This ratio is most useful when comparing it against other companies in the same. This statistic depicts the average annual revenue per employee of professional services within software as a service saas companies. One of the best metrics to track efficiency is revenue per employee. Top tech companies revenue per employee business insider. May 24, 2017 technology companies performed at the lower end of the range on revenue per employee. Middle market companies also report monthly travel card spending per. Crest saas company survey benchmarks, the median saas revenue per employee is. Other companies may put marketing employee expenses into general and administrative expenses, sales, or other areas. Jun 23, 2016 the last of the top six strategic benchmarks is operating expense breakdown. Here are some charts on some big name tech companies. This ratio is most useful when comparing it against other companies in. Sector ranking best performing sectors by revenue per employee include every company. Barclays raimo lenschow and saket kalia take a look at the software sector, investigating average revenue per employee rpe across their coverage, and what it might say about the relative. Which companies make the most revenue per employee.
Revenue per employee charts are a fascinating way to judge the health of tech companies. It spending and staffing benchmarks 20192020it budget. We found that energy companies have the highest average revenue per employee, while industrials and consumer discretionaries perform worst on this. It spending as a percentage of revenue by industry, company. Midsized companies have the highest monthly transactions per card 9. It indicates that the company is achieving economies of scale. Average revenue per employee of professional services within software as a service saas companies worldwide from 2015 to 2019 in 1,000 u. The arr per fte metric is not a metric youll use to pilot your business. Benchmarking saas startup efficiency with revenue per. View revenue per employee annual for intc access over 100 stock metrics like beta, evebitda, pe10, free cash flow yield, kz index and cash conversion cycle. The chart of the week is a weekly visual capitalist feature on fridays.
Revenue per employee earlystage companies typically have very low revenueemployee. Revenue per employee of leading tech companies 2018 statista. And since it is based on accounting conventions, companies can easily benchmark it against the comparable results of competitors and other companies. Analysts at expert market dug through data on the top 100 companies in the world in terms of revenue, and showed us how much each makes per employee. Only, outside the budget, its difficult to assess the overall efficiency. Also public companies which have huge revenues pad this number by having 50100150% of their ftes as contractors, i. Revenue per employee charts are a fascinating way to judge. Profit per employee therefore focuses companies on intangibleintensive value propositions and, in turn, on talented peoplethose who, with some investment, can produce valuable intangibles. How many employees does a saas company have at 100m arr. Revenue per employee total ranking has deteriorated compare to previous quarter from to 2. Its also a composite metric that is negatively impacted by significant waves of hiring, sales team ramp time, product and company maturity in a. Latka calculates revenue per employee by taking a company revenue in a given month, multiplying by 12 annual run rate and then dividing by total team size at the time. According to the 2016 pacific crest saas company survey.
Also public companies which have huge revenues pad this number by having 50100150% of their ftes as. That left 11 software companies and 1 ecommerce company also in our portfolio. One recent study in the technology industry software, hardware, it services, etc found that the top 10% of companies ranked. Putting profit per employee in action for results forbes. Percentage of workforce dedicated to new product development. May 23, 2017 the softletter benchmark 53 are all publiclyheld companies and most of our basic business metrics are derived from documents these companies are legally required to provide to investors. To get a more complete picture, it is advisable to use other ratios as well, as shown in figure 1. The only performance goal youll ever need for hr leaders. Dec 14, 2010 5 metrics every software ceo should obsess over. Preparing a benchmark for it spending or it employee staffing levels can be a difficult exercise for any business. One way of measuring the efficiency of a company s revenue model is to benchmark revenue per employee. Comparing one set of numbers to another yields ratios that provide valuable insight. Your industry has a benchmark that you can get from others in your industry or from one of the cfowise partners business dashboards. This metric allows for the analysis of a company s revenues and growth at a per user level, and on an individual basis, can be used to segment profitable from unprofitable customers.
Pharmaceutical commercials begin to be more interesting. What is average revenue per employee for software companies. Revenue per employee has been steadily increasing in saas companies. Dec 19, 2016 putting profit per employee in action for results. It spending per employee, per user, and per desktop pc. Healthcare sector efficiency, revenue per employee, inventory. Insightsquared revenue per employee has been steadily increasing in saas companies. One mistake that it leaders make in benchmarking their it spending levels is only to look at their it budgets as a percentage of revenue. Mar 16, 2011 the ranking shows the revenue per employee of major it services vendors worldwide. Digging into the cost structure of a company always reveals insights and opportunities. Netflix was the most effective company, generating over 2. But when you calculate the ratio of finance team members.
