Revenue Per Employee

Description:

Employees are the most valuable asset for any organisation however their needs dictate that they are also likely to be the most expensive asset. The Revenue Per Employee (RPE) identifies the revenue derived from the number of employees as a ratio and is considered helpful to measure the overall efficiency of an organisation. In the case of an improving ratio of revenue to employee numbers, this suggests improved productivity when benchmarked against similar business type.

Calculation:

Usually calculated on a quarterly frequency – trends are identified over time and with reference to corresponding periods in previous years to accommodate cyclical/seasonal variation. Revenue Per Employee (RPE) = Revenue, divided by the number of full-time employees (Full-time equivalent)

Example:

Revenue per Employee will vary greatly dependent on the type of organisation. For example, a large consultancy agency will have a much higher RPE than a high street retail shop.