What Does Revenue Per Employee Measure

Revenue per employee is a measure of how efficiently a particular company is utilizing its employees.

What does revenue per employee measure. The revenue per employee ratio is important for determining the efficiency and productivity of the average employee of a company. 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. In other words this metric assesses how well a company is able to leverage its manpower in order to make more revenue. To calculate a company s revenue per employee divide the company s total.

Revenue per employee formula. The term revenue per employee rpe ratio refers to the financial metric that measures the dollar amount generated by each employee of a company. It helps as a measure of average financial productivity for each employee of the company. It equals the company s total revenue divided by the average number of employees for the period.

Revenue per employee is an essential financial ratio calculated by dividing revenues generated for a specific period by the number of employees in a company.