
What industry has the highest revenue per employee? - emaercklein
https://craft.co/reports/where-do-the-most-productive-employees-work
======
mattzito
One item that I find potentially misleading is that, to my understanding, oil
and gas companies outsource/subcontract a _lot_ of the seasonal/irregular/less
predictable work to third-parties. This means that these people aren't
calculated in these numbers, but they generate a good chunk of the revenue.

I could be wrong about that, but I used to work with Exxon and they talked
about this - that the total employee base would be much larger if you included
all of the subcontractors.

~~~
jofer
I think people often don't realize the scale at which energy companies use
contractors/etc. The "boots on the ground" folks are almost entirely
contractors or hired through another company. Plenty of companies exist purely
to provide employees to one oil company in one field.

Exxon/Chevron/Total/BP/etc each have around 50-100k employees (I may be a bit
off there, but it's in the ballpark). The workforce required for each of their
operations globally is in the low millions.

At the end of the day, a major oil company is actually a construction company.
Their specialty is managing complex projects with lots of subcontractors. As a
result, they have a surprisingly low employee count.

~~~
AngryData
Telecomms do this for laying new wires/fiber too. They subcontract most all of
the lashing, digging, and boring and the pulling of actual fiber lines,
leaving the ends loose, and only then use their own employees to go out and
actually splice them into the previous lines or into an active network. The
connections at the end are quick and easy with little liability risks, unlike
climbing electric or telephone poles, trimming trees near aerial cables, going
into underground utility tunnels, and digging trenches through power and gas
and water and other cables. They also don't have to buy and maintain nearly as
many boom trucks and excavating machines like horizontal boring machines or
mini excavators.

~~~
liotier
> then use their own employees to go out and actually splice them into the
> previous lines or into an active network.

Hahahaha - no. We use contractors for that too - no one who is outside our
offices is an employee. GIS jockeys are contractors too. My developers also
and most of the call centers. Essentially the only in-house functions are
architecture, project management - everything else is contracted out.

~~~
thunfischbrot
And even a good part of those in the offices are contractors. Think Accenture,
Capgemini for IT and project management as well as many others, including
receptionists, secretaries, facility management, cleaners.

------
11thEarlOfMar
Not a fan of Revenue Per Employee as a measure of operating efficiency. It
would be much more telling to evaluate net earnings per employee:

Net Earnings Per Employee:

Valero: $365,452 [1][2]

Apple: $766,800 [3][4]

[1] [https://www.statista.com/statistics/531676/valero-energy-
cor...](https://www.statista.com/statistics/531676/valero-energy-corporation-
number-of-employees/)

[2]
[https://finance.yahoo.com/quote/VLO/financials?p=VLO](https://finance.yahoo.com/quote/VLO/financials?p=VLO)

[3] [https://www.apple.com/job-creation/](https://www.apple.com/job-creation/)

[4]
[https://finance.yahoo.com/quote/AAPL/financials?p=AAPL](https://finance.yahoo.com/quote/AAPL/financials?p=AAPL)

~~~
eevilspock
That Apple number does not include the slave wages of Foxconn workers, other
outsourced labor or contractors for which Apple avoids paying benefits.

~~~
hn_throwaway_99
Actually, it does, and that's why folks are arguing for comparing profit
instead of revenue per employee.

As others in this thread have pointed out, if you utilize tons of contractors,
your _revenue_ per employee may look huge, but your _profit_ per employee will
go down because you still have to pay all those people. Whether you use
contractors or employees, it still comes out of your bottom line.

Now, I assume what you are really arguing is that loads of Foxconn contractors
should increase the denominator in the "per employee" part of the equation.
But that's why profit is a better metric, because if you look at profit per
employee of Foxconn, you'd see it is much, much lower than Apple.

~~~
darkmighty
Tbf, those are trivially not mathematically equivalent (even taking profit
instead of revenue). Suppose each contracted worker cost $1/yr in salaries,
and there were 1000 contractors/1000 in-house employees. Then without
including contractors, the profit per employee is (X-1000)/1000 ~ X/1000,
while including it is (X-1000)/2000 ~ X/2000, much lower. Including or not
contractors does have a potentially large difference.

~~~
daveFNbuck
The trick here is that contractors aren't employees, so they only affect these
metrics by reducing profit.

------
pbnjay
Unless you're going to also plot operating costs per employee I don't know why
anyone would expect this to make any sense.

Net Margins, Net Earnings, Profits, etc would be a much more interesting
measure of employee productivity - though it still hides much of the details.

------
eganist
Altria Group is categorized as "consumer staples."

