# Revenue per employee (RPE)

## What is revenue per employee?

Revenue per employee (RPE) is a way to measure how productive an organization's employees are. By tracking this metric on an ongoing basis, you'll be able to keep tabs on how each person contributes financially and improve collaboration within groups and departments.

## How do you calculate revenue per employee?

Revenue per employee is calculated by dividing revenue by the number of employees at the end of a given period, such as a quarter or year. The formula looks like this:

Revenue per employee

=

Revenue  ÷

Number of employees

For example, if your manufacturing company makes \$10 million in annual sales and has 100 full-time employees, this would mean an RPE of \$100k per employee (\$10m / 100). RPE is often used as a benchmark for comparing companies across different industries.

## What are the benefits of tracking revenue per employee?

If you're managing a maintenance team (or any team), revenue per employee is a metric that helps you understand how much revenue each employee generates. It's also an excellent way to gauge the effectiveness of your sales team, as well as whether you should be hiring more people or not.

If your organization has ten employees and brings in \$1 million in annual revenue, then each person brings in \$100k annually. But if only one person brought in all those dollars (and nine others were inactive), then there needs to be something fixed with either the culture or strategy of the company.

## What is a good revenue per employee?

A good revenue per employee is a sign that you're using your resources well and effectively. The average revenue per employee for companies in the United States is \$200k, but this number fluctuates depending on the industry and company size. A small business may have a lower revenue per employee than a large corporation because it has fewer employees to divide its total revenues amongst.

When deciding whether or not you should hire more people for your company, consider how much money each new hire would bring in as opposed to how much work they would do. If your current staff members are doing all the work themselves while bringing in only \$50k each year (or less), it might be worth hiring more people later.

## What is a bad revenue per employee?

A bad RPE is different from company to company. If your revenue per employee is too low, there are a few things that could be going on:

• Employee productivity could be higher. This could mean your employees need to do their best work or perform better to meet the job demands. If so, it's time for some coaching and leadership development. You may also need to hire new talent who can hit the ground running with more experience or skillset than what you currently have in-house. Either way, you must create an environment where people want to do good work.
• Employees are not motivated by their jobs (or lack thereof). Suppose employees need to be encouraged by what they do daily. In that case, there are two options for handling this situation: either find ways within existing structures so everyone feels like they're progressing towards something meaningful or consider restructuring roles/responsibilities, so each person has clear objectives tied directly back into company goals.

## Tips to improve revenue per employee

• Track revenue per employee
• Focus on the right metrics
• Use analytics to improve your business, not just vanity metrics
• Increase productivity and revenue using data-driven decision-making, not guesswork or intuition

## The key to revenue per employee is knowing how each member contributes

By tracking revenue per employee, you can get a clearer picture of which members are performing well and which ones need more attention. This also gives each team member more incentive to work hard because they know their contribution towards company goals.

## Empower your maintenance team

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