Revenue per Employee

Revenue per employee is exactly what it sounds like: your total revenue divided by your headcount. But in agency-land, the more useful version is AGI per employee — agency gross income divided by headcount — because it strips out pass-through revenue that doesn't reflect your team's productivity.

This metric is the broadest measure of agency efficiency. It captures everything: how well you price your work, how effectively your team executes, how much non-billable overhead you carry, and how lean or bloated your organization is. Two agencies can have the same total revenue, but if one has 20 employees and the other has 30, their revenue per employee numbers tell a very different story about operational efficiency.

Industry benchmarks for AGI per employee typically range from $130,000 to $200,000+ for healthy agencies. Below $120,000 usually signals overstaffing, underpricing, or too much non-billable overhead. Above $200,000 generally indicates either a premium-priced agency, a very lean operation, or a heavy use of freelancers (who don't count as employees but still generate revenue).

Revenue per employee is a quick health check for your agency. If the number is trending down, it means you're adding people faster than you're adding revenue — which eventually crushes margins. If it's trending up, you're scaling efficiently.

It's also a critical metric for growth planning. Before you hire that next person, ask: will this hire increase total AGI by at least their fully loaded cost plus your target margin? If you're paying a new hire $80,000 and your AGI per employee target is $160,000, that hire needs to generate (directly or by enabling others) at least $160,000 in additional AGI to maintain efficiency. If they won't, you're diluting your productivity.