Tier-II engineering institutions are rapidly catching up with tier-I institutions for hiring but multinational companies still prefer premier institutes from a long-term perspective, says a report.
Zinnov, a leading globalisation and market expansion advisory firm, engineering graduates from Tier-I institutes are paid 25 to 30 per cent higher than tier II established institutes for similar job functions.
While the average total guaranteed compensation (TGC) for a graduate at a tier I institution was Rs 8.07 lakh, the average TGC for a graduate from a Tier II established institution was Rs 6.49 lakh.
The numerous reasons for the differential salaries in Tier-I as compared to other tiered institutes include: perception of performance and the types of jobs being offered.
Graduates from Tier 1 institutes are perceived to be more capable to take up important roles in the organisation and are taken in it at higher level/grade.
Close to 60 per cent of companies who visit both Tier I and Tier II institutes mentioned that students from Tier I institutes are hired at higher levels (Engineer level) whereas others are hired at associate engineer levels.
MNC R&D firms are increasingly finding quality talent in Tier II emerging and Tier III institutions at comparatively lower costs.
However, when it comes to selecting a university for research collaboration, Tier I institutions are preferred for long-term, high-budget research engagements, the report said.
"Leveraging the educational ecosystem in India is an imperative for MNCs looking to drive value and innovation out of their R&D centers in country," Zinnov CEO Pari Natarajan said.
Increasingly, the study found that companies are looking at sign on bonuses and stock options as a tool to attract talent on campus.
About 30 per cent of the surveyed companies offered a sign-on bonus in the range of Rs 50,000 to Rs 2,00,000.
The estimated value of the stocks provided as benefits ranges between Rs 1.5 lakh to 5 lakh.
Moreover, in addition to stocks, majority of companies also provide for a relocation allowance to campus hires in the range of Rs 10,000 to Rs 60,000.