“The salary inflation for the three lakh employees that we have in our roles has been consistently between 6% and 8% year-on-year. Only for IT over the last one and a half years, it has slowed down to 2-3%,” Dathi told CNBC-TV18 on December 12.
She explained that the slower salary raise for techies was more like a correction from the massive hikes that were offered during the two years of the COVID-19 pandemic.
At an event on December 5, the CEA said: “Profitability growth of corporates has been absolutely impressive, the truth is the corporate sector has never had it so good as in the last four years despite the challenging environment. However, compensation to employees has become weaker, corporates have used profits to deleverage.”
When asked if any fiscal or monetary policy intervention was required at this point to improve employee pay and hiring practices, Dathi said, she said it was not needed.
Also Read: Corporate profits up 4 times in 4 years but did salaries keep up? CEA’s message to India Inc
She reiterated that there has been a consistent salary inflation of 6% to 8% over the last few years. Even in the last four to five quarters, barring IT, there has been good momentum in new job generation.
“Many of these jobs are shifting from informal sectors to formal sectors, which is good, because the contributions to PF, their access to insurance and other social security benefits will be improving.”
She added that Teamlease has been consistently adding about 20% net new employees year-on-year across sectors, including BFSI, FMCG, FMCD, and pharma. Currently, manufacturing is the fastest-growing sector for the staffing firm. “We are very positive about the outlook.”
On the contrary, CEA Nageswaran has suggested that corporations need to make India the byword for quality and so, it is time for them to make a good combination of employment and capital spending. “We need to think big as the global environment is going to be extremely unhelpful…Therefore, we need to have a compact within the country to hire better and skill our people. A better balance is needed by corporates in the share of profits going to workers and capital spending,” he said.
Separately, Teamlease CFO shared that the firm has been evaluating merger and acquisition opportunities in HR Tech and those in the pipeline are smaller in size, and are below ₹50 crore. The company is also looking at employee payroll and expense-related opportunities.
Also Read: IT revival far from peak, fresher hiring slows in sector: Naukri.com
