Revenue per Employee: A Human Resources Key Performance Indicator

Overview

Revenue per Employee is a significant Key Performance Indicator (KPI) in the Human Resources (HR) category. This KPI measures the average revenue generated by each employee of an organization, providing valuable insight into how efficiently a company utilizes its human capital.

It is essentially a productivity metric that correlates monetary output to the number of employees. By providing insights into the levels of efficiency across an organization, this KPI can serve as a key pointer for areas that might require improvements or changes.

Irrespective of the size or the industry of the organization, Revenue per Employee is a crucial KPI that can be used to benchmark performance against competitors or similar-sized enterprises in the same sector. Understanding this metric can pave the way for strategic decisions on hiring, resource allocation, and overall policy formulation.

Formula

The formula to calculate Revenue per Employee is straightforward and intuitive. It involves dividing the total revenue of your organization by the total number of employees.

Here is the formula for Revenue per Employee:

Revenue per Employee = Total Revenue / Total Number of Employees

In this formula:

• Total Revenue refers to the total monetary income that the organization has earned over a given period.
• Total Number of Employees is the total headcount in your organization during the same period.

Remember that while this formula provides a general measure of productivity, it does not account for different roles, responsibilities, and contributions of different employees or teams within an organization. Therefore, it should be used thoughtfully as part of an overall suite of HR metrics.