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The top three software companies have managed to keep their staff cost in check. This is despite a significant addition in employees during the last financial year.
On a year-on-year, the staff cost has increased significantly for Tata Consultancy Services, Infosys and Wipro. However, staff cost as a percentage of revenue for all the three has been more or less flat.
It is a healthy sign that the companies have managed to keep the staff cost flat, said Mr E. Balaji, Managing Director and CEO of Randstad India, a HR company. If the revenue growth has outpaced staff cost, the percentage of staff cost in relation to revenue is going to be flat. That's what has been witnessed with the three companies, he said.
According to Mr Siddharth A. Pai, Partner, Global Resourcing & India Operations, Information Services Group, the increase of staff costs in line with revenue is to be expected in ‘plain vanilla service' business. Since revenues are a linear function of headcount, this is normal.
There would be cause to comment only if there was a significant increase in headcount costs without an increase in revenue (indicating problems) or a significant jump in revenues that did not result in a significant headcount cost increase. This would mean the much promised but still absent non-linear revenue streams may be finally on the horizon, he said.
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