How to increase staff profitability

Effective personnel management includes: providing the company with the necessary number of employees, rational use of personnel and increasing the level of labor productivity in general. Profitability of personnel allows to evaluate the use of labor resources of the enterprise.

Instruction manual

1

Profitability of personnel reflects the efficiency of use of labor resources in the company. This indicator characterizes the work of the labor collective of the company as a whole, and gives an assessment of the usefulness (productivity) of one employee. Profitability of personnel is calculated according to the following formula: Rppp (personnel profitability) = P (profit from product sales) / PPP (average headcount of industrial production personnel).

2

The personnel profitability indicator is affected by qualifications, experience, professionalism of the company's workers and their number. For example, a company may have a sufficient number of employees, but their lack of experience and proper skills will impede the production of products of appropriate quality. Therefore, this state of affairs will lead to an increase in costs and a decrease in profits from the sale of manufactured products.

3

Profitability of staff can be increased by improving the skills of existing staff. Improving the organization of labor will lead to a decrease in the complexity of products, increase productivity, increase profits from the sale of products.

4

A situation in which the staff is staffed with workers with the appropriate qualifications and experience, but the enterprise itself works on outdated equipment, will also lead to a decrease in the personnel profitability indicator. Old technologies and equipment do not allow to produce products that would meet market requirements in terms of quantity and characteristics.

5

On the contrary, technical re-equipment of production will increase the volume of products and improve its quality. So, the introduction of new equipment and modern technologies will improve the technical and economic level of production of the enterprise as a whole. Consequently, the profit from sales will increase, as well as the profitability of staff.

6

Low profitability of staff may indicate that the organization exceeds the established costs for the maintenance of employees: tax deductions, work clothes, transportation costs, compensation for mobile expenses and others. Thus, the profit that companies bring to employees is significantly less than the cost of their maintenance. Reducing the cost of maintaining employees can lead to an increase in the rate of return on staff.

note

Improving the efficiency of personnel use will lead to an increase in the indicator of personnel profitability. Various factors influence the profitability of personnel: the length of the working day, the change in the price of products sold, the level of production, equipment, and the cost.

Useful advice

Profitability of personnel helps to control the level of labor productivity, the effectiveness of workers and their maintenance costs. An increase in personnel profitability indicates an increase in productivity and a decrease in labor intensity.