Scrambling for Talent in the Land of Plenty (of people)

Joining bonuses up 35% in hiring frenzy

Business school placements have thrown up many surprises this year. Not only have average salaries gone up this year, but joining bonuses - which had almost disappeared in 2009, thanks to the slowdown - are back. And in a much more robust way. These bonuses, also called confirmation, guaranteed or completion bonus, have gone up by almost 35% since last year. With a lock-in period of one to three years, these bonuses are once again being used to attract and retain people on the back of a revived economy and fierce competition for good people.

Companies such as Nomura, HSBC, Accenture, Deloitte Consulting, Parthenon Group, HUL, Reckitt Benckiser, PepsiCo, Mphasis, ICICI Bank, Amazon, Deutsche Bank, Citibank, Lenovo, Pepsi are offering joining bonuses ranging between Rs 50,000 and Rs 400,000 at the Indian Institutes of Management (IIMs), ISB, XLRI, Jamshedpur and Indian Institute of Foreign Trade, among others. This is over and above the salary offered to students.

According to officials at IIM-Kozhikode, there has been an increase in the number of companies offering joining bonuses - many of which are woven into the compensation structure -- as well as an increase in the size of the joining bonus itself. This is true across various verticals, like finance, marketing, IT and consulting.

Institutes say the frenetic hiring by companies across sectors, and competition within organisations, is driving such bonuses upwards. "In the same sector, if your competitor is offering a joining bonus, you will have to consider it too. Otherwise, in a good job market, students may not even come to you," says Prof Prashant Salwan, placements chairman at IIM Indore.