Employers in India have no choice but to pay high salaries to their staff, with industrial growth demanding more manpower.
India Inc was forced to increase salaries by as much as 31 per cent in the quarter ended March 31 and by almost 17 per cent in 2005-06, a study conducted by industry body Assocham said.
Led by financial services, which increased its wage bill by 212 per cent, IT sector and banks also hiked the salaries in the quarter. IT sector increased its personnel expense by 52.6 per cent while banks increased the expense by 26 per cent, the study said.
"The cost of hiring and retaining the staff in the last quarter was significantly higher than the whole of 2005-06," the study said.
The personnel expenses for financial services were up 136 per cent in last fiscal, for IT firms the increase was 42 per cent and for banks the cost on this count went up by 16 per cent.
"Thanks to buoyancy in the industrial growth and services, the companies are hiring aggressively and the human resource is asking for better price," Assocham president Anil K Agarwal said.
There is an increased demand for manpower in the expanding retail business. The staff cost in this sector has shown a tremendous increase.
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