Announcing the results of a Whizible survey for CFOs, conducted in November 2018
The survey statements were
1. Costs of project enterprises are largely fixed
2. Compensation to human resources is a large part of fixed costs
3. Increasing billable utilization of our human resources is critical for profitability
We received a good response from CFOs (Chief Finance Officers) throughout India for this survey.
The results in a nutshell
- Interesting to note that 54% of the respondents agree that project-based enterprises’ costs base tilts towards fixed nature, whereas 31% disagree. The result needs to be studied further.
- 80% of the respondents who are financial experts feel a strong linkage between the second and the third statement in the survey. This belief could be a result of a few assumptions such as
- The human capital of a project enterprise needs to be trained before allocating them on a project, or
- The trained employees are generally retained during the slack business season, so that they are readily available when the demand picks up
- If we assume that employee costs are mainly of a fixed nature, the business leaders would like to focus on generating enough demand to engage the available in-house talent, which is reflected in the third statement.
Here is the analysis of responses received
- 45% of the CFOs place high importance to increasing billable utilization of existing human resources to improve profitability, supported by a further 34%, who agree
- 80% of the CFOs agree/ strongly agree with the statements the human resource costs form a substantial part of the enterprise total costs
- 54% of the respondents agree that the costs of project enterprises are of a fixed nature to a large extent, while 31% feel otherwise
We had conducted this survey initially in September 2018 and the respondents were a mixed group of managers from IT and Engineering Services companies. We had published the results of this survey in October 2018 – check this blog post “What drives the profitability of project enterprises?”
Want to share your opinion on the survey statements? Please leave us a comment – use the box below the article.