In line with the accelerated digital transformation that has been brought about over the past two years, corporates have been on eager lookout for new talent who can help them lead the way with fintech and risk analysis, artificial intelligence, cybersecurity, and product design and engineering.
However, the top skills at campuses only show a partial fulfilment of this demand with iOS/Android development, digital marketing and market access, material sciences/R&D, and financial risk management featuring prominently, reveals Deloitte’s Campus Workforce Trends Survey 2022.
This demand-supply mismatch is because it takes one year after the spike in demand for a certain skill to get incorporated into the curriculum. Since the demand for skills tends to taper after three years, it leads to both talent and employers always on the lookout for the right fit.
“While industry-academia partnerships keep getting stronger every year, they are not embedded at the course level (some may be, but not institutionalised yet). This translates into long campus to corporate orientation programmes (three months to over one year) – sometimes also becoming the cause for infant attrition. What is important is for academia to take initiative beyond the placement office and identify skills that are required at work and translate it into the academic curriculum. This will enable real impact and plug and play talent,” says Anubhav Gupta, Partner, Deloitte India.
The survey provides insights into preference and hiring trends at campuses along with the compensation that is being expected by students.
Compensation trends - the mismatch
The survey reveals that there is a gap between payouts expected by campuses and those delivered by corporates as for the top 10 MBA colleges, the median CTC less long-term benefits actuals were lower than expected 25,41,000 v. 27,58,000), whereas for tier 1 colleges, this was higher than expected (21,93,000 v. 21,49,000).
The differential between salaries (both, expected and paid) for each successive tier of colleges is sharpest for MBA colleges. For example, the actual payout for tier 1 colleges is 14% lower than for top 10 colleges, while the tier 2 colleges get 54% t lower payouts than tier 1 and tier 3, 29% lower than tier 2. This is even expected by campuses (22 per cent v. 51 per v. 24 per cent).
As another probable indicator of the desire for security, students across sectors prefer a high fixed pay component (slightly lower by the BBA/BMS/MBA cohort). However, indicative of the general trend amongst corporates to increasingly focus on more flexible, performance-oriented pay structures, the variable pay component delivered was comparably higher for all sectors except B.Pharm.
Commenting on the total rewards trends amongst campus hires, Gupta says there’s a very good salary growth (15%-25% depending on streams) for freshers from the pre-pandemic levels. This indicates focus by employers on the ‘build talent from within’ strategy.
“However, an increasing share of variable pay in the rewards package, as well its increasing penetration, indicates that performance orientation is becoming a priority for employers from day one. What remains to be ascertained over the next few quarters is the work from anywhere/on-site dilemma. Organisations are split in their views, and it will be interesting to witness which one prevails in the long run,” he adds.
Representing the views of over 150 organisations and 250 campuses across multiple industries and tiers, Deloitte’s second annual Campus Workforce Trends Survey 2022 provide insights into the compensation being expected by students at campuses and organisations offerings along with the preference and hiring trends.
IT/ITeS remains most preferred work sector
The pay offered across different specialisations varies as per the demand in each corporate sector.
For example, amongst MBA specialisations, the consulting/services industry offers the highest pay differential to students specialising in banking and financial services and finance, followed by marketing and business analytics.
On the other hand, students of entrepreneurship and family business get offered the lowest pay with the FMCG/FMCD industry, followed by the IT/ITeS industry.
IT/ITeS, instead, offers top payouts to the more relevant engineering stream specialisations of data science and AI, followed by computer science. The engineering specialisation also attracts high pay differentials from the consulting/services industry.
As a probable consequence, IT/ITes takes the top spot as the preferred industry amongst students.
Campus hiring strategies
While 54% companies have gone back to offline onboarding, 36% continue with virtual onboarding, and the remaining 10% currently offer a hybrid of virtual and in-person onboarding.
Stand-out corporate practices for campus hires include loan repayment options, a 15-day job rotation induction, fast track career path for new joiners, sponsoring industry-specific mandatory certifications, and a one month in a year foreign work immersion, subject to management approval.
Differential rates of attrition
Infant attrition, as well as two-year attrition, is highest amongst candidates from BBA/BMS streams (35% and 45% respectively), while one-year attrition is highest amongst candidates from BE/BTech (46%).
The higher attrition in engineering degrees as compared to last year is due to the current demand and supply situation in that sector. Unicorns and startups have been offering a larger pay variance to attract talent from this sector.
The Indian IT sector has been facing an especially high rate of attrition (between 15-25%).
As more enterprises in India and abroad recognise the need for IT modernisation, demand for skilled workers is pushing up pay and prompting Indian IT services firms to increase the cost of digital projects for their clients. Price pressure and quality gap are the major concerns for the CIOs across India.
“This pay-driven war for talent is primarily on account of the technology boom, as well as the changing preferences of young talent (flex, hybrid, on-site). One can expect this wave to last a few cycles before a reverse trend starts. While that happens, the pay budgets for fresher/young talent of organisations are expected to swell to near unsustainable levels,” says Neelesh Gupta, Director, Deloitte India.
As many as 47% of students stated salaries as the biggest motivator to choose between jobs.
Additionally, higher education and lack of job flexibility are common factors driving attrition amongst all candidates.
However, those from lower tier colleges cite lack of goal clarity as a concern, while those from premium/tier 1 colleges mention lack of growth opportunities.
Desire for security
Almost two-thirds, 67% of students prefer working with large companies (greater than 1,000 employers) and around 46% specifically with the public sector, with job security being the primary motivator.
Social media influencing is seen to be a new role developing with 26% of the students preferring it over corporate roles.
Post introduction of hybrid/work from anywhere models, this trend is witnessing a surge and is likely to be a game changer in how work happens/jobs are constructed.
The preference of students is to either go for metropolitan cities or their home location, translating into a metro dominance and recent upswing of tier-2 cities, albeit small.