Profitability Based on Live Labor Costs (Models and Methodology for Analysis)
Profitability Based on Live Labor Costs (Models and Methodology for Analysis)

Author(s): Rositsa Ivanova
Subject(s): Economy, Business Economy / Management, Human Resources in Economy, Socio-Economic Research
Published by: Университет за национално и световно стопанство (УНСС)
Keywords: Workforce; Labor productivity; Models; Effectiveness; Factors; Influencing
Summary/Abstract: Labor is one of the factors that directly affect the implementation of the business plan of any enterprise. The effectiveness of the use of the labor force of an industrial enterprise is characterized by the labor productivity indicator, considered in two aspects. First, as an independent object of financial and economic analysis, i.e. as an indicator of efficiency, the value of which is formed under the influence of a system of direct and indirect factors. The task of the analysis is to establish and assess the strength and direction of influence of direct factors on the changes in labor productivity that have occurred. In the second aspect, labor productivity is analyzed as a factor influencing the formation and change in the values of other important key business indicators characterizing the activities of the enterprise. The object of study in the article is profitability based on the cost of living labor in the enterprise as an independent object of analysis. The subject of study are models for analyzing profitability based on the cost of living labor in the enterprise. The purpose of the article is to derive and propose improved model for analyzing the influence of direct factors on changes in profitability, calculated on the basis of living labor costs. To achieve this goal, tasks are solved to establish the influence of factors from different levels of management on changes in the values of this important business indicator. At the first level, the influence is exerted by changes in: annual labor productivity, average costs of salaries and insurance premiums for personnel and sales profitability. At the second level, the factors are related to changes in staff structure, use of working time and hourly labor productivity. At the third level, influencing factors are related to the structure of production by labor intensity, individual hourly labor productivity by type of products, average wage and insurance per person of the staff.

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