IT firms face 73% hike in staff cost

As Indian IT and ITeS firms continue to focus on 'going global,' companies have registered a whopping 73 per cent increase in their wage cost year on year in September 2005, according to a study by industry chamber Assocham.

The study said large investments that have been earmarked for enhancing human resource had paid well during the period.

"As the Indian IT companies turn global, the demand for IT professionals has also gone up and in order to sustain their employees, the companies are offering higher salary packages to their employees," the Assocham Eco Pulse analysis said.

The increase in staff cost ranged from 18 per cent to 133 per cent, with TCS having the highest rise in wage bill at 133 per cent, it said. TCS had recorded a topline and bottomline growth of 28 and 60 per cent respectively.

Satyam computers registered a 39.24 per cent rise in staff cost, even as it clocked a net profit of 25.7 per cent.

Other companies, whose salary bill went up include Flextronics Software Ltd (28.8 per cent), Onward Technologies (25.4 per cent), FCS Software (18.4 per cent) and Geometric Software (35.41 per cent), it said.

"With the demand for quality IT professionals on the rise and their possible shortage in future, the current trend of rising staff cost in this sector is likely to continue," Assocham president Anil K Agarwal said.

On the macro front, the manpower expenses rose by 22 per cent thereby pushing the net profit of 100 corporates, up by 18 per cent across different sectors.