Revenue per employee is an important benchmarking metric used by businesses to evaluate employee productivity. With Artificial Intelligence (AI) changing the shape and size of the workforce, this metric has become increasingly popular to track and manage in 2025.
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How much revenue each employee produces can vary across industries, shaped by workforce composition, technology and automation, and operational efficiency. In this blog, we will cover:
Revenue per employee measures the average amount of revenue a company generates for each of its employees. There are two inputs required to calculate this metric: (a) annual revenue, and (b) the average number of employees for the same period. The metric is then calculated by dividing the company's annual revenue by the total number of employees.
This information can usually be obtained from statutory reports (including financial statements), company websites, or press releases. It is important that these figures are for the same period and the number of employees include everyone, not just full-time employees. Once you have sourced these two figures, then you just need to perform the calculation shown above.
The revenue per employee ratio is a useful measure for evaluating the productivity of a company’s workforce. By analyzing this metric, you can gain insights into how efficiently a company is utilizing its human resources, identify areas where workforce performance could be improved, and compare productivity against industry benchmarks.
It is one of a few key performance indicators used by management teams to get a sense of the value each employee contributes to the business. Now let's dig a bit deeper to understand why revenue per employee is important for businesses in 2025.
Companies track revenue per employee for many reasons, but at its core, this metric provides a simple way to compare performance against peers in the same industry. By looking at how much revenue each employee generates, organizations can quickly gauge efficiency, spot opportunities for improvement, and better understand their competitive position.
Revenue per employee has become increasingly important with the rise of AI, which is driving the biggest workforce shift since the industrial revolution. With the adoption of AI, many companies are becoming more efficient, directly reflected in a higher average revenue per employee across various industries.
For example, we are already seeing this with the Software industry average revenue per employee increasing 27%, from $228,000 in 2023, to $290,000 in 2024 (CompanySights data).
Another reason to track revenue per employee is to drive new growth initiatives. By understanding and optimizing for this metric, companies can increase their total revenue without necessarily having to hire more employees - Benchmark your revenue per employee here.
Businesses can go even further and assess revenue per employee for a specific function, known as functional benchmarking. This next level down can help to identify departments where the business may need to improve their operations in order to remain competitive.
A good revenue per employee ratio can vary significantly based on a range of factors, such as the industry, company size, location, and business model. For example, an accounting firm may have a lower revenue per employee than a software company, but this does not necessarily mean that the accounting firm is less productive.
With those variables in mind, the high-level benchmark for a good revenue per employee is between $200,000 and $500,000. In fact, the average revenue per employee across all industries in 2024 was $350,000. However, it's crucial to keep in mind that these are general figures and what is considered "good" can vary based on regional and industry specific factors.
Access benchmarks for your industry, size, and location
At CompanySights, we turn company data into reliable benchmarks that help business leaders to make better workforce decisions. Here are the latest average revenue per employee benchmarks:
Now that you are equipped with the benchmarks, it's time to consider some of the ways to improve the amount of revenue that an employee generates.
Looking for revenue per employee benchmarks based on your industry and business size? Start your search here
There are many ways to increase revenue per employee. It comes down to either: (a) generating more revenue with the same number of employees, or (b) reducing the average number of employees while maintaining the same amount of revenue. Here are 10 ways to do it:
Technology is the single biggest enabler for increasing output. Use it to automate certain workflows, which will both improve productivity and reduce operational costs. Through the automation of repetitive processes, employees can do more work in the same amount of time. It also frees them up to focus on more strategic tasks, leading to higher revenue generation.
Invest in training and development programs to enhance the skills of existing staff. Talented employees are often more productive, provide better customer service, and contribute to innovative solutions that drive increased sales and revenue.
Design incentive programs that reward employees for beating revenue targets and increasing profit margins. Recognizing and rewarding top performers can boost motivation and encourage others to excel, ultimately leading to increased revenue generation.
Focusing on customer satisfaction and building strong relationships with clients can lead to repeat business and positive word-of-mouth referrals. Satisfied customers are more likely to make repeat purchases and become brand advocates, increasing revenue over time.
Diversification can be either geographical (e.g. doing the same thing in new markets) or adding new products or services. Assess market demands and identify opportunities to expand into complementary or new markets to generate additional streams of revenue.
This is similar to item #1 where management look to streamline processes using technology wherever possible to reduce the need for manual labor. By supplementing human capital with technology, remaining staff can handle more work, which will increase revenue per employee.
Consider outsourcing certain tasks or projects to external vendors or hiring freelancers, especially in areas where there is low productivity. This approach will allow your company to access specialized skills without the overhead costs of full-time employees. It also provides greater flexibility when it comes to adjusting the size of your workforce.
Similar to item #2, training your workforce to have multiple skill sets and be adaptable can drive up the average value of an employee. This flexibility ensures that even with reduced headcount, various functions can still be carried out, thus maintaining productivity and revenue levels.
Similar to item #3, management can implement a performance based evaluation system that rewards employees for their productivity and contributions. Offer incentives and bonuses tied to individual and team performance, motivating employees to be more productive.
Identify the most profitable revenue generating activities within the company and concentrate resources in these areas. By prioritizing high value activities and allocating resources accordingly, the company can sustain revenue levels with a leaner workforce.
This list of 10 ways to increase the company's revenue per employee is just the tip of the iceberg. Initiatives are usually business specific, depending on the company's net income, employee turnover, and future growth opportunities.
Revenue per employee is common metric designed to evaluate organizational performance in business. It is a relatively straightforward formula, where you first need to get the annual revenue then divide it by the total number of employees (a.k.a. human capital).
The average amount of revenue per employee in a company is approximately between $200,000 and $500,000. This range is not one-size-fits-all and can vary considerably between industries.
Compare your revenue per employee to benchmarks
Now that you are equipped with the right benchmarks, you can easily identify areas to improve efficiency in any business. Initiatives can include, but are not limited to increased process automation, further training and development, and product or service diversification.
Generally speaking, the success of these strategies depends on careful planning, execution, and ongoing monitoring. It's essential to align these efforts with the company's overall objectives and ensure that employees are engaged and equipped to contribute to the business's growth.
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