Revenue Per Employee Meaning

Analysts often compare revenue per employee of different companies in the same industry to measure productivity.

Revenue per employee meaning. If a company employs 50 people and has a revenue of 7 5m annually their revenue per employee ratio is 150 000 on an annual basis. Companies seek to have the highest possible revenue per employee. In general relatively high revenue per employee is a positive sign that suggests the company is finding ways to squeeze more sales revenue out of each of its workers. This is for us based agencies.

Companies use the formula total revenue total number of employees to determine the revenue per employee. 200 000 per employee is a solid target for digital agencies 250 000 300 000 is d. Where a company employs a high proportion of part time workers employee numbers may need to be adjusted to full time equivalent numbers to assist comparability. If they begin working on a new product line and hire an additional 25 employees based on the same revenue their revenue per employee ratio will be 100 000 annually.

Revenue per employee is an efficiency ratio used to determine the revenue generated per individual working at a company. Revenue per employee is the calculation used to determine how productive employees are in a business. The revenue per employee ratio is important for determining the efficiency and productivity of the average employee of a company. I founded a 85 person digital agency and we re 10 years in to building the business and have recently sold it to wpp.

Revenue of 1 1 million per employee. This formula indicates how productive each employee is in generating revenues for the company. Example 4 banking industry. Revenue per employee is a measure of how efficiently a particular company is utilizing its employees.

Fiat on the other hand makes around 538 122 per employee. In general the top tech company s revenue per employee is more than the manufacturing companies revenue per employee. Profit per employee an accounting ratio which expresses a firm s profit as a proportion of its size measured in terms of numbers of employees.