It's employers' job market: expect variable pay cut, flat offers at IIMs

Employers gain upper hand in the job market during a slowdown. Those seeking jobs will have to settle for lower salaries while those with a job can forget about salary hikes until the situation improves.

However, salary cuts are fast becoming an unlikely scenario nowadays. This is because, with the salary structure witnessing a sea change over the last few years, there are enough options an employer can work around to decrease their outgo. One such is variable pay and another is deferred payments.

According to report in the Economic Times, FMCG companies are more likely to snip variable pays as the impact of economic uncertainty on them is more pronounced. There are only very few sectors that would not resort any such tactics. Among them are oil and gas and pharma, the report said.

More from Economy

Inflation likely to be a big focus area for budget 2024, say sources Explained: Will the Bank of Japan break tradition and raise interest rates?

[caption id=“attachment_1089359” align=“alignleft” width=“380”]  Reuters[/caption]

Several companies are definitely queuing up for advices from compensation experts to understand the impact of lesser variable pay on retention, the report said.

On the other hand, those looking to enter the corporate sector may see a dip in the number of offers being made, another report in the same newspaper said.

It notes that the number of offers per company at IIM-Indore has come down to 2.5 in 2013 from 3.5 in 2012.

The median salary at IIM-Calcutta has not increased over the past two-three years and may remain flat even this year or go up by merely 8% for the current batch.

“The average salaries may remain the same or go up by up to 8% for the current batch, officials at IIMs in Kolkata, Bangalore, Lucknow, Indore and Kozhikode said on the basis of feedback received from top recruiters across sectors,” the report said.

Moreover, the allure of B-Schools excluding the top tier is fading as the economy grows at its slowest pace in nine years.

Only 29 percent of graduates from Indian business schools - excluding those from the top 20 schools - get a job straight after completing their course, compared with 41 percent in 2008as most tier-2 B-schools manage to place only 30-40% graduates and a majority of those who do find jobs start off with a pay of only Rs 12,000-18,000 per month( Read more here) .

Finance Minister P Chidambaram and new RBI governor Raghuram Rajan may hold the view that the current gloom and doom reports on India are over done. But for the common man, gloom seems to be the reality, not a perception.