The last two years or so have seen a shift in the job preferences of students graduating from India's top engineering institutions. There is now a greater awareness of information technology product companies among students and a resultant rise in the desire for joining them.

Fresh engineers passing out of technology schools across India prefer challenging assignments in the IT sector rather than high salaries. While the brand of the company holds importance, the salary takes a back seat, at third spot. 

With profit margins at IT services firms and the services businesses of IT firms under greater pressure, this translates into lower salaries than those offered by product firms during campus recruitments. IT product companies pay engineering graduates Rs 5-8 lakh a year at the entry-level, while services companies pay Rs 3-5 lakh a year.

These are some of the findings of a compensation survey-cum-student perception study conducted by Campus Connect, a division of CareerNet Consulting.

The survey was conducted in over 110 T-Schools and involved over 1,000 students and 30 IT companies. CareerNet is an integrated recruitment consulting firm that offers professional services to the technology, knowledge, BFSI and retail sectors.

At the campus level, 45 per cent of students prefer IT product companies, followed by the semi-conductor, high-end computing and VLSI segments. This is followed by the financial services companies and KPOs. IT services companies are the least preferred, being the choice of just 7.7 per cent male and 19 per cent female candidates.

A high rate of attrition in the first year too can be attributed to the kind of jobs offered. The survey found that only 17.3 per cent of fresh engineers land jobs of their liking. There is a growing trend of engineers leaving a well-known brand offering a higher salary and settling for a lower salary in a lesser known firm if the job is of the choice of the student.

Says Rishi Das, co-founder of CareerNet Consulting: "Despite their actual preferences, students go for big brand names during campus placements. Within six months, most find themselves unhappy with their assignments. Some 40 per cent leave before the end of the first year while another 20 per cent leave in the second year -- a result of a wrong choice made during the placements."

Students from Grade A colleges are able to obtain offers of their choice in the ratio of 2:1 while the ratio is 3:1 in Grade B colleges and 5:1 in Grade C colleges. This also means that engineers passing out of premier institutes like IITs or NITs are more attuned to market requirements than others.

The largest chunk of these disillusioned engineers finally heads for companies that are in IT products, semi-conductors, high-end computing or VLSI segments. Another large chunk leaves for MS courses or MBA degrees.

"Students are looking for higher-end jobs in the IT sector. They want jobs that test the full extent of their knowledge and product firms help meet their needs. That's why attrition is much higher in IT service companies," says N S Rathi, University Programme Head at Oracle. Product companies offer higher salaries, adds Rathi. IT professionals also see them as a move up the value chain.

Says a faculty member of an IIT: "The selection process of IT product firms is very elaborate and the interviews sometimes take up to six hours. The students find those jobs more challenging and exciting." He adds that even in IT services firms, those working in core areas are paid more.