The Hindu Business Line : IT firms earning less revenue per employee

The revenue per employee (RPE) ratio for companies such as Infosys Technologies Ltd and Satyam Computer Services Ltd has mostly been on the decline since 2002.

Both revenues and number of employees for Infosys have increased five-old — revenues from about Rs 1,901 crore in 2000-01 to about Rs 9,521 crore in 2005-06 and the number of employees from about 9,800 to about 52,700.

Does this mean that scaling up of business is not reflected in the revenue generated per employee? Companies declined to comment on this, but said the RPE was not a preferred metric for measuring productivity.

Mr V. Balakrishnan, Chief Financial Officer, Infosys Technologies, says RPE analysis is inadequate as revenues are affected by factors such as exchange rates (rupee-dollar) and revenues from non-IT services such as business process management. When asked how Infosys measures productivity, he said, "Through in-house methods. Productivity is reflected in the differential pay scales of our employees," he says.

But Satyam Computer Services seems to be following the RPE method besides others to measure productivity. "We use stand-alone revenues to measure RPE and this ratio has remained the same for the last two years — at Rs 19 lakh per employee," says Mr T. Hari, Senior Vice-President, Global Human Resources, Satyam Computer Services.

The company has anticipated the effect of this year's planned intake of 10,000-12,000 people on the RPE. "We are confident of retaining RPE at the present level," says Mr Hari.

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