PPR = Personnel Productivity Ratio
Chip Evans Ph.D
Consultants | Advisors | Research & Analysis | Market Potential | Mergers & Acquisitions | Innovation | Startups
White Board Solutions vs. White Paper Problems
In simple terms...
PPR = The relationship between TOTAL Payroll Cost vs. Gross Profit
Your largest Cost after COGS (Cost of Goods Sold)...Is always Payroll Cost
Payroll is a factor of many decisions:
- Compensation Salaries & Wages
- Commission & Bonus Programs
- Benefits Offering
- How you have Built your Structure
- How you do or don’t Train
- Your Turnover Situation
- Pure Headcount
- How you Manage your Business
A Key Formula for Success!
White Board Example A:
White Board Example B:
Remember: In these examples…..We are saying that 35% PPR is most likely too low of an overall payroll. That is usually indicative of a payroll that is too small and the organization usually does not have enough time to sell. In other words we are saying to be cautious about payrolls that are too small as they create logjams or unproductive selling environments. As well as PPR’s over 55% are usually indicative of need for restructure.
We are not saying that 55% is the most profitable or optimal PPR%…. we are saying that it represents the high end of the sweet spot in one specific industry. It will vary by each industry.
Chip Evans, PH.D.
Ron Voelker
The Evans Group LLC
www.theevansgroupllc.com
PhD, MPhil, PGD, BSc, Chem.Tech. Eng, Text. Tech, C.Text ATI, C.Col SDC, Diplomate SDC ~ The University of Leeds
8 年Very well explained + made simple recommendation Chip Evans Ph.D a PPR below 55% in a balanced manner would contribute to a healthy business.! 'Thanks'
Consultants | Advisors | Research & Analysis | Market Potential | Mergers & Acquisitions | Innovation | Startups
8 年Correct, Alan. Our consulting figures in all costs, including anyone or service contracted against a project. We also do PPR for the company in general, not by project, to show PPR, as some industries are easy to see: It must be X or lower, or else it will fail. Ex: Food cost at a restaurant must be X or less, depending upon the type of food. Many forget the variables of the food cost, as it's not just food. Your comments are very much that of an experienced consultant, that sees it. Thanks
Consultant - CED, Information Technology
8 年Chip are you also remembering that contractors and consultants are not on the payroll but costed against the project(s), in some cases this may give the appearance of a small payroll that in fact may be larger. Another factor here just for the fun of it is the administrative end of the payroll, many organizations utilize Cyborg as it was just to cumbersome to provide in-house support, as a matter of fact if you do have a large payroll to support it may be worth looking into just how many people it is taking to support the in-house v utilizing outside resources. Just my thoughts on it. But great and informative post.