Gross Revenue Per FTE?

[Guest Thornton]

I am attempting to add another employee, but am being told by management that my income per FTE does not justify another employee. Management, a non-TPA business, knows little about the TPA business, and after 26 years in the business I know what my needs are. However, hard data would help.

Is information available that would give me an idea what the average income per FTE is in the TPA business, and where would I find it?

If anyone wants to offer this information on their own firm, it would be appreciated. I don't need income or number of FTE's, just gross income per FTE.

Thanks.

[Guest padmin]

We have done some comparative analysis on this. The range seems to run from $125,000 - $160,000 with $140,000 as a reasonable target. Financial service firms (non-tpas) are looking for more per FTE than our lower margin TPA businesses. Producing TPAs seem to generate more income per ee than non-producing tpas.

[GBurns]

Can you find another rationale for getting this additional employee?

What would be the effect on net per FTE?

Would an additional employee allow you to accept more business?

Can you show that you have turned down or lost business, that you would not have had to if this additional employee had been in place?

Would an additional employee free up more time for acquiring more business?

Sometimes you have to gild the lily for these people.

[SoCalActuary]

You should also consider the effects produced by having more employees.

Does it allow you to provide better service, avoiding error?

Does it require more stress to train or manage the employee?

Does it allow you a more productive span of control, so you don't have to do so many things (with the inevitable loss of quality)?

Do you have the potential to rapidly expand your business to cover the costs? Will this employee reduce the profitability of your unit or increase it?