Bangalore: In terms employee compensation, the manufacturing sector is fast catching up with IT sector. However, currently, average salary received by an IT employee is almost double that received by an employee in a manufacturing firm. Firms engaged in manufacturing and related areas witnessed 27 percent jump in their per employee cost during FY08 as against just 4-5 percent increase for IT and banking firms, says an ETIG analysis of public listed firms with respect to staff cost per employee.
However, if manufacturing sector recorded the maximum jump in per employee cost, it does not necessarily mean all employees have got such significant pay hikes. This is because salary increments are not uniform. At an aggregate level, per employee cost for firms in the sample rose by 15.8 percent. This corresponds well to the independent salary surveys which showed average increment at around 16 percent for India making it the country with the highest average salary hike internationally last year, reports Indiatimes.
However, if manufacturing sector recorded the maximum jump in per employee cost, it does not necessarily mean all employees have got such significant pay hikes. This is because salary increments are not uniform. At an aggregate level, per employee cost for firms in the sample rose by 15.8 percent. This corresponds well to the independent salary surveys which showed average increment at around 16 percent for India making it the country with the highest average salary hike internationally last year, reports Indiatimes.
The analysis covered 540 listed firms for whom data on employees is available. While the sample is small in numbers, it represents firms which together account for almost half of corporate India's revenues and hence can be taken as an indicator of overall trend. Compensation to employee includes, apart from salaries, PF, gratuity, expenses on staff welfare, training, ESOPs and so on. The analysis excludes expenditure on VRS, arrears for previous years and director's remuneration.
Firms which saw more than 50 percent jump in per employee cost last year include names like SAIL, NMDC, NIIT Tech, DLF, India Cements, Hotel Leela Venture, Bayer Cropscience, Clariant, Tata Tea, India Glycol, GE Shipping, Mahindra Forgings, Power Finance, IFCI and IDFC among others. The prominent firms (with workforce of more than 5,000), where per employee compensation came down last year include HCL Tech, HDFC Bank, Tata Communications, Tata Coffee, MindTree, Oracle Financial, Century Textile, GTL, Shriram Transport Finance besides a host of PSU banks.
The average per employee cost for IT sector stood at Rs 8.08 lakh as against Rs 4.88 lakh for the aggregate sample. The average stood at Rs 4.41 lakh for manufacturing and related areas which was higher than that for the banks (Rs 4 lakh) and much ahead of other services (Rs 3.39 lakh). However the two top sectors in growth of per employee costs was manufacturing and related areas besides other services both recording double-digit growth. On an absolute basis, ONGC had the maximum compensation per employee at Rs 18.3 lakh. Satyam followed at number two with a big gap at Rs 11.1 lakh and Infosys at Rs 10.7 lakh. While IT sector saw total employee cost rise by as much as 28 percent, most of it has been absorbed by the significant increase in total workforce.
siliconindia news bureau
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