This post was originally published on On Deck
Revenue per employee (RPE) is a metric that businesses can use to measure the productivity and efficiency of their workforce. It is calculated simply by dividing overall revenue by the number of employees the company maintains.
RPE is not a perfect metric, as it can overlook the cultural impact and other intangible benefits of strong business health. However, it is a positive way to measure the benefits of the workforce by focusing on value rather than costs. And crucially, RPE also offers meaningful insights into a business’s efficiency over time by comparing figures across the year and over longer periods.
For example, construction procurement and engineering firm Quanta Services found that revenue increased twice as fast as headcount over a 15-year period of aggressive investment in “strategic people development initiatives” — vindicating what may, on paper, have looked like a costly policy.
There is no one-size-fits-all figure for a ‘good RPE.’ What’s more important is to track the performance of your own business’s RPE against itself and, where available, against peers and competitors in the same industry and under similar conditions. However, to illustrate the use and importance of the metric for business health, OnDeck has identified the U.S. and
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