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You will need to consider whether people are employed on a full
time or part time basis when using the calculator. For example,
the number of people employed in a business could amount to 3.6
including 2 owners, one full time employee and one part time.
If you have part time employees, the calculator estimates the
number of full time equivalents based on a 40 hour week.
The ratio provides a useful productivity measure. It can be used
to assist monitor ongoing performance. It can also assist
determine the level of sales that a business needs to generate
when increasing staffing levels.
It is worth considering the role of employees when using the
ratio. The degree of specialisation of employees tends to
increase with larger businesses. Different employees will
undertake varying roles such as sales, production,
administration or management. Personnel directly involved in
sales will tend to have a stronger influence on the ratio than
those in other roles.
Ratios should be considered over a period of time (say three
years), in order to identify trends in the performance of the
business. You should seek professional advice when analysing or
acting upon this ratio.
The calculation used to obtain the ratio is:
Sales per Employee =
Sales
No. of people employed (owners & employees)
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