Thursday, October 15, 2009

Income through Consulting at IIM-A

Kumar Anand of ET shines the spotlight on the income earned by the faculty at the IIMs (and specifically, IIM-A) through management consulting:

IIM-A has a 90-strong faculty, of which 70% actively participate in activities that fetch them an average Rs 20 lakh annually (net consultation income plus net salary). The amount for many active faculty goes up to Rs 30-35 lakh depending on the number of consulting projects and in-house training programmes undertaken.

The institute earned about Rs 20.60 crore as consulting income in 2008-09, with the percentage growth over the last three years being about 16% per year, institute officials said. [...]

The institutes allow the faculty to take up advisory services for the industry as per their expertise in the field to help them gain insight into the functioning of the company and also generate revenue for the institute. As per provisions made by the institute, a faculty can do a maximum 53 days of consulting, charging Rs 1 lakh for a day’s consulting. On an average, a faculty member contributes 20-25 days in a year to consulting, which fetch him Rs 16 lakh after sharing the 45% of his revenue with the institute. At a few other Indian B-Schools, the faculty-institute ratio is 70:30.

I recall reading somewhere that IIM-A allows the faculty members to claim all the consulting fees up to the first Rs. 600,000, and starts taking a share -- is it as high as 45 percent? I don't know -- only on the revenue exceeding Rs. 600,000.

* * *

There's this bit at the end about faculty salaries in some private B-schools:

... The IIM salaries are taken as a benchmark by top B-Schools like Symbiosis, Pune and IMT, Ghaziabad while fixing their own pay structure.

“We pay our faculty members a little above the UGC pay structure, but we also encourage our faculty members to involve themselves with MDPs, consulting and other activities to earn extra money,’’ said Nirma Institute of Management director C Gopalkrishnan.

It's interesting that private institutions -- some of the more wholesome ones -- use the government salaries as their benchmark, even though they have absolute freedom to pay their faculty whatever they want / whatever the market would bear.

Could this assertion from an IIM-A faculty member be true?


  1. Anonymous said...

    It would be nice to know the comparable numbers for IISc faculty. Supposedly, engineering faculty (CS/ECE) can make good money from consulting, although they still probably make a lot less than what they would have, if they stayed on in the industry.

    Any numbers? Is 20 lakhs per annum too far fetched? Even for IISc faculty in ECE/CS in the heart of India's silicon valley?

  2. Anonymous said...

    Talking of salaries in private institutions, even in engineering most pay only government scales or thereabouts. Amongst management schools ISB pays handsomely.

  3. Anonymous said...

    A very happy Diwali to everyone!