What % of your gross revenue goes to wages?

[kgramps]

Hi Everyone,
this is my first post on this forum so I'm hoping you guys can help me with some data gathering. As our business grows, I'm constantly refining my staffing levels. Lately I'm trying to find data on what different industries pay there employees as a percentage of their overall businesses gross revenue. I'm wondering if you guys would be willing to share this value from your business? I don't need to know any specifics such as number of employees, their specific wages or your actual gross revenue, just a percentage to see where I'm stacking up. This percentage would also include the owners salary as well. This will really help be decide upon our next hire. If it helps I am in the screen printing/embroidery business.
Thanks in advance!

[Fulcrum]

As our business grows, I'm constantly refining my staffing levels.

Glad to hear your business is growing.


Lately I'm trying to find data on what different industries pay there employees as a percentage of their overall businesses gross revenue.

Given that I'm in a different industry altogether, requiring high skill levels with tools/machines and a reasonable understanding of rotational mass physics, how would my wage vs gross sales number help you considering the quote below?


If it helps I am in the screen printing/embroidery business.


I'm wondering if you guys would be willing to share this value from your business? I don't need to know any specifics such as number of employees, their specific wages or your actual gross revenue, just a percentage to see where I'm stacking up.

Nope. See next quote for reason.


This percentage would also include the owners salary as well.

How would including the owner's salary be beneficial in a study like this (especially from unrelated industries)? The amount of indirect hours an owner puts in will really skew the data.

Personally, I think you're gathering data for some other report rather than what you claim.


This will really help be decide upon our next hire.

Really? So the fact that I'm more than willing to "overpay" (based upon industry averages) quality employees when they perform exceptionally will help you decide on your next hire?

[Brian Altenhofel]

In the US, that is available from the Census Bureau: U.S. Census Bureau: Industry Snapshots (http://www.census.gov/econ/snapshots/index.php)

[kgramps]

Hi Brad,
actually I'm not trying to gather info for anything other than gaining an idea of what my industry, or similar industries, roughly pay their staff as a % of gross. It's that simple. If I find out that our current payroll is 30% of our gross, and our industry should come in around 20% for example, then yes that will help me decide upon whether a new hire is feasible. My paycheck is still added into my gross payroll (yes we all work numerous indirect hours that aren't reflected in salary. At least that's how we do it), which affects the overall payroll numbers.
No problem that you don't want to share info. I can respect that. If you do know of any sources where I can find out info like this, I would be greatly appreciative if you passed it along.
Thanks,
Kieran

[cancanconat]

Hey Kgramps - I think that maybe you are just being a little vague and maybe this is not the best place to ask that question - I don't think it would do you much good to have that information from a bunch of random businesses that are in all different economic areas around the country and a realm of different industries. I think you need to find a forum where you can ask those questions of businesses in your same industry....or in your exact economic area - ask businesses that maybe are not the same industry, but businesses that use a similar type of labor - so you can compare.

Also - just another suggestion - what type of employee are talking about adding? That will play into it as well. If you are talking about adding a sales person - that is very different than adding a production person or office person. To add a sales person, you need to know they will generate enough new sales to pay for the position. If you find yourself needing another production person- look at WHY do you need that? Because you can't keep up with production? If that's the case, you should be able to see the extra cash flow that helps prove the theory. If you don't see that - you need to look at why you need someone but it seems you cannot afford it. Do you current production people need to pick up the pace or are they already being efficient? If already efficient, do you need to raise your prices?

You should be able to possibly get compensation statistics from a local Chamber of Commerce or other local agency. Possibly a state agency or from the US Census Bureau for your area.

Good luck - I know some of my information seems pretty basic and maybe obvious, but it's hard to know what you already know and don't know :)

[Fulcrum]

I think you need to find a forum where you can ask those questions of businesses in your same industry....or in your exact economic area - ask businesses that maybe are not the same industry, but businesses that use a similar type of labor - so you can compare.

He's more than welcome to ask. The original post came across as if he's fishing for salary and wage information for some kind of broad report. Around here, $15/hour is about the top end wage that is recommended (that's how it was phrased when I asked).


Also - just another suggestion - what type of employee are talking about adding? That will play into it as well. If you are talking about adding a sales person - that is very different than adding a production person or office person. To add a sales person, you need to know they will generate enough new sales to pay for the position. If you find yourself needing another production person- look at WHY do you need that? Because you can't keep up with production? If that's the case, you should be able to see the extra cash flow that helps prove the theory. If you don't see that - you need to look at why you need someone but it seems you cannot afford it. Do you current production people need to pick up the pace or are they already being efficient? If already efficient, do you need to raise your prices?

This is a very apt observation.


Good luck - I know some of my information seems pretty basic and maybe obvious, but it's hard to know what you already know and don't know :)

You would think that, but look at how many household name companies only look at 3 metrics when determining costs and prices. Many of them can't seem to figure out that you can only reduce most costs to a certain point (utilities, rent, property taxes, raw material, subbed out work, labor, etc) before vendors go broke and quality drops out. I know of one company that was told to reduce assembly time by 50% without bringing in people or machines, nor were they allowed to reorganize the factory floor to improve/reduce workflow.

[turboguy]

I'm wondering if you guys would be willing to share this value from your business? I don't need to know any specifics such as number of employees, their specific wages or your actual gross revenue, just a percentage to see where I'm stacking up. This percentage would also include the owners salary as well. This will really help be decide upon our next hire. If it helps I am in the screen printing/embroidery business.


I really can't see how a percentage of wages including officers pay as a percent of gross sales will help you much but ours is around 20%. I am in a very different business than yours however.

[tallen]

FWIW

businesses unrelated to yours

For one business, wages paid for 2015 were 21% of gross revenue; for another business, wages paid were 18% of gross.

(I was just curious...)

[Harold Mansfield]

I'm a one man show, so there's nothing I can personally share that will help. However, as everyone is saying...every company and industry is different and what someone else pays has no bearing on what is right or normal for you.

The only way I can equate this is by comparing 2 bars with similar operations, demographics and expenses. I can look at a bar in an area serving the same demographic, with the same expenses, of roughly the same size, same number (and type) of employee and the same offerings and use his expenses as a guideline for opening a bar that will have be roughly the same serving the same area.

But I can't apply what I've learned to a bar in a different area, with different offerings, serving a different demographic, with different pricing, that's a different size and so on and so on. It will be completely different. Also, I have no idea if the business I'm comparing is being run well.

If you just want to see stuff, you can look at the earnings statements of publicly traded companies. Expenses are listed in detail, and the info is usually public. Other than that, Census, local chambers, Universities and so on can give you general info per industry.

If I had employees I wouldn't be comfortable posting that info in public on a forum.