Posted by 15 years back, when I became a CS engineer, many Indian & MNC IT companies were offering freshers a package of INR 3 LPA. One of them (HCL) increased it now to INR 4.2 LPA, and for others, it still ranges between INR 3.2 LPA to INR 4.5 LPA. A 40% increase for fresher salary in 15 years.
Again, I am not saying it is right or wrong. Entrepreneurs like myself and CEOs of big businesses know that it may not be prudent to scale salaries at entry-level as a lot of investment goes into making them industry-ready. Hence, bigger increments happen after some experience.
However, as a student, what is the Return on investment (ROI) on your investment is the right question. And where do you settle at a minimum? Let us dive into that maths.
- Average Fee of an Engineering College per Year – INR 2.5 Lakh
- Fee for complete B.Tech program (4 Years) – INR 10 Lakhs
- Assuming you take an education loan of INR 10 Lakhs for 20 years
- The monthly EMI will be INR 10,000
- Your rental expense, if you are shifting your base, will be INR 8k
- Your meals & food will be INR 4k to 5k
- Your local travel to office maybe INR 3,000
- And Your other miscellaneous maybe INR 5,000
- Overall, your monthly expense at the start of your career will be around INR 30,000
Hence, a minimum take-home salary should be around INR 3.6 LPA.
Including PF and other aspects of the so-called CTC, your package can be INR 4 LPA.
So now it all makes sense why companies are increasing their fresher salaries to this amount or near about.
However, the real question is – What are your basic needs as a fresher to sustain yourself and gain deeper knowledge? vs. Just going after money and not choosing the right company for its culture, training, and working environment?
I do not doubt that money matters -100%.
Choose money if all the other parameters like culture, training programs, deeper knowledge gaining opportunities, people, etc., are similar in companies that are ready to take you.