Paisa vasool India Inc gets more productive in five years

economictimes.indiatimes.com:

employee productivity of India Inc — measured as revenue per employee — has steadily gone up in the past five years, even as staff cost as a proportion of total revenues has largely been maintained at 10%.

Data compiled by ET Intelligence Group shows the cumulative revenue per employee of ET-500 companies — the top 500 listed companies based on their revenues — has climbed 36% from ₹1.46 crore in FY19, to almost ₹2 crore in FY23.

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This, even as employee cost as a proportion of revenues has largely remained stagnant at nearly 10%. Revenue per employee did drop during the pandemic to ₹1.37 crore in FY21, but has since increased steadily over the past two years, coinciding with a period of increased digitalisation across sectors.


Services sector supporting trend
«During inflationary times, revenues tend to go up — so one has to be mindful of this fact when looking at productivity. If revenues were to be inflation-adjusted, then the trend would not be so promising,» cautioned Madan Sabnavis, chief economist, Bank of Baroda. «Despite this, productivity has actually improved. We are seeing increasing use of tech and capital. Certain sectors like high-end manufacturing and services like BFSI and IT have seen increase in productivity due to higher skill sets being employed, unlike other sectors such as transport & logistics, construction, mining and retail that still employ labour at the low level,» he said.

From 6.15 million cumulative employees on the payroll of ET-500