Margin / base / 1 to 3 months
Total labor (payroll + contractors) is consuming too large a share of revenue, and the trajectory is worsening. S14 uses payroll growth rate projections and scenario analysis (hiring freeze impact, payroll cliff timing, revenue-per-FTE trajectory) to assess where labor costs are heading, not just where they are today. For the point-in-time measurement, see S36.
Top-performing PS firms keep total labor at [redacted] to [redacted]% of revenue (SPI Research [redacted]). At [redacted]%, only [redacted] cents per revenue dollar remains for all other costs plus profit. At [redacted]%, the business is operationally insolvent.
Exact thresholds, formulas, and severity bands are omitted from this public view. The full methodology, with every figure, is available in the authenticated app.
Operating leverage is negative — labor is scaling faster than revenue. A hiring freeze would extend runway by ~[redacted] months. Contractor optimization could save ~[redacted]/mo.
The exact thresholds, the formula, and your own figures are in the authenticated app. See it against a real, simulated dataset for Integra Executive Services, our public demo company, or connect your own QuickBooks Online account.