Balancing Growth and Efficiency: Why Revenue per Employee Still Matters
Over the years, I’ve worked with quite a few businesses, startups finding their footing, mid-sized companies trying to scale, and private equity–owned businesses driving hard toward measurable value creation.
One simple thing I’ve learned across all of them is this:
Growth is easy to chase. Sustainable, efficient growth takes discipline.
That’s where one simple metric makes sense. Revenue per Employee (RPE).
A Simple Compass for Smart Growth
I like to think of RPE more like a compass than a scoreboard.
When revenue per employee trends upward, it means you’re finding the right balance for growth while leveraging technology, improving processes, and empowering people to do their best work. When it trends downward, it’s time to step back and ask what issues need to be addressed. Businesses that use RPE as a checkpoint tend to grow smarter.
They…
Automate what doesn’t need to be manual
Strengthen effectiveness between teams
Make investments that increase productivity, not just activity
It’s about building capacity, not just adding headcount.
Why This Metric Has Always Stuck with Me
RPE is more than a finance number, it’s a measure of how well a business scales. It tells a story about the balance between people and productivity, ambition and execution, investment and efficiency.
I started paying attention to RPE years ago when I noticed how often headcount growth was celebrated more than performance improvement. In my experience the tendency is to apply people, or money, sometimes both, to address the idea of growth and progress.
Final Thought
Every business wants to grow, but the key question is how do we grow better?
Revenue per Employee is a simple way to see if growth is healthy or just busy. It helps you stay focused on improving how the work gets done, not just doing more of it.
Growth without efficiency isn’t progress, it’s motion without improvement.
Keep measuring. Keep learning. Keep improving.
