If you thought techies got the biggest hikes last year, think again...

• Total employee cost among the top 500 Indian companies skyrocketed to a whopping ₹10.8 lakh crore in 2022.
• The technology sector contributed half — or about ₹552 crore — of this ₹1.2 lakh crore increase in employee expenses.
• Overall, five out of every ten rupees spent on employee cost was spent by the BFSI and technology sectors.

The total employee costs of the top 500 Indian companies skyrocketed to a whopping ₹10.8 lakh crore in 2022, representing the highest growth in the last eight years. This is the first time Indian employee costs crossed ₹10 lakh crore mark.

The total employee expense of the Nifty 500 — an index representing the performance of the basket of top 500 companies listed on National Stock Exchange (NSE) — surged by a whopping ₹1.2 lakh crore in the last one year, a latest report by Motilal Oswal has revealed.

Notably, the brokerage only considered the spending of 470 companies, instead of 500 — those which had a 10-year history.

The technology sector contributed half — or about ₹552 crore — of this ₹1.2 lakh crore increase in employee expenses. The demand for tech talent and hence their salaries grew multifold last year.

Ola founder and CEO Bhavish Agarwal took a dig at the tech hiring situation last year, saying that it would be cheaper to outsource tech jobs to Silicon Valley in California as engineers salaries increased multifold in India.

Even Amrish Rau, CEO of Pine Labs, highlighted that the salary expectations were at an all-time high last year as they were getting ‘amazing offers’. The expected salary hike ranged anywhere between 30-80%, most of them being in the higher range above 60%, as per specialized staffing firm Xpheno.

Technology sector still fell short

In spite of the comments and memes, the technology sector was not the biggest reason behind the increase of overall employee expense costs. The sector which won the top spot is non-banking financial companies or NBFCs.

According to the Motilal Oswal report, employee expenses increased by 23% in the NBFC sector that falls under the banking, financial services and insurance or BFSI sector. For the technology industry, the number lingered at 19%.

While the tech hiring and salaries did pick up in 2021, the banking and financial services sector never really saw a dull time in the last two years due to good credit growth, eased interest rates and more.

Four Indian banks — SBI, HDFC Bank, ICICI Bank and Axis Bank— and finance company HDFC even made it to the list of top ten Indian firms in the Forbes Global 2000 list earlier this year due to their performance last year.

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