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Influence of return on investment and labor market conditions on job seekers’ preferences of employment attributes in the Indian context

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Abstract

Previous research has treated job seekers’ preference of employment attributes as invariant across labor market conditions. In contrast, drawing on human capital theory and labor market theory, we propose that employment attributes preferred by job seekers vary as a function of expected return on investment (high versus low return on investment) and job environment (job scarcity versus abundance). Using secondary data, we classified premier Indian business schools into one of four quadrants. We then collected primary data from 1010 job seekers about their preferences to examine, heretofore, unexamined research questions. Results reveal that return on investment (ROI) influenced job seekers’ preferences of employment attributes, such as career growth, learning opportunities and job security while job environment impacted job seekers’ preference for compensation. In addition, results indicate that the effect of job environment varies according to ROI, such that the impact of job environment varied more in high versus low ROI condition. We discuss implications for theory and practice and offer suggestions for future research.

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Notes

  1. Department of School Education and Literacy is one of the two departments of Ministry of Human Resource Development (MHRD), Government of India and its mandate is to promote school education through various schemes and welfare programs.

  2. Department of Higher Education of MHRD, Government of India is responsible for the overall development of the basic infrastructure of higher education sector, both in terms of policy and planning.

  3. The National Sample Survey (NSS) is conducted on a regular basis by the National Sample Survey Organization (NSSO), the premier data collection agency of Government of India.

  4. 10 Lakh = 1 million; INR = Indian Rupees.

  5. USD 1 = INR 71.26 (as on February 5, 2020).

  6. All India Council for Technical Education is the statutory body and a national-level council for technical education under Department of Higher Education, MHRD.

  7. IIM Ahmedabad was ranked as top management institute in India in the National Institutional Ranking Framework (NIRF) of MHRD.

  8. for providing financial support to meritorious students to pursue higher education in India and abroad. The scheme provides certain concessions on educational loans including 0.5% concession in the interest rate to the girl students, rebate in income tax to the extent of interest paid on education loan, 1 percent interest concession if interest is serviced during the study period and subsequent moratorium period prior to the commencement of the repayment (India CSR Network 2019).

  9. Some popular management entrance exams in India are Common Admission Test (CAT), Xavier Aptitude Test (XAT) and Management Aptitude Test (MAT).

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Acknowledgments

We thank D. Chaitanya Sudha for her help in data collection. An earlier and abbreviated version of this manuscript was presented at International Seminar on “Employment and Employability of Higher Education Graduates” February 19–20, 2019 organized by Centre for Policy Research in Higher Education (CPRHE), NIEPA, New Delhi.

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  1. School of Management and Labour Studies, Tata Institute of Social Sciences, V. N. Purav Marg, Deonar, Mumbai, 400 088, India

    Sabit K. Sonu & Gordhan K. Saini

  2. Department of Management & Quantitative Methods, College of Business, Illinois State University, Normal, IL, 61790, USA

    I. M. Jawahar

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Appendix

Appendix

See Table 9.

Table 9 The final sample of selected institutions used in the phase I study
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Sonu, S.K., Jawahar, I.M. & Saini, G.K. Influence of return on investment and labor market conditions on job seekers’ preferences of employment attributes in the Indian context. Asian Bus Manage 21, 286–315 (2022). https://doi.org/10.1057/s41291-020-00128-w

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