As a growing business, one of the challenges you often face is assessing your team’s performance and deciding are your employees generating enough revenue.
To help you, we have interrogated the national data to find out how much revenue is generated per employee across the UK. With this data you will be able to caclulate opportunity cost of taking on additional staff.
What is “Revenue per Employee”?
Revenue per employee is a simple metric calculated by dividing annual revenue by the current total number of employees – in the article we have used employment figures which also capture owners/managers.
This metric is particularly useful in comparing a business to its competitors, with a company looking to have the highest revenue per employee indicating that the business is more productive.
How much revenue does the average UK business generate per employee?
On average UK businesses generate c£118,000 of revenue per employee.
Whilst this is an interesting figure to economists and politicians looking to brag about the UK’s productivity, it isn’t necessarily a useful one to most businesses in the UK. The £118,000 includes every business in the UK, from steel and electricity production to your local bar or library and everything in-between.
What about my sector?
While this information begins to answer the question it doesn’t necessarily help an entrepreneurial business owner in making the decision whether to take on another employee or in benchmarking their business against competitors within their sector.
To answer this question, we need to dive deeper into the data and ask: how much revenue are businesses in my sector generating per employee and could my business generate enough revenue with another employee to justify the operational expenditure? Or, conversely, should the business look for operational efficiencies before making the commitment to another employee?
In our full report, we have pulled the data for 25 sectors that broadly represent our client base ranging from restaurants and bars through to software developers and online retail. We have broken the data down between micro business with less than 10 employees and small business with between 10-50 employees.
How do you use this information?
Here at Accounts and Legal we know that good data can help you make the right decisions for your business and that without data you might just be rolling the dice.
We work with our clients to ensure that they have the best possible data about their business with up-to-date financial data available on the cloud at the push of a button anytime, anywhere.
If you would like access to specific data from this article and truly benchmark yourself against your competitors, you can read our full report here.
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About the Author
Chris Conway is the Managing Director of Accounts and Legal, a Platinum Xero Cloud Accounting Partner. Accounts and Legal use Xero to service client both online and using a more traditional face to face approach, providing core compliance as well as business advisory services from offices in London and Brighton.