India's rising employee cost 

While the salary earners have every reason to rejoice, their employers may be feeling a trifle uncomfortable. Assocham's (Association of Chambers of Commerce of India) latest survey has found that the staff cost of India Inc is increasing at a faster rate than the growth in net profit and total income.

The information technology and the IT-enabled services sector led the pack in the Assocham survey, with a 36 per cent increase in staff costs against a bottomline growth of 29 per cent and topline rise of 30.5 per cent.

The pharma companies also followed a similar trend and despite registering a negative growth of 30 per cent, bore the brunt of additional staff cost of 13 per cent.

According to industry body Nasscom, there may not be an immediate threat as Indian outsourcing firms have incorporated elaborate plans to circumvent rising wages. Most Indian IT firms that operate globally have also begun implementing backward linkages to cheaper locations.

 

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