December 29, 2016
Corporations have extraordinary infrastructure invested in their staff. While the costs of these departments can be staggering, the pressure to be efficient is relentless. Staff overhead is the first place consultants and new CEO’s look for reductions. If you consider how much profit it takes to pay for a staff member, an incremental revenue analysis can be illuminating. An organization with a healthy 40% contribution margin still has to generate an additional $200,000 in revenue to break even on an $80,000 salaried employee – not including benefits.
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