Why Do Companies Favor Graduates from Top Colleges Over Equally Talented Peers?

Hi HR's, I have one query for all the HR personnel. Kindly solve this query or case study.

Comparison of Educational Backgrounds and Career Outcomes

A person who is intelligent gets admission to a very good college and secures a placement with a package of Rs. 12,00,000 per annum. On the other hand, a person who is more intelligent than the first person but gets admission to an average college in his own home city due to location problems, health issues, or some other genuine reason.

He consistently achieves good marks in that college where placement activities are average, and he is financially weak.

In his last semester, he moves to the NCR for Java training after facing challenges. He starts searching for a job and attends interviews, ultimately securing a position. Initially, he is appointed as a trainee with a package of Rs. 5000 per month in a renowned MNC. After six months, his salary increases to Rs. 7000 per month. After completing one year, he begins his career with the same company as a permanent employee with a package of Rs. 2.15 lakh per annum. After gaining two years of experience, he transitions to another company with a package of Rs. 3.50 lakh per annum.

After two years of experience, his salary is Rs. 3.50 lakh per annum. On the other hand, the "first person" who attended a good college, and has the same level of intelligence as the second person, receives a package of Rs. 12,00,000 per annum as a fresher.

Understanding Company Preferences

Can you explain the main idea behind why companies prefer candidates from good colleges over those who showcase hard work and intelligence? Why do companies consistently offer higher packages to candidates from reputed colleges, even as freshers?

Don't you think both individuals are eligible for good packages? How can the second person access better opportunities given his hardworking, intelligent, and deserving nature?

Subject: Regarding Candidates' Employment Opportunities and Compensation

It is a well-known fact that candidates who pursue less demanded courses in reputed colleges are likely to receive very good employment offers, whereas those who opt for highly demanded courses in unpopular colleges may face challenges in securing offers. This trend is also reflected in compensation packages. Your argument may hold true, particularly when it comes to retaining candidates from unpopular colleges.

Proving one's talent and being open to job hopping are often the only viable solutions to achieve higher compensation within a shorter timeframe.

Thank you for your attention to this matter.

Best regards

Thanks for the reply, but both are with the same specialization. The thing is, a person with 2 years of experience and, on the other hand, a person with no experience get a placement of Rs. 12,00,000/-, and both are equally intelligent. Just because there is a difference in the level of institution, the other person starts his career with Rs. 5,000 per month as a trainee. He got praised for his performance by his Project Manager and became a permanent employee with a package of 2.15 Lakh. Now, after 2 years of experience, he switches to another company with a package of 3.50 Lakh only, a package commonly offered by organizations to freshers during placement sessions.

Is Experience More Considerable Than Knowledge?

Is experience much more considerable than knowledge, and if both... then...?

Biased Behavior of Organizations

Don't you think this is biased behavior of organizations?

Branding and Career Opportunities

It's called branding, my dear. Talent can only be showcased after receiving assignments, but to secure assignments, you need to establish yourself as a brand name or be associated with a brand.

I am surprised that a brand name can create a difference of 8.50 Lac, especially when there is also a difference in experience.

The Role of Branded Institutions in Career Opportunities

But sir, what will they do with a branded institution? I think, at the end of the day, it is performance that matters and takes an organization the other way. It is a demotivating factor for a person. As an HR professional, I am not in favor of this biased behavior.

Regards.

You may consider your personal opinion, but at a professional level, everyone wants to hire the cream, and they are willing to pay for it. At the end of the day, performance certainly counts, but to be evaluated, you need to enter the system for assessment. For a simple example, someone may purchase a $35k Galaxy SIII, but they will not buy a $12,000 Micromax with the same features. Therefore, it is the brand that puts you two steps ahead in the race. Some start from zero, while others start from +10.

Why Do Organizations Require Experience in Job Advertisements?

Why do some reputable organizations put job advertisements requiring relevant experience, such as 2-4 years or 4-8 years? Why don't they consider hiring freshers? What is the need for a management department when there are managers and senior managers with 5, 8, 10, or more years of experience if they are open to hiring freshers?

Remember, status is achieved through good performance and a quality workforce, not just a brand name. Samsung was not initially a strong brand when it entered the market, but after gaining experience in the mobile market, they introduced innovative ideas and surpassed Nokia by understanding customer demands. People appreciate uniqueness, and Samsung's ability to offer something different has earned them trust. On the other hand, Micromax lacks innovation, leading people to have more faith in Samsung.

However, the situation changes when another individual possesses different qualities due to their 2 years of experience. During job postings, organizations often set criteria that specify a minimum number of years of experience required. Why is this the case if they are also willing to consider freshers?

Factors Influencing Job Satisfaction

Experience gives you exposure and skills for handling complex issues. It has nothing to do with money. Let me tell you a few factors for job satisfaction which I found during my MBA winter project. These are:

• Your boss
• Your work environment
• Your colleagues
• Growth/learning
• Money

So, money is a factor, but you can't say a 12 lakh package is everything; sometimes, it's luck. It's not talent versus talent; it's talent versus attitude. A top B-school teaches you nothing superior to other schools, but they give you the right attitude. It's your attitude that makes you successful. Sachin and Kambli were equally talented, but after facing a hurdle, it was Sachin's attitude that led him. (An example from Harsha Bhogle's speech at IIT)

Please try to understand... Both Sachin and Kambli started their careers together, but here the story is different. In management, we can count attitude and all... but what about other streams? You are saying experience has nothing to do with money! Don't you think an experienced person is more beneficial to a company than a fresher?

