Even in the time of crisis, staff spend by refineries, aluminium and construction companies showed a significant increase during 2008-09.

According to a FE study staff spend of 1,379 companies? with sales above Rs 1 crore?more than 80% of the companies have shown increase in their staff costs in 2008-09, as compared to the same period in the previous year.

The aggregate staff cost of the companies has increased during the period and the rate of increase was marginally higher as compared to that of their total sales and lower than the total expenditure. The total staff cost of these companies grew by 21.3% during 2008-09, over the previous year in the same period, as against 20.4% and 24.1 % increase in aggregate sales and total expenditure respectively.

This has resulted in an increase in the share of staff costs in total sales and a decline in the share of staff costs in total expenditures.

The share of staff cost in total sales has increased from 5.94% in 2007-08 to 5.98% in 2008-09. And the share of staff cost in total expenditure decreased from 6.90% to 6.74% during the same period.

The total sales of the companies taken together increased from Rs 18.49 lakh crore in 2007-08 to Rs 22.27 lakh crore in 2008-09, total expenditure of the sample companies also increased from Rs 15.93 lakh crore to Rs 19.77 lakh crore and staff costs from Rs 1.10 lakh crore to Rs 1.33 lakh crore. So, the staff cost to total expenditure ratio decreased during 2008-09 from the level of 2007-08.

But the overall picture does conceal a lot of variations. Top 5 companies according to staff cost during 2008-09 are Infosys Techno, Wipro, SAIL, TCS and Indian Oil.

Of the 1379 companies in this study, 681 did better with a decline in staff cost to total expenditure ratio, while 698 experienced a rise in the period under consideration.

Many of them, particularly those in labour intensive IT, tea, telecommunications showed a high staff cost to total expenditure ratio in both the time period. For example, Infosys Techno spent Rs 75 on staff for every Rs 100 spent during 2008-09.

Companies, which have reduced their staff cost share in total expenditure significantly during 2008-09 from the level of 2007-08, were Patni Computer, Engineers India , Facor Alloys and Nestle India.

On the other hand, companies, which saw a sharp

increase in their ratio from 2007-08 to 2008-09, were National Aluminium, Tata Coffee and CMC.

In the industry-wise analysis, the ratio of staff cost to total expenditure for 33 industries was studied.

A significant decline was noticed in the case of diversified, engineering , fertilisers, food processing, Telecommunications and tyres.

A reverse trend is seen in aluminium & products, automobiles & ancillaries, cigarettes , electronics, hotels, refineries, solvent extractions and sugar. Significant increase in staff cost during 2008-09 was observed in the case of solvent extractions, refineries, aluminium & products and construction.