Infosys' employee costs may rise as it hires more people overseas

The company also expects rise in minimum wage for H-1B visa-holders in US to impact its margins

The employee costs of Infosys, the country's second-largest information technology (IT) services exporter, might increase as the company hires more local employees in key global markets in the US and Europe. 

The company, which has announced various cost control measures to maintain a higher profitability at operating margin of 23-25 per cent, has a few hundred employees who are paid more than Rs 1 crore or equivalent in local currencies in the countries they operate.

According to Economic Times report on Wednesday, Infosys is paying more than 1,800 employees in its overseas locations over Rs 1 crore and 150 of them have been hired last financial year. The company's annual report says Infosys has listed around 50 people earning compensation of over Rs 1 crore, including Chief Executive Officer (CEO) Vishal Sikka and Chief Operating Officer (CFO) Pravin Rao.

Infosys’ decision to pay higher salaries to its overseas employees may have an impact on the company's profitability as it expects the US administration to raise the minimum wage for H-1B visa-holders. 

While Infosys and other Indian IT services companies brace for a higher cost of sending engineers to the US for at least four quarters, analysts say the cost of hiring locally will also add to the cost of service delivery as the wage for experienced people in main cities will begin from $1,30,000.  

Infosys employs around 48,400 people in its overseas locations, which includes people on visas of its total workforce of 2,00,364.