Campus placement month is perhaps one month when anxiety is at its peak. Although everyone proclaims that there prime criteria of selecting a job is one which provides it an opportunity to go quality work, but everyone does desire secretly to get the highest salary “package”. The dream of diving in a room full of money, just like our deary cartoon character from childhood, seems to again crop up.
However, there are just a few ‘lucky’ ones who get a placement at a very high package. The remaining average students, the majority, have to settle for lower packages. So a distinction is created then between the “extremely happy” students and the “only happy” ones. But after a year or two, they come across the truth. There is a difference between those ‘lucky’ students and the rest, but actually, the difference is just marginal. People realise that the Cost to Company (CTC) numbers had made a fool out of them!
What is CTC?
CTC or the Cost to Company is all the spending the company does on you. Right from the air conditioners you will be using at office, to your food there, everything is part of your CTC, obviously along with the take home salary. So it may sound good to say that ‘I am getting a 12 lakh package’, but in reality that is not the amount you will actually get.
It is this benchmarking of the ‘packages’ a student gets once he completes college, which has been exploited by the companies. How well someone has been placed is judged by the ‘package’ he is getting. And this is what is leading and aiding the companies to fool the students so easily.
Job seekers eventually feel cheated, exploited and dissatisfied at work. It reflects in their performance along with their mental peace. Therefore it is essential to know a few tricks that employers generally use to fool the employees. 5 of some common tricks have been discussed in the following section.
5 tricks to inflate CTC numbers and deliver an incorrect impression
These tricks show how companies are elevating the CTC numbers:
Trick1: Making CTC include the EPF share
Employers many a times trick the employees by including their share of contribution to the EPF in the CTC. This way the CTC looks really high, but actually it is making a fool of the employee. An ideal way is to reduce the CTC by some amount equal to employer’s share in EPF and pay it separately. But that way, the CTC will seem lower, and will not be able to attract employees. Even though the employee is getting the same salary, but his ‘package’ is high.
Trick 2: Including one-time bonus in CTC
One fooled employee shares his plight when he says that when he joined his company with a package highest in his college, he had in mind, converted the per annum CTC into his monthly earnings by dividing it by 12. Later he came to know that his CTC included a one-time bonus that would be paid to him in only the first year at the time of joining. This was not even a regular thing. It was only a trick to inflate the CTC numbers, thereby making him feel really exploited and cheated.
Trick 3: Including Stock Options in the CTC
Sometimes employees add the Stock Options to CTC and inflate the numbers this way. Stock Options do not give a regular return, but adding them to the CTC makes it look really high.
Trick 4: Including Insurance Facilities, Transport Facilities, Food Facilities to the CTC
Companies generally give their employees food coupons at the end of the month. They make contributions towards the employees’ medical and life insurances. These things are given as benefits, but not as cash. However, some companies add the spending on these things to your CTC, as it is a spending on you. You will much less than what the CTC numbers say.
Trick 5: Adding various variable components to CTC
This is a common trick by companies who give performance based pay. They add a large variable component to the CTC and keep the fixed amount small. CTC is declared by them keeping the average performance in mind. For instance, if they say that CTC is 12 lakhs, it may imply that some amount like 6 lakhs is fixed; the remaining is variable depending on your performance. This variable component in not in your control entirely and you may suffer later on.
Start ups usually offer low packages, but the CTC when divided by 12 will more or less give you your monthly take away salary. It is the giant MNCs who usually show exorbitantly high CTC when it is actually not so.
Thus one should pay attention to the final take home salary than just the CTC numbers. Being a little careful and aware helps!
