Working conditions vary country to country, but more importantly, company to company.
JP Morgan have announced a new measure to combat over-working. Centerview settled its lawsuit from a former analyst who required 8 hours of sleep per night. Working conditions heavily affect well-being, well-being affects productivity, productivity affects the bottom line for a company.
The legal obligation of the company can vary significantly, and some business models account for this. Turnover can have a large impact on the bottom line and all industries are suffering according to a study by CIPD in 2024. So, when we value a company where the personnel are critical to the continuation of the business, we look at both the likelihood of anyone leaving through the company’s usual retention rates, consider overall movement in the industry if it is a high turnover sector and the ways that the company is mitigating that risk.
It can be appropriate to apply an impairment if the risk is especially high. An example of this is in micro-enterprises where the small number of employees can make any staff turnover high-risk. Another case is where a larger firm has a change in leadership which makes the company’s customers nervous.
It might seem that good remuneration is the key to reducing turnover, and I’d be lying to you if it wasn’t a large part of many people’s decision-making process, but it isn’t the only way. But lack of career development, poor company culture, lack of direction and work-life balance are also identified areas. So, the extra hours of sleep that a employee missed can be the tipping point!
You see how seriously we consider the impact of people on a company valuation — you can trust Athla to fully calculate the value of the people who make the business tick, even down to whether they are getting enough sleep…
Going back to year-end briefly, we know this is a very busy time for many people as they get things in line for a new tax year. Every year, we get to know someone who needs a last-minute valuation, and we rise to the challenge. So please get in touch with us if you have a client who really needs the job done!
