Improving revenue per employee: An India-centric special scenario
As a fundamental metric of a company’s health, revenue per employee provides an excellent quick view of a company’s overall direction. Within the IT services space, the metric has become more useful given increased deployment of automation and the need to have on-hand and on-site talent with more nimble skills sets, for whom you can charge more for their services. More high-value tasks being done by fewer people should result in increasing revenue per employee. While this is true in theory, legacy services still make up a large portion of revenues, particularly for India-centric IT services vendors, and legacy technology engagements still require a large number of bodies, as automation may be increasing but has not been fully deployed. Further, if revenue per employee has been boosted by increasing attrition, a company may be masking a talent management problem, a sign of an unsustainable strategy.