Revenue Per Employee
Benchmark your business productivity. This ratio helps you understand how effectively your organization is utilizing its human capital to drive top-line growth.
What is revenue per employee?
Revenue per employee is a efficiency ratio that measures how much revenue a company generates for each person it employs. It is a key indicator of productivity.
How do I calculate revenue per employee?
Divide the total revenue of the company over a specific period (usually a year) by the average number of full-time equivalent (FTE) employees during that same period.
What is a good revenue per employee ratio?
This varies wildly by industry. For example, high-margin software companies (like Apple or Microsoft) often have over $1 million per employee, while labor-intensive service or retail businesses might have $50,000 to $150,000.
How can I improve this ratio?
Companies can improve this ratio by increasing revenue through better sales or pricing, or by improving operational efficiency so they can generate the same revenue with fewer staff.