Who's weathering the recession well?

PARN Global News Article - 11 May 2012

Who's weathering the recession well?

Who's weathering the recession well?

Report shows larger professional bodies faring better

According to our report Financial & Operating Ratios for Professional Bodies 2009/2010, there is a fairly consistent and positive relation between the size of professional bodies and income per member. For instance:

  • Less than £1M turnover: £231 income per member on average
  • £1-10M turnover: £430 income per member on average
  • Above £10M turnover: £929 income per member on average

This either indicates a higher fee subscription rate or more alternative sources of income for larger professional bodies – such as education/training/CPD provision, investment/interest, events and publications. The chart below shows how the alternative income sources explanation is particularly pertinent for the largest professional bodies.

Income from member subscriptions as % of total income

Success of larger professional bodies in dealing with the recession is also reflected in their profitability with the above three groups achieving profit to income of respectively: -1%; 1% and 4% on average.

However this relationship has not always held. It reflects the recession in that the reserves to expenditure ratio shows middle sized professional bodies to be healthier if reserves standardised on expenditure levels is considered. The middle level professional bodies have reserves equal to 12.5 months of expenditure on average, compared with the largest professional bodies at 7.6 months and the smallest ones at 7.9 months.

Additional Information...

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