The Softletter Benchmark 53 are all publicly-held companies and most of our basic business metrics are derived from documents these companies are legally required to provide to investors.
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Below are listed the current members of the Softletter Benchmark 53. This list is periodically updated to reflect changes in company status and viability.
The Big Four
SaaS Sales and Marketing
- Endurance (Constant Contact)
- Benefit Focus
SaaS B2B/C Verticals
- Angie’s List
Fourth is SaaS Verticals. This group ties back to the beginnings of the SaaS revival after the ASP collapse of 2001. SaaS established itself by occupying niches and new markets that could not be reached by on-premise products. It is a myth that corporate and CIO acceptance fueled its growth.
- Millenia Media
- Glu Mobile
- NQ Mobile
Next is Mobile B2B. Mobile applications are growing rapidly, but they face a unique set of business challenges. Growth must come from one of two primary sources. The first is very high volume sales, as there’s tremendous market resistance to paying high prices for apps (ask the poor GPS firms that attempted to sell $50+ mapping systems to iOS and Android owners). Note that Apple price caps products in the App Store at $999.00. The second is services built upon network effect data, something that can’t exist unless sales or use volume creates it. Until recently, not enough publicly-held mobile B2B firms existed to justify creating this category.
- King Digital
- Electronic Arts
- Snap Interactive
- Jive Software
- Red Hat
Revenue per Employee is one of the most popular financial metrics by which to measure a software company’s performance. RPE is indeed a useful productivity benchmark, but several caveats apply. One is that a healthy RPE does not necessarily translate to a dynamic, growing company. That’s why despite its handsome RPE, Microsoft stock has not excited anyone in the last several years. Larger companies do tend to generate large RPE numbers; business does indeed benefit from scale, as the Big Four’s handsome numbers demonstrate. But while companies are growing rapidly (something that makes IPOs exciting and the hearts of investors beat faster), RPE can suffer greatly as revenue is devoted to hiring, R&D, and sales and marketing programs that drive growth.
Another point to remember is that a major layoff can temporarily boost RPE; however, this is usually only a temporary fix. But CFO’s love to point to the sugar of enhanced RPE numbers as proof of increased efficiency and health at a struggling company. Sometimes there’s a big crash at the end of the rush.
When analyzing RPE, the sweet spot you should be looking for is:
- Is the company in an active, growing market segment?
- Is the company outperforming its contemporaries in terms of RPE?
- Has the company avoided laying off significant numbers of employees in the previous fiscal year?
If the answer is to the above is yes, RPE can be used as a significant indicator of growth and good management.
|Cohort||Group Median 2015||Group Median 2014|
|The Big Four||$1,003,095||$954,872|
|SaaS Sales and Marketing||$161,014||$198,422|
|SaaS B2C Verticals||$219,608||$184,370|
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