Human capital is mostly ignored by accountants, believes the management of India's second-largest information technology services provider, Infosys Technologies.
Arguing that this should not be the case, the company has used the 'Lev & Schwartz' model and pegged the value of each employee at Rs 97 lakh (Rs 970,000), primarily based on the potential value of their future earnings for the company.
The IT major's total value of human resources, which includes both software professionals and support staff, is pegged at Rs 1,02,133 crore (Rs 1021.33 billion) for the financial year ended March 2009. The human resources' value of Rs 102,133 crore during the financial year 2009 was for 104,850 employees during the same period, according to the company's latest annual report.
For the financial year ended March 31, 2008, the value of human resources stood at Rs 98,821 crore (Rs 988.21 billion), while the total workforce of the company stood at 91,187.
The value of human resources, according to the annual report, is evaluated and based on the 'present value of future earnings of employees' and few other factors.
Employee compensation includes all direct and indirect benefits earned both in India and overseas and the incremental earnings based on 'group or age' are among the assumptions take into account, it added.
Incidentally, Infosys pegged its brand value (using a generic brand-earnings-multiple model) at around Rs 32,345 crore (Rs 323.45 billion) for FY09, which is a marginal increase of 1.5 per cent over its brand value of Rs 31,863 crore (Rs 318.63 billion) for FY08.
