News: Average operating costs per employee for MNC R&D firms on decline

Employee Relations

Average operating costs per employee for MNC R&D firms on decline

According to ‘Operational cost benchmarking study’ conducted by Zinnov, a management consulting firm, average per employee operating costs for MNC R&D firms declined by 6% in FY12. The cost per employee settled at US $40,604 in FY12 as compared to US $43,174 in FY11. The study based on a sample of 55 R&D centers with over 37,000 employees across India states that the focus on talent optimization and expansion to tier 2 cities resulted in these savings for R&D firms. Other cost savings measures included use of technology for collaboration and limiting project-critical travel, consolidation of offices into single-facilities, reduction of professional services costs by building in-house talent and negotiating on third-party vendor fees. The study points out that MNC R&D centers in India contributed to a net savings of over US$70 billion for the headquarters in the last 5 years. 

According to ‘Operational cost benchmarking study’ conducted by Zinnov, a management consulting firm, average per employee operating costs for MNC R&D firms declined by 6% in FY12. The cost per employee settled at US $40,604 in FY12 as compared to US $43,174 in FY11. The study based on a sample of 55 R&D centers with over 37,000 employees across India states that the focus on talent optimization and expansion to tier 2 cities resulted in these savings for R&D firms. Other cost savings measures included use of technology for collaboration and limiting project-critical travel, consolidation of offices into single-facilities, reduction of professional services costs by building in-house talent and negotiating on third-party vendor fees. The study points out that MNC R&D centers in India contributed to a net savings of over US$70 billion for the headquarters in the last 5 years. 

Source: The Economic Times

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Topics: Employee Relations, #Updates

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