What is average revenue per employee for software companies. Top tech companies revenue per employee business insider. 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. If a problem is identified on the quantitative side, then qualitative analysis is necessary. The histogram above shows the ranges for publicly traded saas companies. The revenue per employee is annual net revenue divided by the number of employees.
Theres an old business maxim that goes where performance is. But revenue per employee should be a staple statistic on any dashboard. The chart of the week is a weekly visual capitalist feature on fridays the worlds largest companies have many similarities, but the size of their respective org charts is not necessarily one of them. In general terms, we expect a revenue generating employee to achieve between 2. But, that analysis examined revenue per employee that only one point in time. Within technology sector only one industry has achieved higher revenue per employee. A to z software and saas operational benchmarking series. 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. Computer programming and custom software development and consulting industry u. Entrepreneurs would do well to track their own revenue per employee and benchmark it against other startups of. Industry statistics cover all companies in the united states, both public and private, ranging in size from small businesses to market leaders. Hr kpis and talent strategy scorecard bsc designer. What is the typical revenue per employee for a b2b saas. A reasonable goal for the entire staff would be a utilization rate of 60 percent to 65 percent.
Over 40 years of hightech marketing disasters youll also receive a free copy of selling steve jobs liver. Unlike many other industries, if a software company grows at only 20%, it has a 92%. Here is the latest data on revenue per employee benchmarks for the construction industry as of 2018. According to stackoverflow, the number of software developers in europe in 2016 was 4,7 million, which in 2018 reached 5,5 million. Gains competitive advantage through best practices in talent recruitment, development and retention. As jesse hulsing pointed out to me, examining this figure over five years reveals quite a bit about the health of the.
Computer programming and custom software development and. Revenue per employee 2017, the softletter benchmark 53. Also public companies which have huge revenues pad this number by having 50100150% of their ftes as contractors, i. We measure revenue per employee on a monthly basis, dividing total revenue by the number of employees and then multiplying by 12 months to get. 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. An architectural firms past revenues per employee are a good indicator of what future revenue to expect. The ratio should exclude payroll and trainingand development employees. Median revenue per employee by linkedin slideshare. Germany has the largest number of software developers around 837k. Which companies have the highest revenue per employee. It spending and staffing benchmarks 20192020it budget. Formal training hours devoted annually to each 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 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. Benchmarking saas startup efficiency with revenue per. How software companies revenues per employee stack up. In addition to revenue, the industry market analysis shows information on employees, companies. Pharmaceutical commercials begin to be more interesting. However, does revenue per employee translate into bottom line performance. Median revenue per employee by year since founding two development tracks one goal efficiency and product value always seem to be competing for internal tale slideshare uses cookies to improve functionality and performance, and to. It helps as a measure of average financial productivity for each employee of the company. The utilization rate is the percentage of hours spent on billable projects vs. Benchmarking your industry interestingly, smaller firms, which you. Revenue per employee formula revenue per employee is an important financial ratio calculated by dividing revenues generated for a specific period by the number of employees in a company. The quantitative piece actually has three parts the ratio, the tolerance range, the trend. Preparing a benchmark for it spending or it employee staffing levels can be a difficult exercise for any business.
Revenue per head in software sammy abdullah medium. Working software is the primary measure of progress. A recurring revenue software business, or software as a service saas business, usually tracks a. A story of startups, innovation, and connectivity in the clouds. Which companies make the most revenue per employee. Overall, energy companies led the pack in revenue per employee, followed by healthcare and utilities. Analytics, extensive financial benchmarks, metrics and revenue forecasts to 2026, naic 541511 vital industryspecific data including metrics, benchmarks, historic numbers, growth rates and forecasts that will save countless hours of research. It spending as a percent of revenue and dozens of other it. Sector ranking best performing sectors by revenue per employee include every company within the sector. Also public companies which have huge revenues pad this number by having 50100150% of their ftes as. Also, if a company employs parttime employees, then for this formula, it is necessary to use fte full time employee equivalent. In the scatterplot above, which compares revenue per employee to revenues in log10 scale, the outliers pop out.
We measure revenue per employee on a monthly basis, dividing total revenue by the number of employees. You also realize the way you do it isnt the only way it can or should be done. One way of measuring the efficiency of a companys revenue model is to benchmark revenue per employee. The best metrics to measure the productivity of your software development are the metrics that you use to measure the business results. Here, we would consider four firms from the same industry. The new explorations, please click on this stupid link and join our community. For example, a software development team might measure story points per month per developer. Revenue per employee total revenue the number of fte employees x 100 the number of employees might vary during the reporting period, so companies take an average value.
Atlassian provides software and tools for software development. Bootstrapped startups have better numbers than funded companies here. Revenue per employee for contractors, builders, remodelers. You should also consider your total salary, wages, payroll taxes, and benefit costs as a percentage of revenue relative to your industry averages. Publiclytraded saas companies have an average revenue per. But today that isnt sufficientshipping software that works but doesnt create value is not a good measure. Thanks for your interest in our subscriber content. On average, companies in the energy sector make at least 2x per employee than others. This new iso, which is still in process of development, could be in a future useful in order to standardize the software benchmarking process and ensure good practices. The only performance goal youll ever need for hr leaders. Tomasz tunguz the fastest growing saas companies have an average quick ratio of 3. Revenue per full time employee fte time to market engage employees develop employees. Just take your total sales revenue and divide it by your total employees or fulltime equivalents ftes. Two metrics we use to compare software businesses are revenue per employee and operating expense opex per employee.
Hr benchmarking reflects simplicity and a 20year history of. The uk and france round up the list of top 3 countries with the largest number of software developers reaching 8,5k and 467,5k respectively. For revenue per consultant, we set utilization targets based on a 70% utilization rate which accounts for downtime such as vacation, stat holidays, professional development. The shrm health care benchmarking report was very useful to our company in. Revenue per employee calculation may combine companies, who have reported financial results in different quarters. Revenue per employee benchmarks of billion dollar companies. This statistic depicts the average annual revenue per employee of professional services within software as a service saas companies. Major vendors, by revenue per employee published by statista research department, mar 16, 2011. For example, a farm that measures the number of apples produced per acre of land. Revenue per employee earlystage companies typically have very low.
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