Corporate employment growth slows to 5.5% in FY23: Bank of Baroda report

The growth in employment in the corporate sector slowed to 5.5 per cent in FY23 from 6.7 per cent in FY22, as approximately 3.5 lakh new people gained employment, compared to 4 lakh people gaining employment in FY22, a latest report released by the Bank of Baroda on Thursday showed. On the other hand, the average compensation increased by 10.1 per cent to Rs 12.5 lakh in FY23 from Rs 11.32 lakh in FY22, thus covering the inflation impact.

The report looked at the data from annual reports of 1,601 companies in 36 sectors having total sales of around Rs 97 trillion in FY23, where it is mandatory to publish the headcount numbers every year. The report examines the progress in the headcount over the past four years from FY20 to FY23.

The total headcount for FY23 stood at 67.42 lakh, up from 63.89 lakh in FY22, the report notes.

In terms of overall share in employment, the top 10 sectors account for around three-fourths of the total employment, which is led by information technology (24.4 per cent), banking (18.3 per cent), healthcare (6.9 per cent), textiles (5.5 per cent), and finance (5.1 per cent) among others.

However, sectors like automobiles, capital goods, construction, crude oil, consumer goods, mining, power, realty, and textiles saw a decline in the headcount in FY23.

"On a cumulative basis, the growth for the four-year period between FY19 and FY23 was 3.6 per cent, which is still below the potential that goes with an economy growing at 6.5–7 per cent per annum. For this four-year period, GDP growth averaged 3.6 per cent. But a recovery is definitely apparent post-Covid and the lockdown," the report also notes.

In terms of remuneration, three sectors (industrial gases, insurance, and crude oil) had compensation of over Rs 20 lakh, and nine sectors such as power, gas transmission, IT, alcohol, telecom, capital goods, durables, shipbuilding, and iron and steel had compensation between Rs 15 and 20 lakh in FY23.

Meanwhile, sectors like crude oil (-10.5 per cent), non-ferrous metals (-4 per cent), iron and steel (-1.7 per cent), and hospitality (-1.2 per cent) saw a decline in remuneration in FY23, as compared to FY22.

The report concludes that with the economy recovering in FY24 and some private investment taking off, there would be further traction in employment.