The Contribution Factor identifies optimal staffing for any organization.
5 Simple steps:
Identify number employees in current organization.
Tally in 3 columns by length time in same position. 1, 2, or 3 or more years
Multiply # employees in 1 by 5, 2 by 3, and 3 by 1. Add three totals.
Answer to 3 is realistic revenues from existing staff.
How does answer in 4 compare to projected annual revenues for division?
Have more or less employees than needed to meet revenue projection?
Ideally you answers to 4 and 5 will be within 5%. If so, congratulations
If not, there are 2 alternatives.
Hire or reduce staff, or
Increase sales.
CTA: Compile numbers for your organization.
Don’t make it difficult. You probably know how long key people have been in their current positions. If not ask them. This is good mid-year exercise to measure performance.
Let us know how close you came. Need some ideas to address differences? Schedule call.
Tom Ferree is the founder of Ferree & Associates and SecureEmploy, organizations focused on helping companies find exceptional talent and helping professionals advance their careers. Since founding Ferree & Associates in 1977, Tom has worked extensively with hospitality companies, executives, and rising leaders across the industry. Through SecureEmploy, he shares practical career strategies, leadership insights, and real-world advice to help professionals grow their careers and help organizations build stronger teams.
