Revenue per employee: A quick metric with big insight
When it comes to team performance and staffing decisions, one number can offer surprising clarity: Revenue Per Employee (RPE).
Let’s say your business brought in $1 million in gross revenue last year and you had five full-time employees. Your RPE would be $200,000.
Why does this matter?
Because it’s one of the fastest ways to assess:
How efficiently your team is operating
Whether you might be over- or understaffed
When it could be time to hire, or press pause
Real-world example: Turning data into direction
One of our SaaS clients came to us for fractional CFO support while generating about $1.8M annually with 12 full-time employees. Their RPE was $150,000.
At a recent mastermind, they learned the average for similar companies was closer to $220,000 per employee. The comparison left them uneasy and unsure of what to do next.
Over the next few months, one of our virtual CFOs worked with their leadership team to dig deeper. We:
Pulled departmental-level data
Reviewed time allocation and performance metrics
Analyzed cost per function vs. revenue contribution
What we found: Several roles had overlapping responsibilities, and some key team members were underutilized.
Rather than moving forward with two planned hires, they opted to restructure their team and streamline processes.
The results?
No layoffs
No 70-hour weeks
Higher profit margins
Less stress all around
Try it in your business
You don’t need a full CFO review to start seeing insights.
Take your total annual revenue
Divide it by the number of full-time employees
Compare it to last year’s figure
Then ask:
Are we doing more with the same team, or less with more?
Small shifts in how you assign and support your team can make a big difference in both profitability and peace of mind.
Thinking about expanding your team?
Before you make your next hire, read this: When Small Business Owners Ask “When Can I Hire?” - How to Know If You Can Afford Your Next Hire