Business Glossary
What Is Revenue Per Employee?
Revenue per employee measures workforce productivity by dividing annual revenue by full-time equivalent staff. Within a sector, it is a useful benchmark for operational efficiency and whether headcount is appropriate for revenue.
The Formula
Revenue Per Employee = Annual Revenue ÷ Number of FTE Employees
Worked Example — UK SME
A UK distribution business: £1.2m revenue, 14 FTE employees. Revenue per employee = £85,714. Within the typical UK distribution range of £70,000–£130,000 per employee.
UK Benchmark
📊 UK benchmarks (revenue per FTE): Software £150k–£400k, Professional services £80k–£180k, Distribution £70k–£130k, Manufacturing £60k–£120k, Retail £90k–£200k, Hospitality £30k–£60k.
Common Questions
How do I use revenue per employee to benchmark?
Compare against your sector range. Significantly below benchmark suggests either a revenue problem or too many people for your revenue level.
What is profit per employee?
More meaningful: net profit ÷ FTE headcount. Adjusts for margin differences. A business generating £100k revenue per employee at 5% margin gives £5k profit per head.
How do I improve revenue per employee?
Grow revenue without adding headcount, or optimise headcount to match revenue. The most sustainable improvements come from operational leverage.
Related terms