By getting the most from employees, these 32 highly efficient companies are delivering nearly 45% more sales and four times the profit per person of an average UK sound equipment company. Typically, they are generating £208,000 sales per person and £13,000 profit per person. Last year, the average UK sound equipment company achieved £143,000 sales per employee and a mere £3,000 profit per employee.
At most risk of being left behind, 20 companies have been identified as only generating an average of £81,000 per employee. Their spend on salaries is far too high for them to be competitive, consuming 35% of sales. This figure should be 20% or less. If these companies are to catch up with new standards of productivity, 1300 jobs could be at risk.
David Pattison, senior analyst at Plimsoll Publishing, maintains: "As I see it, it is very easy to fall for the 'we need more people' screams from your staff. You have to watch this. It is vital to keep your sales per employee ratio and perhaps more importantly your percentage of sales used for salaries under control.
If you take nothing from our industry analysis at all, just remember three key facts. Get your sales per employee up to or above £143,000, your spend on salaries to 20% of sales or less, and control your debts. These are the ingredients for a healthy and competitive UK sound equipment company."
Pattison continues on why he sees job losses over the next 12 months at the 20 companies with productivity shortfalls. "Essentially there are two reasons. For 14 of them it's a question of pure survival, as each one is currently under severe financial pressure. Six on the other hand are fundamentally well run companies with only low productivity letting them down. Directors of these companies must act now to improve employee efficiency and catch up with the leaders."
The latest edition of the Plimsoll Portfolio Analysis - Editor Sound Equipment individually assesses the financial performance of the industry'sleading 237 players and rates each one based on its overall health. Sales per employee figures are included for the reader to identify the companies most likely to be considering redundancies.
The 409 paged analysis is available for £305 (Paper) or £499+VAT (Electronic). Order by visiting the website or calling the number below. Readers of L&SI Online will receive a 5% discount.
(Sarah Rushton-Read)
