Net Profit per full-time employee measures the average amount of profit generated by a business for each full-time equivalent (FTE) employee. It is calculated by dividing the company's total net profit by the number of full-time equivalent employees.
This metric assesses the company’s profitability per employee, which can be useful for projecting future profit and growth plans. This is also important as growth in revenue and team size is only a good decision if you are increasing your profit per person. A low profit metric suggests you need to be more efficient with your team’s time, while a higher value indicates a strong team and might suggest growing the team is a wise business decision. For companies that don’t aspire to significantly grow the size of their team, this is a metric that should be a high priority to increase.
Net Profit per Full-time Employee = Net Profit / No. of Full Time Employees
So Net Profit/FTE indicates how much profit your business makes per employee.