If you've ever seen the Altria headquarters in Richmond... well, it's
unusually intimidating for a consumer staples company --
[https://www.google.com/maps/@37.6002824,-77.5147176,3a,75y,3...](https://www.google.com/maps/@37.6002824,-77.5147176,3a,75y,300.63h,89.54t/data=!3m6!1e1!3m4!1s81IcLMzH-
iS72bES_Yg_nQ!2e0!7i13312!8i6656)

Altria _is_ the tobacco industry.

~~~
heartbreak
It seems their giant cigarette on I-95 in Richmond was undergoing maintenance
when the street view car drove past.

[https://goo.gl/maps/ZwkRjFHJizP2](https://goo.gl/maps/ZwkRjFHJizP2)

[https://media.gettyimages.com/photos/pole-displaying-
marlbor...](https://media.gettyimages.com/photos/pole-displaying-marlboro-
brand-cigarette-signage-stands-outside-the-picture-id915369944)

------
airstrike
This is a pretty useless metric. It's really only used as a proxy to compare
the value of similar companies in the same industry when no other data is
available.

You know what measures your economic value as an employee? Wages.

Your value as an employee is that which is lost by removing you from the
equation. If you can be replaced by virtually anyone, your value approaches
zero.

~~~
opportune
This is ridiculous. Wages measure the _cost_ of hiring you, not the _value_.
If the economic value of employees were their wages, then there would be no
profit.

~~~
airstrike
The value of the firm is greater than the sum of its parts.

------
refurb
Revenue is a terrible metric. For example, drug distributors have billions in
revenue, but they are just middle men who make a fraction of a percent in
profit.

------
folli
I'm sure there exist a lot of One Person Companies that have much higher RPEs
than $1M.

They are of course not in the S&P 500, nevertheless it would be very
interesting to read about them.

------
crb002
Remove the oil companies and you mostly have a list of rent seekers ready for
massive disruption.

~~~
vkou
... Who operate on razor-thin margins. 99.9% of that revenue goes right into
paying suppliers.

------
sunstone
I'm guessing it would be one of the professional sports leagues.

------
wolframhempel
I feel this is missing some industries with smaller company sizes and extreme
employee to revenue ratios, e.g. Hedgefunds, High-end Legal Practices etc.
Even more so as these may have the ability to avoid support-functions (HR, Mid
Level Management etc.) that don't directly add to the bottom line.

~~~
grigjd3
Well, it is companies listed on the S&P 500 so privately held companies aren't
included.

------
consz
Multiple HFT companies would be top 10 on that list.

~~~
vostok
Neither of the two major publicly traded HFT firms would have made the top 10
if they were in the S&P 500.

[http://d18rn0p25nwr6d.cloudfront.net/CIK-0001592386/f7d31d31...](http://d18rn0p25nwr6d.cloudfront.net/CIK-0001592386/f7d31d31-5d43-40e4-b561-53ef6960dde6.pdf)

[https://www.flowtraders.com/system/files/downloads/Flow%20Tr...](https://www.flowtraders.com/system/files/downloads/Flow%20Traders%20Annual%20Report%202017.pdf)

I can imagine some smaller firms making the list. Did you have any specific
ones in mind?

~~~
dannyw
The most successful ones won't be publicly traded.

~~~
vostok
Ok. Optiver was under $1 million per person so wouldn't make the top 10. IMC
likely would not have been in the top 10 either.

------
nashashmi
This confirms my suspicion of world power being concentrated in the hands of a
few mighty industries.

When software engineering took off, the first industry that software
engineering helped was software engineering. Then once that was nearly
complete, the second industry they helped was the financial industry. And now
the next industry being revamped/upgraded/futurized is the healthcare
industry.

Surprised to see energy in there but as another commenter pointed out, it is
because subcontractors are not included.

So Financials is the most powerful industry, second is healthcare, and then
IT. After IT, my prediction is manufacturing/factories, media, building
construction, and then engineering... in that order.

Not sure where to place energy, but I always saw them as too backwards for
shift. Not sure where to place auto industry either.

------
bboytwist
Scam ICOs

------
mathattack
The better metric for human resource efficiency is profit per employee or
market cap per employee. This would help adjust for large subcontractors by
including them in the cost.

------
rdlecler1
Earning per employee would be a better number because it would better control
for contractors, and high COGs. Finance and tech should do well there.

------
benologist
In tech high revenue per employee is indicative of shirking responsibilities,
like the minimal fraud oversight on google and amazon, or not paying taxes.

------
busterarm
Lobby group fundraising, by far.

