What’s Your Revenue per Employee?
We invest in different types of assets to generate revenues and profits. Financial assets like accounts receivable; physical assets like technology hardware, office equipment and inventory; and our most important asset -- human assets, which is our employees.
Revenue per Employee commonly is used to measure the productivity of human assets. A company with $10 million in revenue and 40 employees has $250,000 revenue per employee ($10,000,000 divided by 40 employees).
Revenue per employee provides powerful insights into important questions like:
- How many employees will be needed to support revenue goals?
- Is our employee productivity increasing over time?
- Compared to other companies do we have a competitive advantage?
- Are there opportunities for improvement?
The SmartSamantha Revenue per Employee SmartCard shows this important metric for a wide variety of industries. It shows that approximately $230,000 is the median revenue per employee. It also shows that this figure varies significantly across industries. We will explore in a series of SmartSamantha Bizdoms why revenue per employee varies by industry and how to use it to answer the four questions above.
So what’s your revenue per employee?
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