One metric that you can track in businesses is the revenue and profits per employee.  If you haven’t been doing so in your company, take a look at this number over a longer period, perhaps a few years or even longer term.

What trends do you notice?  Are the numbers going up?

The way that business is being done is changing over time.  We’ve moved from an agricultural society to an industrial society to a more information and service society.  I heard an author speak today mention another stage taking place where we’re moving to a more conceptual society.

In these later couple stages, information and conceptual, it’s a very different way of operating than we had before.  Now, we have the capability to generate much more revenue and income per employee than we could before.

The author really challenges businesses to take a look at their employees and see what could be outsourced and keep the headcount down even further.  In his own firm’s case, an investment banking firm, he had reduced his labor from 30 people to now just 7, while at the same time growing his business.  Revenues per employee now top over $2 million.  Income per employee now tops $700,000.

Those are pretty astonishing numbers.  If you were even doing close to this kind of numbers what would that mean for the profitability of your firm?

With the change in technology that’s allowed so much more work to be outsourced that used to have to be done internally.  There’s a whole network of relying upon people who now work from home, perhaps on a part-time basis, at a much reduced hourly rate.

So, take a look at your business.  What are areas that could be ripe for outsourcing and sending the work along elsewhere?  Get your per employee numbers up both in revenues and profits and you could see a nice increase to your bottom line, as well as reduction in some of the headaches of running your business.

Jon Paul, MBA, CPA, CMC, CM&AA

President, Value Added Finance Resources
Bringing new insights on results and maximizing company value