Ranking tech companies by revenue per employee

These numbers are interesting, but using them as a ranking method is absurd. Revenue/Employee punishes vertical integration. Let's say that Facebook, instead of developing Casandra in-house, decided to use millions of dollars worth of Oracle RAC. Their revenue/employee would go up, presuming that they could have avoided hiring those good developers. But, their profits would likely be lower. What's the revenue per employee of a private equity firm? Isn't Chrysler an LLC wholly owned by Cerberus? Revenue per employee must be well over $10M!

When I was investing in public companies, this metric was one I used to decide where to put my money. I think it is many times companies settle for hiring as many people as possible to get their profit margins slim. This MO produces companies with a lot of fat who need to lay off employees when the inevitable down turn arrives. They often times over promise and under deliver.<p>Most public companies I researched had revenue/employee between $100,000 and $200,000. This simply isn't high enough to provide any cushion.<p>The reason here, that Craigslist is at the top, is because they outsource information management to the community through flagging and karma assignments. Most of the work of the employees is handling the exceptions to the algorithms, which usually result in the form of an email to craig or a post to the feedback or help topics. These may result in a kind email from craig or banning of a spammy account.<p>They are so good, they already have phone based account validation. None of the other companies on this list have that. CL focuses their employee time and energy on what is important -- stuff only humans can do. The rest is done by computers and this is a brilliant sign that they are doing it right.<p>Most companies handle exceptions with bureaucracy, filling up revenue with salaries until the boat sinks.

Apple: 46710 million / 34300 employees = 1.36180758 million/employee<p>Dell: 52 900 / 94 300 = 0.56097561<p>Microsoft: 58690 / 93 000 = 0.631075269<p>Intuit: 7800 / 3260 = 0.417948718<p>Intel: 38280 / 79800 = 0.479699248<p>The stuffy large companies seem to make about 0.5 million /employee /year. The more aggressive ones(Amazon, Apple, FaceBook, Google etc) seem to make about a million/employee. ALmost certainly doesn't hold up statistically. Just something that struck me.

Some micro economics: An enterprise is supposed to add resources until the marginal revenue equals the marginal cost. In this case, it means the additional revenue produced by the employee equals the salary.<p>Some of these 'efficient' companies are likely leaving value on the table by not adding resources to the point of zero marginal profit.

This article implies that employing more people per dollar revenue is inefficient. However this is only true for comparisons in a particular industry segment.<p>Starbucks' revenue per employee is less than any of those but it doesn't make it less inefficient, just a different model.<p>If you flip the logic round and apply it to customers, 37Signals looks very inefficient. Oracle has few high paying customers whilst 37Signals has many cheap ones.<p>Comparisons of rev/customer or rev/employee are always interesting but only meaningful in a single industry segment.

This feels a little like asking the revenue per pound of a person. If two people earn the same amount, and one if more slender than the other, the slimmer person makes more per pound than his friend. If he were to increase his weight would his earnings increase? I suspect they won't. This is like the view that Craigslist could increase their earnings by hiring employees. Companies like people are organic complicated things. Reducing them to ratios is essentially meaningless.

This is silly in the sense that it really doesn't consider companies who have attempted to scale horizontally in attempts to capture different markets than their core interest.<p>I'm going to go out on a limb here and say Microsoft, absolutely could fire everyone not related to developing/selling/supporting Windows, still make 5 billion dollars a quarter from software sales, and easily be at the top of this list.<p>Likewise, Google's pure search and adwords team is probably much more 'efficient' at generating revenue than say the Android team, but you get diminishing returns at a certain point with your core product line. The smart thing for a company to do is to grow the company's revenue (and hopefully profit) when the time is right into other, less high margin sectors.<p>CraigsList is at the top because they do one thing very well. In five years, if they were a public company, their shareholders wouldn't be too happy if they kept their #1 efficiency spot but didn't continue their growth.

This metric puts a high advantage on companies that outsource people-heavy parts to other companies. Buying your customer support from an outside company greatly increases your revenue/employee even if the cost for support is the same or higher than in-house.

Interesting comparison, yet there are so many <i>wrong implications</i> that can be made from it that I don't Even know where to start.<p>Compare to: short guys in glasses earn 100x as much as tall athletic guys. "Proof": compare Warren Buffett and Bill Gates with the local college basketball team.

very interesting and gives a good idea!<p>still a very high-level view of things and rather imprecise (as probably most comparisons) ...<p>cheers