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IT Biggies Spent 62% Of Revenues On wages in FY22
-Indian IT companies saw their revenues double in the last five years. -Top companies like TCS, Infosys and Wipro have been consistent, while the smaller ones have paid more salaries to retain or attract talent. -TCS, Infosys, Wipro and other Indian IT companies have paid nearly ₹12 lakh crore as salaries in the last five years
India’s IT sector has seen an unprecedented boom over the last five years – something that few sectors can boast about. However, salaries are eating into more than half of the revenues that these IT companies earn.
Lucrative jobs and salary hikes have attracted a large number of people to the largest IT services companies like TCS, Infosys and Wipro, among others.
According to Business Insider India research, IT companies paid as much as 62% of their revenue as salaries in FY22. L&T Infotech was the most generous this year along with its sister company Mindtree, while Tech Mahindra held on to its purse a lot more tightly.
Over the last five years, giants like TCS, Infosys and Wipro have maintained their salaries outflows at an average of 53-55%, while the smaller players like L&T Infotech (LTI) and Mindtree shelled out the most, between 60-63%. Yet again, HCL Tech and Tech Mahindra (TechM) emerged the most miserly, with an average outflow of just 51%.
Interestingly, Infosys, TechM and Mindtree managed to reduce the ratio of salaries to revenue over these five years, while TCS, Wipro, HCL Tech and LTI ended up with higher salary growth when compared to revenue.
Essentially, what this means is that while all the IT companies managed to grow their revenues from FY18, only some of them were able to control their salary expenses.
A higher growth in salary expenses when compared to revenue means that companies paid more to retain existing talent or hire freshers.
Overall, these seven IT companies earned nearly ₹5.5 lakh crore in revenue in FY22, and paid out ₹3 lakh crore as salaries. In total, over the last five years, these companies earned nearly ₹22 lakh crore and paid out nearly ₹12 lakh crore as salaries.
