Corporate India is investing more on its employees. According to an FE study, India Inc’s staff spend has increased steadily during July-September 2010. A sample of 1,139 corporates (excluding banks and NBFCs) reveals staff spend increased to 21.5% in July-September 2010 from 0.04% in same period last year. The staff cost of these companies has increased steadily from Rs 32,662 crore during July-September 2008 to Rs 32,673 crore during July-September 2009 to Rs 39,685 crore in July-September 2010. The total expenditure of these companies decreased from Rs 4.15 lakh crore in July-September 2008 to Rs 3.81 lakh crore during July-September 2009 but increased to Rs 4.62 lakh crore during July-September 2010.
The share of staff cost in total expenditure has increased from 7.87% in July-September 2008 to 8.58% in July-September 2010 after reaching 8.57% in July-September 2009.The staff cost to sales ratio also followed the same trend. The study also finds that 87% of the selected companies have increased their staff costs during July-September 2010, compared to the same period to the previous year.
The total staff cost of these companies grew by 21.5% during July-Sept.?10, over the previous year in the same period, against 19.7% increase in aggregate sales and 21.2% increase in total expenditure. This has resulted in an increase in the share of staff costs in total expenditure and sales. The top five companies in terms of manpower cost during the period under review are Infosys Technology, Wipro, TCS, SAIL and Bhel. Among these highest increase in manpower cost registered in the case of SAIL. The company saw employee costs rise by 50.8% during second quarter to Rs 1,700 crore from Rs 1,127 crore during the same period last year.
Of the 1,139 companies in this study, 591 did better with a decline in staff cost to total expenditure ratio, while 544 experienced a rise in the period under consideration. The remaining four companies showed equal ratio during both the period.
Many of them, particularly those in labour intensive like hotels, IT, tea, telecommunications, entertainment and construction, showed a high staff cost to total expenditure ratio in all the three month period, meaning, they spent more on staff per unit of total expenditure.
