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Knowledge Management

Knowledge Management
Abracadabra – Human Capital Audit
Background
Abracadabra is a small training company established in 2008. It delivers training and coaching primarily to the corporate sector throughout Europe.
There are two Directors: Alena (who generally deals with clients and marketing) and Benny (who manages the staff and the delivery of the services).
In addition, there are five other administrative staff:
•    Cookie, the sales manager
•    Deepika, responsible for scheduling and project administration
•    Emilia, the accountant
•    Fernando, responsible for technology and infrastructure
•    Gerry, the ‘factotum’, who does anything / everything else required (eg: travel arrangements, photocopying etc)
Trainers / consultants are employed on a daily basis at a daily rate, depending on the project requested by the client. There is a database of 50 such trainers/consultants.
You have been invited to work with Abracadabra for a few months as an intern. One of the tasks you have been given is to assess the Human Capital of the company and make any recommendations you see fit ….
Information provided by Emilia
In reply to your questions, Emilia the accountant provides you with the following information:
Item    Euros / Number    Comments
Average salary for admin staff    €25,000    Per year each. Excludes Social security of 20%
Average paid to Directors    €50,000    Per year each. They seldom do any training / consultancy themselves except in emergencies
Average paid to Trainers/Consultants    €500    Per day, excluding preparation and travel
Average paid for preparation / travel days to trainers    200    Per day. Preparation is calculated at ½ day per full day’s training. ‘Travel’ is for any project outside the home city, and trainers are paid one day on each side of a delivery project.
Average fee charged per day’s training / consultancy    €1,000    Preparation is included in this price, but travel is invoiced separately / additionally
Number of training days sold last year    3,000    These were the actual days invoiced to clients
Number of travel / preparation days    800    Days in addition to the training days
Rental payments on the building, equipment, IT etc     €500,000    The fixed overheads
Additional running costs    €200,000    Covers variable costs (of projects), such as marketing, photocopying, books etc
Training staff turnover    10    New staff recruited per year to replace leavers or add to the database
Admin staff turnover    2    Per year – there have been 5 admin staff and it is not expected to increase this number
Corporate Tax    20%    On profits
Questions arising
1.    What other information might you require to conduct your audit?
2.    What are the total costs of employment?
3.    What is the HEVA?
4.    What recommendations would you make? Why?
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