Maximising Revenue Per Employee

• Published date: 25 August 2023
• Subject Matter: Corporate/Commercial Law, Employment and HR, Corporate and Company Law, Employee Benefits & Compensation
• Law Firm: Old Mill
• Author: Ashley Harvey

At Old Mill, we understand that your staff can make or break the success of your business. As trusted advisers, we believe that keeping your people informed, involved, interested, and inspired is crucial. However, we also recognise that achieving these goals can be challenging, especially for business owners who lack soft skills training and are pressed for time.

That's why we want to introduce you to a Key Performance Indicator that can significantly impact your business's performance: Revenue per Employee.

This metric serves as a reliable indicator of productivity and resource utilisation. While the optimal revenue per employee may vary across industries and business stages, a higher figure generally suggests greater efficiency and profitability.

To truly understand the potential of your business, it's important to compare your revenue per employee with that of your direct competitors. This allows you to gain insights into your industry's labour demands and make informed decisions accordingly. Comparing businesses with different operational models, such as online retailers versus brick-and-mortar stores, requires careful consideration of factors like physical locations and staff requirements.

To help you improve your revenue per employee, we have identified several strategies worth exploring:

Reduce staff turnover rate

Cultivating a positive work ethos and improving workplace operating conditions can foster employee motivation and satisfaction. A great place to work not only reduces staff complaints but also increases the likelihood of positive recommendations, attracting more customers to your business.

Embrace automation

Identify areas where processes can be streamlined and automated. By leveraging technology, you can significantly reduce the time it takes to process sales or manufacture products. Automation benefits all aspects of your business, including administration and bookkeeping.

Enhance sales training

Provide your staff with effective training on generating more sales. Utilise creative techniques, such as suggestive selling and educating customers on various product uses, to increase customer engagement and drive additional sales.

Explore new selling approaches

Consider implementing customer-friendly policies like 'free returns' or 'try before you buy'. These initiatives can encourage speculative purchases and boost average basket sizes.

Foster a culture of innovation

Encourage your employees to contribute ideas and suggestions for improving...