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We take a look at the latest results of the Quarterly Financial Statistics (QFS) as published by Statistics South African and focus on the income and expenses of various enterprise sizes.
Does employee costs make up a bigger chunk of smaller enterprises total expenses than that of larger enterprises? We take a look. |
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Total income, total expenses and net profit/loss per enterprise size
The bar chart below shows the total income, total expenses and net profit/loss per enterprise size in South Africa for the quarter ending September 2018. The one positive that can be taken from the chart below is that on aggregate all firm types made a net profit for the quarter ending September 2018.
Below a summary of the total income, expenses and net profit/loss made per enterprise size during the quarter ending September 2018:
Total Income:
Total Expenses:
Net profit/loss:
Net profit margin:
Taking a look at the employee costs as a percentage of total expenditure we find the following per enterprise/business size:
The above clearly shows that employee costs is by far the highest for smaller businesses. Part of the reason for this is the fact that in order to attract and keep talent at smaller businesses, these firms need to fork out more money in order to keep talent within their ranks and stopping them from moving on to larger companies. Another possible reason for the high employee costs in small enterprises is the fact that smaller businesses have less business expenses such as research and development, production plants, machinery and equipment etc, and due to this the overall contribution of employees to total expenses are higher.
Total Income:
- Large: R1.592 trillion (62.4% of total income of all firms)
- Medium: R235,7 billion (9.2% of total income of all firms)
- Small: R723.2 billion (28.3% of total income of all firms)
Total Expenses:
- Large: R1.522 trillion (63% of total expenses of all firms)
- Medium: R219.04 billion (9.1% of total expenses of all firms)
- Small: R673.8 billion (27.9% of total expenses of all firms)
Net profit/loss:
- Large: R70.15 billion (51.5% of total net profit of all firms)
- Medium: R16.7 billion (12.3% of total net profit of all firms)
- Small: R49.39 billion (36.3% of total net profit of all firms)
Net profit margin:
- Large: 4.40%
- Medium: 7.08%
- Small: 6.83%
Taking a look at the employee costs as a percentage of total expenditure we find the following per enterprise/business size:
- Large: R183.7 billion (12.04% of total expenses of large businesses)
- Medium: R30.1 billion (13.71% of total expenses of medium sized businesses)
- Small: R133.93 billion (19.88% of total expenses of large businesses)
The above clearly shows that employee costs is by far the highest for smaller businesses. Part of the reason for this is the fact that in order to attract and keep talent at smaller businesses, these firms need to fork out more money in order to keep talent within their ranks and stopping them from moving on to larger companies. Another possible reason for the high employee costs in small enterprises is the fact that smaller businesses have less business expenses such as research and development, production plants, machinery and equipment etc, and due to this the overall contribution of employees to total expenses are higher.