What is the ratio of producers to support staff in the company?
You probably already know this information, as it is something that all good HR people will know. The question is: are you capitalising on it properly?
Do you explicitly use your knowledge in this area to inform your plans and strategy?
Good practice would say that this ratio is an indicator of the effectiveness of the business operating model, an indicator of the health of the company and a key measure of whether it is growing in the right way. You can use this data to look at productivity in your organisation, the benefit of investment made, or where new investment might be best channelled.
Put simply, ‘producers’ are typically people working on revenue-producing areas: making products or providing services. ‘Support staff’ are the people who ensure that they can do that.
Most industries will have norms for the ratios between people in these roles in particular areas of their business and you can use these norms in two ways: first to monitor how well your business is performing, and second to monitor whether there are new initiatives, technologies or processes that might impact on the ratios. You can use these ratios and patterns to have conversations about the decisions the business is taking in terms of where to invest and the impact that company growth is having on the ratios.
It is not enough to simply understand these ratios in the present context, however. The best HR people will also be looking at the impact that changes in demographics or technologies might have in the future. Research by the Adecco Institute found that HR people, on average, only plan 1.1 years ahead. But this is not long enough in advance to be planning how changes in technology, demographics, skills or processes might affect this ratio, which ultimately underpins the profitability and therefore health of the organisation.
The best way to plan for the future is to keep up to date with industry trends, and there is a wealth of material available to help you.
Track research on demographics, new technologies or work patterns that might affect these ratios, and find appropriate research institutes that specialise in your sector and keep abreast of their findings. This will help you to spot when these changes might happen, and will enable you to put processes or plans in place to make sure you are predicting and responding to these trends in the best way for your organisation.
Director, HR with Guts