Let's agree that
1) Employees are our greatest assets.
2) Employees are also the most expensive assets.
Tracking Revenue per Employee (RPE) and similar KPIs will help shine some light on these statements.
So, what questions does this KPI answer?
1) How much does each employee generate?
2) How productive are the employees?
3) How is this Revenue per Employee compared to a similar industry?
And, why is this so important?
Because the highest cost to any company is usually its employee’s salaries. RPE shows how efficiently the employees are being utilised and thus how productive the company is in maximising revenue per employee. To be valuable, this measure should be tracked over time and benchmarked against other similar companies in the industry.
Where to source this data from?
Usually, this information can be located in Accounting and Finance systems, e.g. Xero, Dynamics 365, Myob, Wiise, etc.
This information is typically easy to collect. For more effectiveness, similar KPIs should be used with RPE are NET Income per Employee and Sales per Employee.
KPI Target
The higher the revenue per employee, the better as it usually translates to higher profits.
KPI Formula
RPE = Total Revenue / Total Number of Employees
