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Revenue per employee
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Measure revenue per full-time equivalent and your return on every dollar of payroll.

Your numbers

Annual revenue (A$)

Full-time equivalents (FTE)

Operating costs (A$)

Total compensation (A$)

Productivity read-out

What is a good revenue per employee figure?

It is highly sector-dependent. Software firms often post very high figures, while labour-intensive industries post much lower ones. Compare against businesses in your own industry, and watch your own trend over time, rather than chasing a universal number.

How we calculated this

Revenue per employee is annual revenue divided by full-time equivalents. Human capital return on investment (HCROI) takes revenue, subtracts every operating cost except compensation, then divides what is left by compensation, so it reads as the dollars returned for each dollar spent on people. Neither number is set against a benchmark here, deliberately: capital intensity and business model swing both figures so far across industries that a universal target would mislead. Read them against your own history and your sector. The working, the assumptions and the sources are below.

New to the term? Read the plain-English definition of revenue per employee in the HR Glossary.

Your working

Assumptions

FTE, not headcount. Part-timers and casuals are converted to full-time equivalents; use headcount instead and revenue per employee looks worse than it is.
Compensation should include everything you pay people: wages, super, on-costs and bonuses. Contractors and outsourced labour usually sit outside it, which flatters both ratios in businesses that use them heavily.
HCROI treats operating costs as complete. Leave depreciation or cost of goods sold out and the return looks better than it is.
Revenue per employee is a productivity read, not a profit read. A high figure on thin margins is common in wholesale and retail; a lower figure on strong margins is common in professional services. Neither is better on its own.

Sources

ABS, Australian Industry, 2024-25 (income, wages and employment by industry, the base for a sector comparison), released June 2026
ISO 30414:2025, Human resource management: human capital reporting and disclosure (revenue per employee and human capital ROI as standard productivity metrics), 2025
Human capital ROI was popularised by Jac Fitz-enz and the Saratoga Institute in "The ROI of Human Capital" (2000). It is a management convention rather than a regulated measure, so definitions of "operating costs" vary between reports; compare like with like.

What to do about it

These two ratios say how much the workforce is returning. They do not say why, and the why is the only part you can manage. These steps are for whoever prepares the people numbers for the board or the CFO, whether or not they present them.

Set the comparison before anyone reads the number

Pull your industry's income and employment figures from the ABS Australian Industry release and calculate the same ratio for the sector. Then show your own figure for the last three years next to it. Without both, the number gets compared with whatever someone read last week.

Cut it by function

Revenue per employee is created unevenly. Split FTE and, where you can, revenue by team or business unit. The overall figure hides a sales team carrying the number and a back office that has grown faster than the business, or the reverse.

Read HCROI beside it, and audit what is in compensation

If contractors, agency labour, outsourced functions or offshore teams sit outside compensation, the return looks better than it is. Restate it with them included once, so the board sees the honest version.

Where a tool helps

Trace the movement to its people causes

When revenue per employee falls, ask four questions: how many seats were vacant and for how long, what turnover cost you, where engagement dropped, and which teams lack the capability the plan assumed. Each of those has a number. Put them on the same page as the ratio.

Make it a quarterly line with its drivers attached

Revenue per FTE, HCROI, vacancy weeks, turnover, engagement. Reported together, every quarter. The ratio on its own invites a headcount freeze. The ratio with its drivers invites a decision.

You have the return.
Now find the drivers.

Compono is a talent intelligence platform: an applicant tracking system and an employee engagement platform built on the same people data. Finance systems produce the ratio above. Most people systems record who is employed and what they are paid, and stop there.

Step 4 asks for the people causes behind a moving ratio. Compono holds two of them as live data: how well each hire fits before they start, and where engagement is dropping while the people are still on the payroll. The number above is last year's return. The drivers of next year's are people data, and that is what Compono holds.

See how it works

Compono

$34M

saved by VicRoads over two years

Common questions

What is human capital ROI?

Human capital return on investment (HCROI) measures the profit generated for each dollar spent on employee compensation. A result of 2 to 1 means every dollar of compensation returned two dollars to the business after other costs. It is a way to read the workforce as an investment, not just a cost line.

Why subtract compensation from operating costs in the HCROI formula?

Removing compensation isolates the return on the people investment itself. You compare the profit produced (after non-people costs) against what you spent on people, so the ratio reflects the value of the workforce rather than mixing it with every other expense.

Can I compare these figures across industries?

Carefully, and rarely usefully. Capital intensity, business model, and outsourcing all skew the numbers, so a benchmark from another sector can mislead. The strongest comparison is against your own industry and your own history.

This page is general information, not legal advice. We check figures annually and update them on a best-efforts basis, but employment rules change and we cannot promise everything here is current or complete. Before you act on it, confirm the detail with the relevant authority in your country or your own adviser. Last reviewed July 2026.

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