Even as the IT industry reports subdued earnings, the revenue per employee – a metric indicative of productivity – has improved in FY25 with this metric hitting a 7-year high for two players.
Three out of the top five IT majors grew their revenue per employee (RPE) in the range of 2 -6 per cent, in FY25, as per data sourced from research firm UnearthInsight. Further, for TCS and Infosys, the RPE has hit a 7-year high. Wipro and TechM, however, saw a fall in the metric in FY25.
TCS, Infosys and HCL Tech recorded a 2.7 per cent, 1.8 per cent and 6.2 per cent growth in RPE, respectively in FY25. RPE for TCS stood at $49,638 in FY25, it was $59,575 for Infosys, and HCL Tech clocked the highest at $61,946.
This comes at a time when revenue growth across the IT majors has been in lower single digits this fiscal and headcount growth has been subdued. Wipro and HCL Tech have seen a YoY dip in net employee count in FY25.
Growth drivers
Analysts note that the rise in RPE is largely driven by increased employee utilisation rate and overall productivity increase and not pricing improvements.
“After a phase of accelerated hiring immediately post pandemic, the top IT services firms are now rebalancing their headcount, and have been cautious on their hiring plans,” Gaurav Vasu, founder and CEO, UnearthInsight said. “In some of the cases, revenue per employee is now back to pre-pandemic levels of FY19. This is likely to improve further once the internal use of Gen AI matures,” he added.
Akash Verma, Practice Director, Everest Group, said that besides improvement in utilization rates, IT players have also leveraged automation and platforms to drive non-linearity of revenue. “Our calculations suggest almost half of growth in Infosys’ revenue per billable employee in FY24 came through improved utilisation,” he said.