The 2014 CSP Invitational Staffing and Recruiting Conference:

June 11^th -14^th at the M Resort, Spa and Casino in Las Vegas, Nevada: open to all.

For more information about the seminar, visit the California Staffing Professionals website.

On June 12th and 13th join Michael Neidle, CEO & President of Optimal Management, Inc. and a frequent contributor to LinkedIn to lead sessions for staffing leaders. Hear him talk about how to Maximize the Growth & Value of Your Co/Mini MBA Program Overview and The Size of Your Local Market Niche – 2014.

June 12^th

• An all day session including: becoming a leader in your marketplace; differentiating your services; creating value added services; documenting how you can increase client profit; the use of metrics to maximize profits; creating win-win comp, tactical and strategic plan; control the MSP/VMS process; creating a guaranteed exit plan; dealing with crisis and much more. This will include a hands-on case study where the attendees will solve practical staffing problems using the tools demonstrated.

June13^th

• This session will provide estimates for key temp niches as requested by attendees, a review of the impact of 3D manufacturing (the next industrial revolution); other trends and how the economy will impact staffing and Q&A from audience.

The all day session will be an overview of a mini MBA certification intended to be offered later this year covering: management/leadership, finance and accounting for owners and mangers, marketing/recruiting management; crisis management, organizational development and support functions. Copyrighted profitability modules will be licensed in Post Graduate training courses. Program certification should enhance results and company market value.

Please feel free to reach out directly for more information at LinkedIn Michael Neidle or at the Optimal Management website.

Optimal Management & Michael Neidle:

• Optimal Management has been in business 20 years serving all staffing sectors
• Check out our ongoing series on “How Small and Mid Sized Companies Become Large”
• Prior to OM, Sr. VP of Snelling and Exec VP of Hall Kinion Neidle (now part of K Force)
• Sr. exec at Fortune 500 corps.(Phelps Dodge, Anacomp, DNC, Novartis, Crane)
• CEO, CFO, Mkt. Res. Director, Director of Planning, Economist
• Start up companies in: materials, transport and construction
• MBA, Chemical Engineering degree. CUNY, Univ. of Bridgeport, Yale
• 200+ speaking engagements, articles and 15 cover stories
• On Good Morning America, quoted in the WSJ, LA Times, SI and the Hispanic Times
• Colonel MS National Guard, built the lowest cost plant in the industry, patentable materials and processes
• Made presentations at NYSE annual stockholders meetings
• Worked in the IT, engineering, environmental, services, financial and manufacturing sectors

Do you measure the true profitability of your individual contributors rather than just their sales?

Many companies look at how much sales a person is generating instead of how much money he is making for the company.

For example, say sales rep A is your top producer who brings in $2.0 million in gross sales while your average rep is at $1.5 million. But let’s say that the margin of sales rep A is 12% and your average person is at 16%. Thus, sales rep A’s margin is $240K, which is the same as our average rep. On top of this the total compensation cost, which includes base salary, commission, payroll taxes and workers’ comp is $160K for rep A due to his longevity and high base salary while the average rep is at $140K. Thus the contribution (margin less total compensation cost) of sales rep A brings in $80K while the average sales rep is $100K.

The next step might be to determine how much overhead each sales rep has to absorb to make a profit. Lets say that our overhead (all expenses other then the cost of our sales reps is $600K and we have 10 sales reps. That means that each person has to bring in $60K for us to just breakeven. Sales rep A’s full absorption profit is $20K, while the average rep is at $40K or twice that of our “top” producer when we look at their relative profitability. Another way of looking at this is that we have a 1% profit on sales for rep A vs. 2.7% for our average rep.

When setting up compensation plans it might be a good idea to look at the proverbial bottom line of what a person generates not just the gross sales that they bring in. In this example we paid a lot more to retain a “high producer” then may be warranted. Think of this as the equivalent of the famous movie Money Ball, where the Oakland Athletics baseball team focused on assembling a team of players based on unbiased performance analytics and metrics and won several pennants. Instead of signing overvalued players, they instead looked at the bottom line of what their players were producing. This approach then became the standard that many other teams emulated. One should consider doing the same in running their business.

We welcome your questions as to the challenges you face in order to grow.

To see all articles in this series please go to http://optimal-mgt.com/blog.