Skill, labour, talent for MSMEs: Employee expenses for more than 2,000 listed companies including small and medium enterprises (SMEs) and others increased in the financial year 2021-22 in comparison to FY21 when employee expenses had declined in every other type of company barring big enterprises with turnover more than Rs 1,000 crore, according to the latest Ecowrap report from the State Bank of India’s Economic Research Department. “This turnaround indicates that companies were hiring in FY22,” the report authored by Soumya Kanti Ghosh, Group Chief Economic Adviser, SBI said.
The growth in employee expenses was highest at 22 per cent for 222 companies with a turnover between Rs 100 crore and Rs 250 crore during FY22. 670 very small companies with turnover up to Rs 50 crore and 164 other small enterprises with turnover between Rs 50 crore and Rs 100 crore had registered 2 per cent and 15 per cent growth respectively in employee expenses during FY22, the report launched on Friday showed.
In terms of large businesses, 200 companies (Rs 250 crore – Rs 500 crore turnover), 199 companies (Rs 500 crore – Rs 1,000 crore turnover), and 567 companies (above Rs 1,000 crore turnover) had recorded 19 per cent, 15 per cent, and 12 per cent growth respectively during the year vis-a-vis FY21.
The data was part of the observations from India’s payroll data for FY22 that showed the Indian labour market despite massive disruptions in FY21 and FY22 amid Covid, did not do that badly. A total of 146 lakhs payrolls including 138.2 lakhs through Employees’ Provident Fund Organisation (EPFO) and 7.8 lakhs through the National Pension Scheme (NPS) were created in comparison to 94.7 lakhs in FY21.
In terms of increment, 45 lakh payrolls were added in FY22 over FY21. There was an increase in first-time payroll by 16 lakhs, second-time payroll by 25.8 lakhs and formalization was 1.9 lakhs, according to the report. This clearly indicates that people were coming back to the labour market in the later part of FY22, as the situation had improved at that time, the report added.
The rate of formalization also increased by 1.9 lakhs, reflecting the disruptions in the MSME space were turning the corner, the report further noted. MSME sector, according to the government data, employs around 11 crore people while additional 5 crore jobs are targetted by 2025.