Technology companies performed at the lower end of the range on revenue per employee. The softletter benchmark 53 are all publiclyheld companies and most of our basic business metrics are derived from documents these companies are legally required to provide to. Aug 24, 20 the most common quantitative measures to determine if you have the right number of employees are revenue per employee benchmarks. The number of people it takes to keep the finance wheel in continuous motion can vary widely from organization to organization. Revenue per employee screening, rankings of best performing. Revenue per employee calculation may combine companies, who have reported financial results in different quarters. It results from your business performance and is generally used by investors or acquirers to benchmark. Guesstimate of revenue per employee in small company space in. Companies by revenue per employee marginal revolution. Worldclass performance benchmarks new products as a percentage of total skus launched annually. Revenue per employee benchmarks of billion dollar companies. If we look at the 8 companies that are fairly large in terms of employee size and revenue, their contribution to employment and revenue generation 5 are as follows. Nov 01, 2018 the average quick ratio of fastest growing saas companies those with a cagr of over 50% is 3. However, does revenue per employee translate into bottom line performance.
Now its often closer to, with unicorns raising so much more. Revenue per employee is an important financial ratio calculated by dividing revenues. How software companies revenues per employee stack up barrons. With this kind of scale, every action taken by an employee packs an extra punch to have an effect on company performance. Healthcare sector efficiency, revenue per employee. Benchmarking your industry interestingly, smaller firms, which you. Feb 14, 2020 the sales per employee ratio can be especially insightful when measuring the efficiency of businesses such as banks, retailers, consultants, software companies, and media groups. How software companies revenues per employee stack up. Dive into the complete list of saas business stats and benchmarks. Jun 15, 2017 which companies make the most revenue per employee. May 03, 2019 revenue per employee is a ratio that is calculated as companys revenue divided by the current number of employees. It serves as a great measuring stick to understand the increasing or. To see the complete softletter revenue per employee 2017 analysis, please subscribe to softletter. One recent study in the technology industry software, hardware, it services, etc found that the top 10% of companies ranked by performance had roughly twice the revenues per employee as the average.
There are dozens of financial indicators that the industry is improving slowly but steadily, and this report will help firm leaders assess the. Whether the goal is to organize the worlds information or to build an algorithm that makes millions of lives easier, pretty much every tech company in existence aims to leverage software in some way to do the types of jobs that would otherwise be impossible or uneconomical for humans to do. Which companies have the highest revenue per employee. Traditional software companies typically focus their business. Publiclytraded saas companies have an average revenue per. This statistic shows the revenue per employee of selected tech companies in 2018. Theres an old business maxim that goes where performance is. This metric allows for the analysis of a companys revenues and growth at a per user level, and on an individual basis, can be used to segment profitable from unprofitable customers.
The ranking shows the revenue per employee of major it services vendors worldwide. It spending and staffing benchmarks 20192020it budget and. Guesstimate of revenue per employee in small company space. Our it spending and staffing benchmarks study makes the job easier by providing an it spending framework with hundreds of ratios, statistics, and other it cost metrics for strategic it budget analytics. You also realize the way you do it isnt the only way it can or should be done. Revenue per employee is a ratio that is calculated as companys revenue divided by the current number of employees.
On average, companies in the energy sector make at least 2x per employee than others. Note, forth quarter numbers include only companies who have reported. This is a limited sample size but it gives you some datapoints for revenue per employee benchmarks when. Sector ranking best performing sectors by revenue per employee include every company within the sector. Publiclytraded saas companies have an average revenue per employee of. Rpu or revenue per subscriber is a measure of the revenue generated per subscriber. The most common quantitative measures to determine if you have the right number of employees are revenue per employee benchmarks. The top 6 strategic benchmarks to measure company performance. Revenue per employee benchmarks of billion dollar companies one way of measuring the efficiency of a companys revenue model is to benchmark revenue per employee. Whether the goal is to organize the worlds information or to build an algorithm that makes millions of lives easier, pretty much every tech. What is the typical revenue per employee for a b2b saas. While the benchmarking analysis is typically straightforward, it usually takes the most time, given the mapping of a companys general ledger categories to the benchmarking.
Our it spending and staffing benchmarks study makes the job easier by providing an it. Revenue per employee is the ratio of revenue generated per employee of a company on an average. But not all private software and saas companies are on the path to become the next unicorns. Revenue per employee earlystage companies typically have very low. Revenue per employee 2017, the softletter benchmark 53. Sep 06, 2019 this statistic shows the revenue per employee of selected tech companies in 2018. The salesperemployee ratio can be especially insightful when measuring the efficiency of businesses such as banks, retailers, consultants, software companies, and media groups.