Revenue per employee
How much revenue the business produces for each full-time equivalent employee.
01 What it is
Why anyone looks at this number
How much revenue the business produces for each full-time equivalent employee.
It is the simplest productivity measure there is, and the one investors reach for first when comparing two companies in the same sector.
02 The formula
How it is worked out
Revenue per employee = net_revenue ÷ average_fte grain : year × entity × function unit : currency per FTE source : General ledger and the HR system
Decide whether contractors count. A business that outsources heavily will look twice as productive as one that employs the same people, unless the definition includes both.
03 Worked example
The same number, with real inputs
| Net revenue | €50.0m |
| Average FTE | 265 |
| Calculation | 50.0m ÷ 265 |
| Result | €188,700 |
Up 6% on last year, but revenue rose 9.6% and 4 points of that was price. Real productivity barely moved.
04 What moves it
Four things that actually change this number
Automation
Work removed rather than redistributed.
Mix of business
Services-heavy revenue needs more people per euro than product revenue.
Outsourcing
Moves cost from headcount to suppliers without changing the work.
Pricing
A price rise raises this metric without anyone becoming more productive.
05 Where the number lives
The system, the record and the fields
| System of record | Key record | Fields you need |
|---|---|---|
| General ledger and the HR system | Company code joined to Position / Employee | net_revenue, headcount, fte_factor, contractor_flag |
Decide whether contractors count. A business that outsources heavily will look twice as productive as one that employs the same people, unless the definition includes both.
06 How it goes wrong
Three ways this metric misleads people
Excluding contractors
Headcount falls, the metric improves, and nothing has changed.
Fix: Include all FTE-equivalent labour and say so.Comparing across sectors
A trading business and a manufacturer are not comparable on this measure at all.
Fix: Compare within sector and against your own trend.Reading price rises as productivity
Revenue-based measures move with price.
Fix: Show it in constant prices, or use gross profit per employee.08 Questions
Frequently asked
Is gross profit per employee better?
Usually, yes. It removes the effect of pass-through revenue and of price, which makes it a fairer read on what people actually add.
How do we handle part-time staff?
Convert to full-time equivalents using contracted hours, and state the convention. Headcount and FTE can differ by 15% or more in a shift-based business.
One definition, everywhere it is used
SCIKIQ stores this metric once and serves it to every dashboard, board pack and agent that asks.