Revenue Per Employee: The One Number That Sets Your Multiple
Buyers use revenue per employee as shorthand for whether a business scales without bodies. At the mid-market end it moves the multiple more than growth rate does.
Cyril BelloirFinancial StrategistSame revenue, twice the value
Two firms, both at €12M of revenue. Firm A runs 100 staff: €120k per employee, 12% EBITDA, €1.44M of profit. Firm B runs 55: €218k per employee, 28% EBITDA, €3.36M.
At seven times, Firm A is worth about €10M and Firm B about €23.5M. Same revenue. Roughly 2.35 times the value, decided entirely by how many people it took to produce it.
Measuring it honestly
Use fully loaded full-time-equivalents. Contractors, offshore teams and outsourced agencies all count, or the metric flatters you and due diligence corrects it later at your expense.
Treat it as a trend rather than a snapshot. A rising line across twelve quarters is a story about your operating model. A flat one says every euro of growth required a hire. At a given cost per head, revenue per employee and EBITDA margin are two views of the same fact.
What headcount signals to the other side of the table
Founders quote headcount as evidence of success — "we're 140 people now". A buyer hears 140 permanent obligations, 140 sources of key-person risk, and a management layer they will have to fund after completion.
Nobody has ever paid a premium for headcount. They pay premiums for output per head.
Compute revenue per employee by quarter for three years, plot it, and put two or three comparable peers on the same chart. Where you sit is your multiple conversation.
Former CFO of Europe's fastest-growing facility management group, with more than 60 due diligence processes completed.
Meet the team →Questions we get asked
What is a good revenue per employee?
It depends on sector: SaaS medians run around $150–200k with a top quartile above $250k; professional services typically €120–180k. The trend across twelve quarters matters more than any single figure.
How should contractors be counted?
As fully loaded full-time-equivalents. Contractors, offshore teams and outsourced agencies all count — excluding them flatters the metric and diligence will correct it at your expense.
Does revenue per employee really affect valuation?
Materially. Two firms at €12M revenue, one at 100 staff and one at 55, produced €10M and €23.5M of value respectively at the same multiple — 2.35 times, decided by output per head.
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