Don’t Depend on Recovery to Boost Sales Per Employee

By Andrew Paparozzi
In March 29, 2010

As the table below shows, sales per employee is down significantly in all company-size categories since 2007. That isn’t surprising. We couldn’t possibly cut employment as quickly as sales have fallen over the last two years—not without leaving ourselves totally unprepared for recovery. 

Recovery is finally coming. But we can’t count on it to rebuild sales per employee as we could in the past because recovery no longer widens our margin for error. Despite record consolidation—we’ve lost nearly 7.0% of our establishments in the last two years alone—competition is getting more intense and more diverse. The result is one of the new rules of recovery discussed in the NAPL State of the Industry: Strategic Perspective 2010: Build productivity and control costs as vigilantly during recovery as we did during recession. To quote one participant in our research: 

“On a minute-to-minute basis, even when the recession is over … we must to continue to manage cost like we’ve never managed cost before. Whether that is a review of every invoice that comes in or every contract to make sure we are not spending too much, we have to make sure we have a quality management process in place that support continuous improvement so we can take cost out and increase productivity. We just have to have exceptionally run operations today to survive. And that is not going to change anytime soon.” 

How will we make our operations exceptional? How we will keep bad habits and inefficiencies from creeping back in as recovery progresses? How will we ensure, as another NAPL State of the Industry participant puts it, that we don’t “use being busy as an excuse for not getting better?” The answers to questions like those will determine who profits and who doesn’t from the recovery ahead.

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Andrew Paparozzi

Epicomm's Andrew Paparozzi, Vice President/Chief Economist, is well-known for his accurate and thoughtful discussions on the economy and US commercial printing industry. A foremost author and speaker on economic business trends in the printing industry, Paparozzi heads Epicomm's Printing Economic Research Center.

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