The aggregate staff cost of these companies rose faster than their sales and expenditure. The total staff cost increased 22.3% against 14.5% and 13.7% rise, respectively, in aggregate sales and total expenditure. This, in turn, pushed up the share of staff costs in total sales and total expenditures.
The share of staff cost in total sales climbed from 5.48% to 5.85% and total expenditure from 6.48% to 6.96%.
The total sales of 712 companies rose from Rs 12,69,416 crore in April-December 2006 to Rs 14,53,533 crore in April-December 2007, and the total expenditure from Rs 10,73,957 crore to Rs 12,21,604 crore, while the staff costs increased from Rs 69,556 crore to Rs 85,047 crore.
But the overall picture does conceal wider variations. Of the 712 companies, 251 did better with a decline in staff cost to total expenditure ratio, while 461 saw a rise during the nine months.
Many of them, particularly those in the labour-intensive IT, tea, and telecommunications, showed a high staff cost to total expenditure ratio. For example, at Infosys, of every Rs 100 spent, Rs 72 went on the staff.The top 10 companies, according to staff cost, were Infosys, Wipro, SAIL, TCS, Satyam Computer, Indian Oil, Bhel, NTPC, Reliance Industries and Tata Steel. A significant increase in staff cost was observed in construction (66.8%), electricity (57.3 %) and retailing (39.6%) sectors.
The companies that saw a sharp increase in their staff cost to expenditure ratio from April-December 2006 to April-December 2007 were MphasiS (from 19.32% to 29.39%), Bharat Electron (19.87 to 28.85) and Neyveli Lignite (38.28 to 45.20).
The companies that cut their staff cost share in total expenditure significantly were TCS (from 60.31% to 45.66%), Colgate Palmolive (17.02 to 9.68), VST Inds (23.59 to 17.63) and Century Textiles (16.96 to 11.14). Industry-wise, of 33 industries studied, a significant decline in staff cost was noticed in IT (49.1 to 41.42), engineering (10.14 to 9.55), retailing (7.21 to 6.45), tea (38.06 to 34.95) and telecommunications (14.81 to 13.09).
A reverse trend is seen in cement (6.52% to 7.04%), construction (8.64 to 9.65), electricity (7.60 to 10.48), entertainment (14.09 to 16.59), paper (10.98 to 11.56), shipping (12.84 to 14.22), steel (8.36 to 9.25), sugar (5.29 to 6.57) and petrochemicals (3.65 to 4.28).