Revenue Per Employee Calculator

Created by Wei Bin Loo
Reviewed by Tibor Pal, PhD candidate and Adena Benn
Last updated: May 01, 2022

We have built our revenue per employee calculator to help you calculate the amount of money that each employee generates for the company on average. In other words, the average revenue per employee can help you analyze the company's recruitment and operational efficiency.

This article will explain what average revenue per employee is and how to calculate revenue per employee. Moreover, we will help you understand the concept by showing practical calculation examples.

What is revenue per employee?

Revenue per employee is a commonly used metric to analyze a company's recruitment and operational efficiency. The higher the revenue per employee, the more money each company employee can generate for the company. In other words, each employee is more valuable to the company.

Hence, if a company has low revenue per employee, many employees are disposable or easily replaceable. Netflix has the highest revenue per employee, while Apple has the second highest. Netflix has an average revenue per employee of $2.34 million, and Apple has a $1.9 million average revenue per employee.

How to calculate revenue per employee?

To understand the calculation of revenue per employee, let's look at Company Alpha with the following information as an example:

  • Company name: Company Alpha
  • Revenue: $2,000,000
  • Number of employees: 10,000

You can calculate the revenue per employee in three steps:

  1. Determine the revenue of the company

The first step is to determine the revenue of the company. For our example, Company Alpha's revenue is $2,000,000.

  1. Determine the number of employees in the company

Next, we need to know how many people the company hires. The number of employees in Company Alpha is 10,000.

  1. Calculate the revenue per employee

The last step is to calculate the revenue per employee for the company. We can calculate this using the formula below:

revenue per employee = revenue / number of employees

For this example, the Company Alpha's revenue per employee is $2,000,000 / 10,000 = $200.

Understanding revenue per employee benchmark

Now that we understand what revenue per employee is let's talk about how we can interpret this metric.

In general, the higher the revenue per employee, the better. This is because a higher revenue per employee indicates that a company can generate more money for each person it hires.

However, there is a caveat in comparing revenue per employee by industry. Different industries have different dynamics, it is dangerous to use this metric on companies in various industries. Hence, the best way to utilize this metric is to create a revenue per employee benchmark for each industry and compare the revenue per employee by industry. You can take a look at the table below.

Industry

Average revenue per employee

Energy

$1.79 million

Healthcare

$0.89 million

Utilities

$0.81 million

Consumer staples

$0.69 million

Financial

$0.65 million

Telecom

$0.61 million

Materials

$0.60 million

Technology

$0.48 million

Consumer discretionary

$0.42 million

Industrial

$0.32 million

FAQ

How do I calculate the revenue per employee?

You can calculate the revenue per employee in three steps:

  1. Determine the revenue of the company.
  2. Determine the number of employees in the company.
  3. Apply the revenue per employee formula: revenue per employee = revenue/number of employees.

Can revenue per employee be negative?

No, mathematically speaking, the revenue per employee cannot be negative. This is because both the revenue and the number of employees cannot be negative.

What is revenue?

Revenue is the total amount of money earned by a business through selling its service or good, before deducting any costs. It is often referred to as the top line for a business.

Which company has the highest revenue per employee?

Netflix was the company with the highest revenue per employee in 2019. It generates more than $2.34 million of revenue per employee.

Wei Bin Loo
Revenue
$
Number of employee
Revenue per employee
$
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