Today, let's say I have 2 years of experience, and my company, on a campus placement tour, recruits a fresher with a very handsome salary package. Don't you consider it a matter of demotivation where, after attaining 2 years of experience, I know the company culture very well, my project details, my job, my responsibilities, and on the other hand, the fresher has to learn everything from the beginning.

Job Satisfaction and Salary Discrepancies

It's all related to job satisfaction. The reasons I've given for job satisfaction might vary from person to person. I admit it can be disheartening when a company hires a fresher at a higher salary than yours. You have to be prepared for these situations.

As you also follow the same rule in your life. For example, if you want to buy a biscuit, you order Good Day rather than Tiger. The reason behind choosing Good Day biscuit is because of strong advertising, high prices, and branding. That's why companies choose to go to better or costlier colleges rather than a low-ranked college.

I too, but as I said, everyone has their own views, although packed dahi is of good quality . Joke apart, the point will always be the same. It's only branding and the higher probability of success in their job. We can't say they are hired just because of their institute, but it's also a factor. They also face interviews. But here is a basic difference in ideology.

Let me tell you, I met two people back in 2011. Both were freshers; one was from a good institute in Delhi-NCR and the other one was from an institute of a B-grade city in UP. Now, here comes the difference. One from a small town with an unknown college was even ready to work for 5000, and one from NCR from a known college was thinking to ask 20k for the same profile. So it's the attitude, it's the difference, it's what we call a head start.

Comparison of College and Biscuit Choices

It's an average college, not a low-ranked college. Secondly, taste, which is the biggest quality of a biscuit. The taste of both biscuits is different. That's why we choose Good Day rather than Tiger. We wish to have good taste, not brand! So, organizations should choose employees with experience rather than fresher employees for the benefit of their organization.

I don't know, friends, but do you think the system is correct? I mean, is there any way for that experienced person to move ahead with a good package, or will he run like a tortoise even if he is equally hardworking and intelligent?

The Importance of College Prestige in Recruitment

It is very difficult to measure the ability, aptitude, attitude, and likelihood of success of any new recruit. However, if you recruit from a good or great college, you are assured that at least at one point in time, this individual performed much better than all others at their stage. There may be others who are intelligent, hardworking, and capable in second or third-tier colleges, but identifying them from the crowd of mediocre individuals would be a tough task. Thus, companies tend to prefer graduates from premium colleges.

Benefits of Recruiting from Premium Colleges

Premium colleges have more job opportunities and can be selective, which in turn drives up the salaries. Additionally, when you are confident that the individual you are recruiting is better than many others (with the college brand name ensuring that), you can safely assign them higher-value roles than you would risk with someone of uncertain capability. Therefore, even the job profiles offered are of higher quality at premium colleges.

Why don't we think from the college perspective as well? Why don't the colleges try calling branded companies to conduct a recruitment drive in their college? Companies usually go for top schools to recruit high-caliber students. So, I think even the college placement cell can give it a try by reaching out to tier 1 companies to conduct a recruitment drive. Branded companies often prefer branded colleges, assuming that only top-tier students are there. As you mentioned, the same caliber can be found in regular colleges as well.

Even students now have the opportunity to communicate directly with any company's HR and forward their details. Hiring freshers depends on the company's requirements. If they really need experienced people for the current project, there is no point in hiring freshers and paying a large amount. Any company hires a fresher foreseeing the potential in them and the productivity they will bring in the future.

Please let me know if you have any questions or need further clarification.

I agree with you. It is true that two people with the same skills and performance deserve similar jobs and packages. However, in reality, people receive different jobs with varying packages, some higher and others lower. It all depends on luck, and it's true that branded companies often opt for branded individuals. After all, human psychology can sometimes be wrong, crazy, and unfair.

Removing Barriers in Hiring Practices

To remove these kinds of barriers to some extent, interviews should be conducted purely on an intellectual basis. A condition should be set that candidates' college names and previously worked company names should not be revealed until the selection process is complete.

Thanks & Regards,
Srilakshmi Korukonda

Understanding Corporate Preferences for College Graduates

A very good question from your side. Your concern is not wrong from any aspect, but let me just tell you the fact about the mentality of these companies. They only look for attitude in preference to intellectual level or skills. Good institutes only change your attitudes, and even small institutes do too!

Moreover, HR from good companies prefers brands only because you better know that Allen Solly or United Colors of Benetton garments are much more expensive than any other Indian brand. This doesn't mean people don't wear Indian brands. Moreover, 30% of people are only brand conscious because of the premium factor mentality, and the other is comfort, which they get from a branded item.

Regards

I accept this. Actually, in a private organization, managers often recruit new clients based on the manpower they have from branded institutes. But how can another experienced person, who is progressing slowly like a tortoise, reach the same heights? Is there any hope for him? What is the best way to search for a job and secure a position in a branded firm?

I do not agree completely with this whole case. The college brand may help initially to get a platform, but at a later stage, your talent speaks louder than anything. There may be a request for certain adjustments to be made in terms of location, position, etc., but with a wide range of jobs available, one may switch to a deserving place of late.

Regards,
Anil Richhariya