India’s campus hiring landscape is experiencing shifts in hiring methodologies, and for the first time in five years, the 2024 projected salaries for management students (MBAs) are experiencing a drop of 5% to 10% across tiers, a new study has found.

Deloitte’s latest Campus Workforce Trends 2024 study found that MBA salary expectations are dropping, internship intake by organisations reduced by 10% on an average, and upskilling is taking centre-stage.

The following are the insights:

1. For the first time in five years, 2024 projected salaries for management students (MBAs) are experiencing a drop of 5% to 10% across tiers. Notably, the expectation of salary by campus students is also experiencing a similar decline.

2. Variable pay increased by 250 basis points over the past year, indicating a shift towards higher performance orientation by employers.

3. Internship intake by organisations reduced by 10% on an average, indicating declining uptake. Similarly, pre-placement offers (PPOs) have experienced an annual drop of 26%. Complementing it, campus hiring budgets saw a 33% drop in the past year.

4. Skills are taking centre-stage, and organisations are pivoting to specific skills/competency clusters within the educational stream while selecting their talent. For example, AI/ML in engineering, social selling in management, and computational biology in pharma are the most in-demand skill segments. Complementing this trend, expectations from campus students are pivoting to management consulting roles for MBA specialisation and data scientist for technology talent.

Neelesh Gupta, director, Deloitte India, told FE that emphasis on skill-based hiring by employers, preference for campus talent with experience, and GenAI integration in talent management are reshaping campus hiring at India Inc. Also, gender-diverse talent hiring increased during campus hiring in FY24 compared with the FY23 level.

Retention reboot

The study added that attrition remains a significant challenge, especially among MBA graduates. “Overall, 1-year and 2-year attrition rates for top-tier campuses are 21%, 26% and 28%, pan-India,” Gupta said. “These rates are slightly lower for tier-2 and tier-3 campuses at 19%, 21% and 25%, respectively. This trend underscores the need for innovative retention strategies. To combat this challenge, leading organisations are implementing flexible work arrangements, performance-based incentives, and targeted career development programmes.”

He added that there is a critical need for organisations to rethink their retention strategies, especially for MBA graduates, where attrition rates are alarmingly high. “Innovative practices are no longer optional, but essential for retaining top talent in a competitive market. Four of every five executives favour decisions on hiring, pay, promotions, etc, based on skills over job history or network, citing reduced bias and improved fairness. Thus, there is a need for educational institutions to equip students with the multifaceted skills to succeed in the digital age.”

But despite higher attrition rates, 70% of organisations are actively seeking MBA graduates, reflecting their importance in business success and a 5.2% CAGR in compensation over five years. Notably, year-on-year compensation has experienced a decline for the first time in five years across tiers of MBA talent and in the top-10 tiers for MTech and BTech. This is reflected in a 26% decline in PPOs across degrees and a 33% reduction in campus placement budgets. “This shift suggests a focus on a more thorough skills assessment and a strategic reallocation of resources for streamlined hiring practices,” Gupta added.

GenAI integration

Gupta said that GenAI is revolutionising talent management practices by transforming recruitment into a more inclusive, unbiased and skill-oriented process, while enhancing productivity and shaping the future of work. “Our study reveals that while 60% of organisations are exploring the potential of AI/GenAI, 40% have already begun using these technologies to stay ahead in the competitive landscape,” he said.

Gender hiring

There is a significant progress in workplace gender equality and diversity hiring. “Female campus hiring increased in FY24 compared with that in FY23. However, the availability of gender-diverse talent remains a challenge, especially in the engineering stream. Rise in various initiatives also supports the hiring of differently-abled individuals and those with diverse gender identities. Targets for hiring differently-abled employees increased from 5% in FY23 to 9% in FY24, while LGBTQIA+ hiring targets surged from 8% to 20%,” Gupta added.

Location preferences

Lastly, there are distinct location preferences for different disciplines. “For engineering graduates, Bangalore, Hyderabad and Chennai are top destinations, likely due to their thriving tech ecosystems, prestigious universities and robust job markets,” he said. “In contrast, for students pursuing management degrees, the top-three preferred locations are Bangalore, Delhi and Mumbai. Bangalore’s reputation as an IT and start-up hub likely makes it attractive both for management as well as engineering students.”