Definition
On the basis of a given value for projected sales, managers can determine the break-even number of employees for a firm as follows: [1]
Break-even number of employees (#) = {Sales ($) x [Margin (%) – Commission (%)]} ÷ {Salary ($) + Expenses ($) + Bonus ($)}
References
- Farris, Paul W.; Neil T. Bendle; Phillip E. Pfeifer; and David J. Reibstein (2010). Marketing Metrics: The Definitive Guide to Measuring Marketing Performance (Second Edition). Upper Saddle River, New Jersey: Pearson Education, Inc.