What is revenue per employee?
The average revenue or profit generated per employee.
In detail
A common calculation is: operating revenue (or profit) ÷ average number of employees. It reflects the efficiency of the whole organization, not just whether individual employees work hard enough. Processes, tools and division of labor all affect it.
For example
Last year a company had revenue of RMB 50 million with an average of 50 people, so revenue per employee was RMB 1 million. This year, after introducing a new system, the same 50 people reached RMB 60 million, raising it to RMB 1.2 million per person.
How companies use it
Compare with peers and with your own history; look at it by department to find which processes or tools can still be improved.
Common misconceptions
Equating higher revenue per employee with layoffs or overtime. A more sustainable approach is to reduce repetitive work and optimize processes so the same people create more value.
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