Staff cost ratio
The personnel expense ratio is an economic key figure that relates the personnel expenses shown in the profit and loss account to the overall performance or sales of a company .
General
In most companies, personnel costs play an important role. This is why it is important for personnel controlling and for external analysts ( rating agencies , credit institutions ) to use key figures to determine the significance of personnel costs for a company. Using this key figure, also known as the personnel cost ratio, a company can compare itself with other companies in its sector in order to see whether competitors achieve their performance with less personnel expenditure. The personnel expense ratio also allows conclusions to be drawn about the wage level as well as the fixed costs and thus the company's financial flexibility in times of fluctuating employment . The personnel cost ratio is a measure of productivity and efficiency in a company.
detection
To calculate the personnel expense ratio, one divides the personnel expenses (from the profit and loss account) by the total output or sales of the company:
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Companies with personnel cost ratios of more than 50% of total output or sales are called personnel cost-intensive companies . A high personnel cost ratio means a high proportion of fixed costs; As a result, the company can get into a corporate crisis because profits decrease or even losses occur due to the cost retention. While, for example, material costs, as predominantly variable costs, tend to automatically decline when sales fall, salaries must continue to be paid.
activities
There are opportunities to reduce personnel costs, on the one hand, by increasing sales and, on the other hand, by outsourcing the company's activities. This reduces the vertical range of manufacture . Under certain circumstances, increases in wages cannot be passed on immediately or, due to competition, not at all in the sales prices. Positive impact on the personnel cost ratio has a systematic basis understaffing , an existing overcrowding leads to deterioration of the odd.