The average UK employee generates £118,000 of revenue per year for their employer, according to research from small business accountant , Accounts and Legal.
The £118,000 includes every business in the UK, from steel and electricity production to local bars, libraries and everything in between.
In a growing business, one of the challenges often faced by owners is assessing their team’s performance and deciding if employees generating enough revenue.
Figure 1 is a breakdown of data by business size, looking at director-owned business with just one or two employees banded through to large, international corporations with over 500 members of staff.
Immediately apparent from this data is the steady increase in revenue per employee up to Band Four, which represents businesses with 10-19 employees. This is a range where SMEs can be most productive and generate more revenue per employee than their larger counterparts in Bands 5-7.
This productivity is primarily driven by the lower management requirement in smaller business where the majority of staff can sit in productive, operational or revenue generating roles.
Revenue per employee by sector
While the above data does begin to solve how much revenue a given employee should be generating, it doesn’t necessarily help a business owner decide whether to take on another employee or benchmark their business against competitors in their sector.
In order to create a benchmark for individual businesses to measure against competitors business owners need to know two things – (i) how much revenue are businesses in my sector generating per employee, and (ii) could my business generate enough revenue with another employee to justify the operational expenditure?
Figure 2 pulls data for 25 sectors, ranging from restaurants and bars through to software developers and online retail. The data is broken down between micro-businesses with less than 10 employees and small businesses with 10-50 employees.
The chart also illustrates how revenue per employee changes across the sectors with staff heavy businesses, such as restaurants and bars, typically generating between £37,500 and £48,500 per employee, respectively.
On the contrary, sectors with less manpower, like online retail or software sales, generate £150,500 and £147,000, respectively.