In order to determine if you are in fact hiring the proper number of staff to work, not just to get the job done, you need to calculate your labour costs. This will determine if in fact your overhead costs are equal to what you are paying your employees.
If your labour costs are too high, then you need to look at making reductions, as overall you are not walking away with reasonable earnings. Cutting down on expenses doesn’t need to mean cutting own on staff, provided it reduces your overall costs. Simply ensure that your earnings potential is higher. The recommended labour cost percentage depends entirely upon your industry, and the extent of time that you have been in business.
