A third factor in determining a fair profit percentage is risk. Risk is divided into two types. The first is insurable and the second is uninsurable risks. Insurable risks are mitigated and have very little to no effect on the profit formula due to transferring the risk to a third party known as the insurance underwriter. Uninsurable risks are non-transferable and therefore the profit must be adjusted to compensate for this type of risk.
When employees are secure in their job, their performance and loyalty increases and the company creates a better overall product and/or service for the customer. Monthly or quarterly newsletters, regular posting of notices to employees, and training provide reassurance to staff that the company cares and is doing well. One of the three primary goals of all for profit companies is providing security to employees.