Revenue per Employee
Total revenue divided by headcount, a rough gauge of workforce productivity and how labor-leveraged a business model is.
The fork, why two teams get different numbers
Both the numerator and the denominator are slippery. Headcount can be
period-end or average, full-time-equivalents or a raw body count, and, crucially, include or exclude contractors, agency staff, and offshore vendors. A company
that outsources its call center to a third party books the cost as a service
expense, not headcount, and posts revenue-per-employee far above an identical
rival that employs the same workers directly. The numerator forks on gross vs net
revenue: a reseller or marketplace reporting gross billings shows a dazzling
revenue-per-head that vanishes on a net-revenue basis.
The trap
Outsourcing manufactures productivity on paper: shifting workers from payroll to a vendor contract raises revenue-per-employee without any real efficiency gain, so the metric rewards a financing/structuring choice as if it were operating skill.
- The full trap, worked on a real export
- Every formula variant, spelled out
- The reconciliation anchor, what to tie it to and when to refuse
Reference: Non-GAAP operating metric, no authoritative standard; SEC human-capital disclosure guidance (Regulation S-K Item 101)