From total revenue and headcount, compute the average revenue each employee generates, measuring team productivity.
Input Data
Results
At a glance:Revenue per employee is total revenue divided by headcount, indicating average productivity per worker.
Formula
revenuePerEmployee = totalRevenue / employees
How to Use
- Enter the total revenue.
- Enter the number of employees (FTE).
- Read the revenue per employee.
FAQ
Is a higher revenue per employee always better?
Generally a higher figure means better productivity per head, but do not read this alone. It reflects revenue only, not cost or profit. Cutting headcount to lift the ratio could hurt service quality and long-term growth. Read it together with profit per employee and the payroll-to-revenue ratio.
Can I compare across industries?
Not recommended. Industry structures differ hugely: asset-light sectors such as technology and finance tend to have very high revenue per employee, while labour-intensive sectors like catering, retail and cleaning are naturally lower. Cross-industry comparison is misleading; the useful comparisons are against your own trend and peers in the same industry.
How should I count the number of employees?
Use average full-time equivalents (FTE): a full-timer counts as 1, part-timers are converted by hours worked (e.g. a half-timer as 0.5), and take the period average rather than a single-day snapshot. That keeps the figure from being distorted by part-timer mix or headcount swings. Example: 20 full-timers plus 10 half-timers = 25 FTE; using a headcount of 30 would understate the ratio.
What is the difference between revenue per employee and profit per employee — which should I watch?
They measure different things and are best seen together. Revenue per employee = total revenue ÷ headcount — it shows the scale and productivity of each worker but ignores costs, so high revenue does not mean profit. Profit per employee = net profit ÷ headcount — it shows the true earning power after all costs. Two firms with the same revenue per employee of HK$1m but one at HK$200k and the other at HK$30k profit per employee tell very different stories. Practically: watch revenue per employee for scale and productivity trends, then profit per employee to confirm the revenue is actually converted to profit; if revenue per employee rises but profit per employee stalls, beware of chasing revenue at the expense of margin.
Does a low revenue per employee mean I should lay people off?
Not necessarily — hasty layoffs are often a misjudgement. A low ratio has many causes; find the reason before acting. It may be an expansion or investment phase (headcount arrives before revenue catches up — normal, and layoffs would kill future growth); a process or tooling-efficiency issue (fix the workflow or automate rather than cut); or a revenue-side problem (low pricing, weak conversion, churn — fix revenue, not headcount). Only if overstaffing or misallocation is confirmed should you consider redeployment, retraining or slower hiring. Any actual redundancy must follow Hong Kong's Employment Ordinance on severance and notice pay. Treat the ratio as a signal to investigate, not a headcount answer.
Content review: Calculatorism Finance Team. Results are for reference only; please refer to the relevant authorities for the official figures.