India Inc's staff costs grow; sharpest surge in IT, pharma

Indians may be the happiest employees according to the Edenred-Ipsos Barometer, and there’s a reason for that, at least in some sectors. In the past 10 years, the cumulative salary bill at BSE 500 companies has grown at a compounded annual growth rate of 18%, faster than the 14% that revenue and operating profit have each risen by.

Export-oriented sectors like IT and pharma have witnessed the sharpest surge in employee costs. A few sectors such as FMCG, banks and finance have, however, seen the reverse.

In the BSE 500 universe as a whole, returns per employee — operating profi t per rupee of expenditure on employees — has dropped to Rs 2.2 in FY16 from Rs 2.9 in FY07. And, while economic growth is gathering momentum, the expert view is that the trend may persist for a while.