Dinesh Divekar
Business Mentor, Consultant And Trainer
Asso.prof.(commerce & Management)

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Hello experts, What is the ideal HR cost to total business revenue ratio? Apart from this, what are other important ratios which an HR should know. Regards
From India, Bhubaneswar
Hi Amar,
Is't for an academic interests for a practically oriented application. Moreover, you have to tell us more about the users, the entity, the operations-whether producers/manufacturers or service providers, size, location(s), practices followed whether recruitted, trained thru' hired consultants or carried out in-house, appx. turnover p.a. etc.

From India, Bangalore
Dear Amar,

You could have mentioned your industry, nature of your finished product etc. The HR cost to business ratio will vary from one industry to another and from one company to another. This is because every company has its own business model. Look at HP and Dell. Though both manufacture the computers, laptops, printers, servers etc, their business models are different.

To settle your query, let me suggest you measurement of:

a) HCROI: - Earlier I have give comprehensive reply. You may click here to refer to my reply.

b) Labour Index: - Labour Index: - The ratio of quality cost to direct labour hours, it has the advantage of being easily computed (from accounting records) and easily understood, but it is not always effective for long-term comparative analysis when technological advances reduce labour usage.


Dinesh Divekar

From India, Bangalore
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