Understand the cause of higher revenue per employee

Revenue per employee is a useful starting point for discussing how a business is growing. Its meaning depends on what has changed underneath it.

Higher prices, a different service mix or greater use of subcontractors can improve the ratio. Better scheduling and less rework can do so as well. Those explanations have different consequences for the next hiring or investment decision.

Recent ERC research on Welsh Productivity Heroes examines firms where revenue and employment both grow, with revenue growing faster. The accompanying explanations of business success are exploratory, drawing on a small supporting survey and five interviews. They should prompt questions rather than be treated as a formula for growth.

For a service business, I would examine contribution per delivery hour and the cost of rework alongside the headline ratio. Use a consistent method and include outsourced delivery costs. Check whether service quality and timeliness have been maintained as well.

If the improvement reflects a change in pricing, management should understand whether customers are renewing at that level. If it reflects a better process, identify whether the change can be sustained and used elsewhere. If it reflects extra pressure on the same people, investigate whether the result is durable.

That analysis gives the next recruitment proposal a clearer basis: the constraint the role addresses, the work it enables and the outcome management will review.

Source and context

Hart Paily and Hardy Productivity Heroes in Wales published 23 September 2026.

The ERC and Economic Intelligence Wales report by Hart, Paily and Hardy was published on 23 September 2026, using 2024–25 business data. Supporting management evidence includes 16 survey responses and five interviews. These are exploratory findings, not proof of what causes growth. The management recommendations above are Accendo commentary.

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