SG&A Productivity Bridge

See whether SG&A changed because the business grew, support staffing productivity changed, people cost moved, or non-labor overhead intensity changed between two periods.

About this diagnostic

Compare revenue, SG&A staffing, people cost, and non-labor SG&A across two periods. The bridge separates the cost movement associated with business scale from staffing productivity, people cost per FTE, and non-labor overhead intensity. Use the same organizational scope and SG&A definition in both periods. For more information, visit our Business Transformation practice.

SG&A economics

Support-load profile

Compare actual SG&A with the support load implied by Period A economics.

SG&A movement

Positive values increase SG&A. Negative values reduce the support requirement.

Selected mechanism

Forward support-cost economics

Productivity creates financial capacity only when staffing and non-labor commitments convert it into cost.

End required FTE 197.2 226.8 at Period B productivity

End supported FTE 201.6 4.4 FTE of uncaptured capacity

Gross SG&A release $1.88M $1.45M people · $423K non-labor

Net SG&A release +$1.53M Payback in M6

Monthly support-cost path

The cost case separates required staffing from the staffing that remains committed while productivity and attrition move at different speeds.

Month Revenue demand Required FTE Supported FTE Gross SG&A release Cumulative net release

Operating thresholds

Minimum productivity improvement 12.5% Required to absorb end-horizon demand without incremental hiring after the entered attrition/backfill path

Maximum backfill share 23.9% Highest backfill rate that fully converts end-state productivity into staffing capacity

Maximum program cost $1.88M Largest one-time commitment preserving non-negative in-horizon SG&A release

What changed

SG&A PRODUCTIVITY BRIDGE: ILLUSTRATIVE DEFAULT RECORD OBSERVED PERIODS Period A revenue: $100,000,000 Period B revenue: $120,000,000 Period A SG&A FTEs: 200 Period B SG&A FTEs: 210 Period A people cost: $20,000,000 Period B people cost: $22,050,000 Period A non-labor SG&A: $10,000,000 Period B non-labor SG&A: $11,400,000 Revenue per SG&A FTE: $500,000 → $571,429 People cost per FTE: $100,000 → $105,000 SG&A / revenue: 30.0% → 27.9% SG&A movement: +$3,450,000 OBSERVED SG&A BRIDGE Revenue scale effect: +$6,000,000 Staffing productivity effect: −$3,000,000 People cost rate effect: +$1,050,000 Non-labor intensity effect: −$600,000 FORWARD SG&A ASSUMPTIONS Period B length: 12 months End-of-horizon revenue growth: 8.0% Target staffing productivity improvement: 15.0% Productivity starts: M2 Productivity fully realized by: M4 Annual attrition: 8.0% Attrition backfill share: 50.0% People-cost inflation: 4.0% Non-labor intensity reduction: 6.0% Non-labor savings start: M5 Non-labor savings fully realized by: M7 One-time productivity program cost: $350,000 Forward horizon: 12 months FORWARD SG&A RESULT End-horizon FTE requirement at Period B productivity: 226.8 End-horizon FTE requirement after productivity: 197.2 End projected retained staffing after net attrition: 201.6 End supported staffing: 201.6 End uncaptured productivity capacity: 4.4 FTE Cumulative people-cost release: $1,454,626 Cumulative non-labor release: $422,813 Gross SG&A release: $1,877,440 One-time productivity program cost: $350,000 Net SG&A release: +$1,527,440 Payback month: M6 OPERATING THRESHOLDS Minimum productivity improvement required to absorb end-horizon demand after the entered attrition/backfill path: 12.5% Maximum attrition backfill share that fully converts end-state productivity into staffing capacity: 23.9% Maximum one-time productivity program cost preserving non-negative in-horizon SG&A release: $1,877,440 METHOD STATUS Management-entered assumptions. The observed bridge separates SG&A movement into revenue scale, staffing productivity, people cost per FTE, and non-labor SG&A intensity. The forward analysis begins from Period B monthly revenue, Period B revenue per FTE, Period B people cost per FTE, and Period B non-labor SG&A intensity. Revenue grows linearly to the entered end-of-horizon growth rate. Staffing productivity phases in linearly from the entered start month through the entered full-realization month. Required FTE equals annualized monthly revenue demand divided by the resulting revenue per FTE. Projected retained staffing declines linearly using annual attrition multiplied by the unfilled attrition share. Supported staffing equals the greater of required FTE and projected retained staffing, preventing unsupported cost savings from being counted when staffing falls below the modeled workload requirement. The no-action staffing baseline uses Period B staffing productivity at the same forward revenue demand. People cost per FTE phases in the entered annual inflation rate over the horizon. Non-labor savings phase in from the entered start month through full realization and reduce the Period B non-labor intensity. Gross SG&A release equals no-action people and non-labor SG&A less the supported-cost case. The one-time program cost is charged when productivity work begins. No external staffing-productivity, attrition, backfill, inflation, or SG&A benchmark is used.

SG&A Productivity
Bridge

SG&A Productivity
Bridge

Separate the SG&A increase explained by revenue growth from the cost driven by staffing productivity, people cost rate, and non-labor overhead intensity between two periods.

SG&A Productivity Bridge

Outcomes Defined by Impact

SG&A Productivity Bridge

SG&A Productivity Bridge

Separate the SG&A increase explained by revenue growth from the cost driven by staffing productivity, people cost rate, and non-labor overhead intensity between two periods.

Outcomes Defined by Impact

Sign in

Create your account

Verify your email

Sign in

Contact us

Contact us

Contact

What we do

Recent work

Who we are

Featured

Sign up to download

SG&A Productivity
Bridge

SG&A Productivity
Bridge