What does Monthly Revenue Per Employee mean?

This metric helps you estimate how much revenue your company makes per employee. This can give you a general sense of the efficiency of your business model and your specific company.

How it's calculated

This metric takes the average monthly revenue and divides it by the average head count (that is, the number of full-time-equivalent employees and contract workers) for the selected period.

What's better?

Higher

What it means

This metric helps you estimate how much revenue your company makes per employee. This can give you a general sense of the efficiency of your business model and your specific company.

If your company’s revenue is high with just a handful of employees, then your revenue per employee will be high. Imagine a company that develops a smartphone app to sell online, for example. On the other hand, if your business requires employees to physically stock and sell products, you’ll need more employees, and your revenue per employee will probably be lower.

On the efficiency front, your revenue per employee might also be low if you’re doing a poor job of managing your costs or expenses. Or maybe you’re still paying field salespeople when your competitors are doing no-touch sales on their website. Others with the same business model may be more or less efficient because of a variety of factors, including the quality of their workers, oversight, processes, or equipment.

 

(Source: LivePlan.com)