Service Revenue per Employee
Annual service revenue divided by total headcount, a single measure of pricing, productivity and staffing combined.
Formula
Service revenue (trailing 12 months) ÷ Average FTE headcount
Why Track It
It is the quickest check that headcount is growing no faster than revenue. A falling number means hiring ahead of sales or pricing that has not kept up.
How It Is Measured
Take trailing twelve month service revenue (excluding hardware and software resale) from accounting. Divide by average full-time equivalent headcount over the same period, counting every employee, not only technicians. Contractors doing core work count as FTEs.
Constraints
Outsourced help desks or NOCs raise it without better operations. Including resale revenue makes it meaningless.
Measurement Note
TruMethods puts average MSPs at $100,000 of annual service revenue per employee, best-in-class at $125,000 and world-class at $150,000 or more. The danger line is the average MSP figure.
Related KPIs
- Adjusted EBITDA MarginEarnings before interest, taxes, depreciation and amortization, adjusted for one-time and owner-specific items, as a percentage of revenue.
- Endpoints per TechnicianThe number of fully managed endpoints supported for each service technician, a measure of delivery capacity and staffing efficiency.
- Service Multiple of WagesService revenue earned for every dollar paid in service delivery wages.
Glossary and Answers
More in People
How productive, stable and engaged the team is. These numbers show whether the MSP has the right headcount and whether it is burning out the people who deliver the service.
- Employee Net Promoter Score (eNPS)Operations Manager
- Employee Turnover RateOperations Manager
- Service Multiple of WagesService Manager
- Technician Billable UtilizationService Manager