---
title: "The Software Industry's Productivity Boom: Analyzing Revenue per Employee Trends"
description: "Explore how modern SaaS companies achieve 2x higher revenue per employee vs 2013, with top performers reaching $400k RPE. Key metrics for startup efficiency."
categories: ["financials","data analysis"]
keywords: ["revenue per employee","SaaS efficiency","Tomasz Tunguz","Theory Ventures","software industry trends","financial metrics","data analysis","startup performance"]
ai_summary: "Explore how SaaS companies doubled revenue per employee since 2013, with top performers reaching $400k RPE."
date: 2023-11-13
lastmod: 2026-07-31
canonical_url: https://www.tomtunguz.com/revenue-per-employee-2023/
author: "Tomasz Tunguz"
---

Recently, I was on the [HR Heretics](https://podcasts.apple.com/us/podcast/tomasz-tunguz-on-hiring-the-right-talent-firing-the/id1712407491?i=1000633446418) podcast and we talked about the increasing efficiency of software companies (in addition to other topics including the implications of AI for executives, how to diligence a candidate, & what board members expect of their people leaders).

I realized it has been a [decade](https://tomtunguz.com/revenue-per-employee/) since I've updated revenue-per-employee metrics.  

Here are the trends across the group of 12 publicly traded software & infrastructure companies (which are the fastest growers or most-highly valued) over the last 5 quarters. 

![image](https://res.cloudinary.com/dzawgnnlr/image/upload/ycadtrrwnellfrpqll7n.png)
Revenue per employee spans approximately $100k-$400k. Salesforce tops the list. ServiceNow, Workday, & Veeva round out the top 4. 

![image](https://res.cloudinary.com/dzawgnnlr/image/upload/q_auto/f_auto/w_auto/rpe_point.png)

Compare that to the benchmarks in 2013! In addition to the dated charts! 

In 2013, the average revenue per employee of these companies totaled $200k. Today, that number is $470k for the basket of companies above, a 135% improvement. 

Normalizing for inflation (which was 34% during this past decade), modern businesses produce 2x more RPE than their decade old selves.

| Company | RPE 2013, $k | RPE 2023, $k | CAGR | 
| --- | ---: | ---: |  ---:| 
| CRM |  291 |  382 | 2.7% | 
| VEEV | 258 | 308 | 1.8% | 
| WDAY | 134 | 336 | 9.6% | 
| NOW | 226 | 354| 4.6% | 

Most companies in the image have been acquired. The four horses of the previous decade that still run free, I've listed above. RPE for the group grew from 1.8% to 9.6% per year.


![image](https://res.cloudinary.com/dzawgnnlr/image/upload/zekr88pqvk2kcs1yquf4.png)


In 2023, these companies added about $21k in revenue per employee, but the range spans $13-29k.

The reality is most companies do not grow revenue-per-employee per year linearly. Here's a rough estimate of RPE over time.

| Year in the Company's Life | Estimated RPE Growth |  Note | 
| ---- | --- | ---: |  
| 0-2 | Product Development | 0% |  
| 2-8 | Hyper-growth | 15-20% | 
| 8-15 | Public company | 5-10% | 
| 15 + | Late-stage public | 1-5% | 

For these publicly traded companies, there's a slow decline in growth rate but the combination of product-market fit & the opportunity to expand the product portfolio allows them to keep expanding revenue per employee at attractive rates.
 
I wonder what trends we'll see in 2033. Perhaps another doubling ([driven by AI!](https://tomtunguz.com/llm-impact-gdp/))

### 2023-11-14 
- Note this update post reflects accurate data. The first version of this post published on 2023-11-13 used data from an inaccurate data source. I regret the error.