Revenue per Head
If the next hire drops RPH below current levels, you are scaling bloat — not revenue.
Projected RPH = (revenue + net added value) ÷ (employees + 1). Hire only if RPH rises.
Revenue per head is the single metric that tells you if your company is scaling up or scaling sideways. A hire that drops RPH is bloat unless load or specialization justifies it — and bloat compounds just like tech debt.
Part of: Saving & Spending Calculators
Quick answer
Projected RPH = (revenue + net added value) ÷ (employees + 1). Hire only if RPH rises.
Key points
- ▸ RPH = revenue ÷ employees. Simple; the trap is what you count on each side.
- ▸ Loaded cost = salary × (1 + management tax %). Management tax: 15–20% of a manager's time per direct report.
- ▸ Ramp penalty: 50% productivity during the ramp-up window. A 6-month ramp on a $100k hire = $25k lost productivity.
- ▸ Verdict bands: HIRE (RPH rises), MARGINAL (within 5% below current), BLOAT (>5% below).
- ▸ Watch the trend across hires, not just the next one. Three marginal hires in a row is bloat accumulating.
Examples
- Clear hire$1.2M/5 → $1.6M/6 with $95k hire. RPH $240k → $260k. HIRE.
- Marginal$1.2M/5 → $1.35M/6 with $95k hire. RPH $240k → $215k. MARGINAL — the hire doesn't pay.
- Bloat$1.2M/5 → $1.25M/6 with $95k hire. RPH drops to $197k — 18% below current. BLOAT.
When to use which tool
- Revenue per HeadMain tool — RPH delta with management tax and ramp-up.Estimate whether the next hire raises or lowers revenue per employee after management time and ramp-up.
- Hire vs AutomateBefore hiring, check if automation could cover the bottleneck cheaper.Should you hire a human at $X/hr or pay $Y/mo for a SaaS/automation stack? Efficiency bar comparison.
- Minimum Viable RateFor contractor-vs-hire framing on the same role.The absolute minimum hourly rate to match a corporate salary after self-employment tax, benefits, and non-billable time.
Related
- Revenue per HeadEstimate whether the next hire raises or lowers revenue per employee after management time and ramp-up.
- Hire vs AutomateShould you hire a human at $X/hr or pay $Y/mo for a SaaS/automation stack? Efficiency bar comparison.
- Minimum Viable RateThe absolute minimum hourly rate to match a corporate salary after self-employment tax, benefits, and non-billable time.
- Tech Debt InterestQuantify the compounding hours to fix a shortcut as the codebase grows on top of it. Maintenance heatmap.
Frequently asked questions
› What about roles that don't directly drive revenue?
Use gross profit per head instead, or measure on functional metrics (tickets resolved, contracts closed, features shipped).
› Should ramp time really count? Trust & accuracy
Yes — it's real payroll against real partial output. Ignoring it systematically over-rates hiring.
› How should I use this guide with a Kefiw tool? How-to
Use the guide as the plan and the linked Kefiw tool as the check. Read the steps first, try the move manually, then use the tool to compare outputs, catch edge cases, and decide whether the result actually fits your task.
› What mistake do tool guides help avoid? Troubleshooting
Tool guides help avoid using a utility mechanically without understanding what you are trying to accomplish. Most word, writing, and text utilities are fast, but speed can hide context mistakes. Know whether you are solving a puzzle, cleaning copy, drafting a line, or checking a rule.
› Can a tool guide help me learn the skill? How-to
A tool guide can help you learn if you pause before accepting the output and ask why it worked. Compare your first guess with the tool result, look for the rule or pattern, and repeat that review. Passive copying solves one task; active review builds the skill.