NATIONAL AVERAGE OF REVENUE PRODUCTIVITY PER EMPLOYEE:
Employee Productivity - Publishing, Media & Communications
US National Averages
BizStats has compiled the following data from the most recent U.S.
Economic Census. Number of firms represent corporate, partnership and
sole proprietorship establishments with payroll. Payroll as a
percentage of receipts as computed by BizStats will differ from
other tables compiled within this site due to combined reporting of
entities and the different data collection method (questionnaire
format) utilized by the U.S. Census Bureau. Sales includes revenue for
services and products delivered. Number of Employees includes both
full-time and part time employees reported in the first quarter and is
not adjusted for seasonality or turnover. Accordingly, sales per
employee should be viewed in context of these factors.
While it lists out industry wise figures, I have the following article
which is quite pertinent to the subject of Sales per Employee Ratio.
Please check out.
Doing More with Less: the Sales-per-Employee Ratio
By Ben McClure
November 3, 2004
Investment analysts use a variety of key ratios, such as ROE, ROA, and
P/E, to gauge a company's well being. One number that doesn't get a
lot of attention is the sales-per-employee ratio. While it does have
its limitations, this ratio does give investors some sense of a
company's productivity and financial health.
What Is the Sales-per-Employee Ratio?
The name indicates how the sales/employee ratio is calculated: a
company's annual sales divided by its total employees. Annual sales
and employee numbers are easily located in published statements and
Error! Hyperlink reference not valid.
The sales-per-employee ratio provides a broad indication of how
expensive a company is to run. It can be especially insightful when
measuring the efficiency of businesses such as banks, retailers,
consultants, software companies, and media groups. "People businesses"
lend themselves to the sales per employee ratio.
Interpreting the ratio is fairly straightforward: companies with
higher sales-per-employee figures are generally considered more
efficient than those with lower figures. A higher sales-per-employee
ratio indicates that the company can operate on low overhead costs,
and therefore do more with less employees, which often translates into
Consider the software maker Qualcomm. In 2003, the company generated
$690,000 in sales per employee. By comparison, software giant
Microsoft generated about $500,000 in sales per employee. This
suggests that Qualcomm is making more of its workforce and
demonstrates why the stock market consistently awards Qualcomm a
higher valuation than other technology stocks.
Compare Apples with Apples
The sales-per-employee ratio is best used to compare companies that
are similar. Retailers and other service-oriented companies that
employ a lot of people, for instance, will have dramatically different
ratios than software firms. For example, Starbucks Coffee is a highly
efficient retailer, but because it employs nearly 74,000 full and
part-time staff, its sales-per-employee figure of $55,000 seems to
pale in comparison to Qualcomm's $690,000 per employee.
Companies that concentrate on selling and distributing products will
typically enjoy much higher sales-per-employee figures than firms that
manufacture goods. Manufacturing is typically very labor intensive,
while sales and marketing activities rely on fewer people to generate
the same sales numbers. In manufacturing, each employee can usually
assemble only a certain number of products. Increasing production
requires more employees. By contrast, marketing and sales activities
can increase without necessarily adding staff. Take the sports
footwear maker Nike: since making the decision to outsource its
manufacturing to other companies, the firm's sales-per-employee ratio
Early-stage businesses typically have low sales-per-employee numbers.
Companies involved in developing new technology, for example, often
have meagre sales-per-employee figures in their early years. Sonus
Pharmaceuticals, for instance, generated only $610 per employee in
2003. But the firm's sales-per-employee multiple will grow as its lead
drug products, which are still in the trial stage, are expected to
gain wider sales eventually.
You should also be careful about employee numbers stated in the
financial reports. Some companies employ sub-contractors, which are
not counted as employees. This kind of discrepancy can put a wrinkle
in your analysis and comparison of sales-per-employee figures.
Brother, I hope this answers your question.