Companies with high employee retention issues are hard to succeed. As we are digging deeper into analytics we are becoming closer to have good maths on these points.
How much of new employees your existing organisation can handle and what’ll be it’s average and worst financial conditions.
We advice companies with high employee cost to revenue ratio, to keep an close eye on that ratio. If at any point that ratio is exceeding 0.4 points in any directions, your organisation will have trouble handling it.
So we’ld advice, have a process in place. And a good training program for new employees at the services that is giving you higher sales volume and higher profit. And keep an close eye on it. And keep ramping up sales here. But understand that ratio.
Grow up team in new services slowly. And so the sales.
Organisational turbulence is one metrics that takes most companies go down. But it’s hard to see early on. Often the problem arises after 5-6 months. And make it difficult to handle, even if you are highly profitable.
Growth kills more businesses at faster rate, and stability kills businesses at a slower rate. So keep growing, but understand stability keeps you liquid.
So before you keep growth on trajectory, ensure fund of at least 3 times that of CIH needed, hence a profit index of 200-300%.
If you are planning speeder growth and you are just 100% in profit index. Takes external investment of another 2times of CIH needed, suggested in Periodic Profitability Graph, within one month of beginning the growth implementation. And if in any moment during high growth, your profit index reaches 120% or below, ramp sales up and you need to keep that number there to not fall out pray of downward spiral.
For high growth, I mean to say at par or above 20% of your present organization head count.
Hope that helps.