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What is Revenue Per Employee?

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Revenue per employee is calculated as total revenue divided by number of employees. It is a basic measure of the productivity of an economy, industry or organization. Revenue per employee is impacted by several factors:

Allocative Efficiency

A business strategy that allocates employees to productive things. For example, a failed project has a negative impact on revenue per employee.

Technical Efficiency

Generally speaking, inflation adjusted revenue per employee increases over time due to technological improvements such as automation of labor intensive work.


Economies of scale tend to improve revenue per employee. A firm producing a million bicycles a month typically has higher revenue per employee than a firm producing a thousand bicycles a month.


The overall productivity of workers. For example, a small startup may be extremely productive as employees focus on launching new products and features. A large organization may be less productive due to factors such as office politics and the overhead of communicating in a complex organization.
Overview: Revenue Per Employee
A basic measure of the productivity of an economy, industry or firm calculated as revenue / number of employees.
Related Concepts

Business Metrics

This is the complete list of articles we have written about business metrics.
Attach Rate
Budget Variance
Capability Rate
Churn Rate
Compliance Rate
Cost Effectiveness
Customer Satisfaction Rate
Cycle Time
Error Rate
Gross Margin
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Marketing Metrics
On-Time Performance
Run Rate
Sales Metrics
Sales Volume
Share Of Wallet
Story Points
Takt Time
Time To Market
Time To Volume
Turnaround Time
Vanity Metrics
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