few takers for the Indian Placement Reporting Standards (IPRS), instituted by the Indian Institute of Management, Ahmedabad (IIM-A), in 2011 to standardise B-School placement reports.
These standards were designed to ensure that aggregate level statistics are reported while still preserving the privacy of individual-level and firm-level data. IIM-A adopted the IPRS in June 2011.
While around 24 other B-schools have joined IPRS so far, just six B-schools have uploaded their audited placement reports.
Interestingly, many IIMs have not joined the IPRS. "We do not have immediate plans of joining the IPRS. As an institute, we have decided that we do not require any external auditing as of now. We have maintained that we will do self-auditing apart from the mandatory CAG procedure," said Sankarshan Basu, chairperson-placements at IIM-Bangalore (IIM-B).
Almost eight years ago, IIM-B had decided that the institute will not disclose any remuneration or compensation figure. "We do not want students to come to IIM-B just because of high salaries," Basu added.
Krishanu Rakshit, chairperson, Career Development & Placements, IIM-Calcutta said the institute believes it would need more time to adopt IPRS in whatever format.
"While we are in favour of transparency in placement data reporting, at this point we have many more important issues to address. We follow a much more cautious and reserved approach to reporting placement-related data, which, we believe send out a balanced view to our stakeholders beyond the campuses," said Rakshit.
On its part, IIM Ahmedabad hopes to add more B-schools to its IPRS initiative. "IIM-A has had an extremely positive experience with IPRS with steady increase in recruiter participation. For the 2012-13 final placements, we have seen highest levels of participation with data points being captured for 98.9 per cent of PGP offers, 97.8 per cent of PGPX offers and 100 per cent of PGP-ABM offers. This also highlights recruiter commitment and support for accurate and transparent reporting of B-school placements. IIM-A is deeply committed to the IPRS initiative and what it stands for – accuracy, transparency and accountability. We hope more and more B-Schools will adopt IPRS, and we are dedicated to supporting them in their IPRS adoption and implementation journey," says Kirti Sharda, chairperson - placement committee at IIM-A.