------
henadzit
All Big Four tech companies are there... except Amazon.

~~~
fjsolwmv
That's just because Amazon's warehouse workers are employees instead if
outsourced.

------
ToFab123
That gotta be drug dealing or ATM hacking.

------
fwdpropaganda
So the _average_ energy company has twice as high RPE as Google? That's
unexpected...

~~~
coldtea
If Google disappeared tomorrow nothing would be tragically different after a
year or so of adjustment.

Without the energy companies we'd be in Mad Max mode for decades...

~~~
TeMPOraL
> _If Google disappeared tomorrow nothing would be tragically different after
> a year or so of adjustment._

I wouldn't be so sure.

Google Search and Google Maps disappearing would be mildly annoying, but
people would adjust. But if GMail and Google Docs (both personal and business
GSuite versions) were to suddenly shut off, I dread the impact it would have
on the economy. It would seriously disrupt many, if not most, small companies
in very many places around the world. The extent to which people depend on
Google for their data is just scary. Whatever technical literacy a typical
person might have gained in the desktop era, we're losing it again in the
mobile era.

~~~
simula67
Google search ( and all web search engines ) disappearing would probably cause
serious productivity decline in many fields like law enforcement, research and
development, supply chain management etc

Being able to acquire, understand and act on the right information at the
right time is probably _extremely_ important to our civilization

~~~
coldtea
> _Being able to acquire, understand and act on the right information at the
> right time is probably extremely important to our civilization_

It's important but not that much. We did just fine without it in the 90s, 80s,
and 70s and earlier.

So at best we'd be back to the 80s level of efficiency.

Without energy and fossil fuels (and with no time to adjust to alternative
sources, e.g. in a sudden disappearance) we'd get to pre-1920 age levels.

Cars wouldn't move, factories wouldn't work, no cargo transport, etc.

Losing "the right information at the right time" of the kind Google provides
would be a walk in the park compared to that.

It's just that people tend to take for granted what earlier and not so
glamorous foundations offer.

~~~
throwawayjava
Again, I think this comparison is a bit contrived -- an entire industry vs.
one product at one company. Google's search engine disappearing is more
analogous to a railroad or pipeline subsidiary of an oil company. Life would
continue, the railway/pipeline would be rebuilt, and in 10 years everything
would be back to normal.

If you want to make an accurate analogy, compare the disappearance of oil to
the disappearance of _all modern computing_. Both would be catastrophic.

Society is complex and has lots of interdependencies.

~~~
coldtea
> _Again, I think this comparison is a bit contrived -- an entire industry vs.
> one product at one company. Google 's search engine disappearing is more
> analogous to a railroad or pipeline subsidiary of an oil company._

You're focusing on the wrong thing on my argument. I used Google as a stand-in
for web search in general -- regardless of company. Because for me, and most
of the west, Google is that: all of search.

My argument wasn't really about the one company, or about not being able to
replace the company (we could just use Bing and make do with it if that was
all I meant it for).

What's more, I also think my argument would hold even if taken to mean the web
in general (and not just search). It would still be less catastrophic (and
quite mild after a small re-adjustment period) than losing the fossil energy
sector.

> _If you want to make an accurate analogy, compare the disappearance of oil
> to the disappearance of all modern computing. Both would be catastrophic._

Both would be catastrophic but the latter less so. We did fine with minimal to
no computers in the 60s. We can always go back to that level, which is not
that savage or even old. Without fossil fuels (and no transition period to
slowly replace them in toto with alternative sources) there would be zombie
apocalypse levels of mayhem.

~~~
TeMPOraL
> _Without fossil fuels (and no transition period to slowly replace them in
> toto with alternative sources) there would be zombie apocalypse levels of
> mayhem._

I generally agree with your argument, but I'm not sure if, with sudden loss of
general-purpose computing, we wouldn't have small-scale zombie apocalypse on
our hands. The world has grown in many ways since the 60s - including
population and complexity of supply chains. All of this would have to be
scaled down, and here "scaled down" means mass loss of life.

~~~
throwawayjava
For starters, the sudden loss of all modern computing would cripple oil
extraction, transportation, and refining for years on end.

~~~
coldtea
Would it? We transported as much oil in the 70s without "all modern
computing". Faxing maybe...

~~~
throwawayjava
_> Would it?_

Yes.

 _> We transported as much oil in the 70s without "all modern computing"._

No, we didn't. Global production (and consumption) has close to doubled since
1970.

Also, "is this possible to do without computing?" and "would the sudden
disappearance of modern computing seriously interrupt the way that we
currently do this?" are very different questions.

~~~
coldtea
> _No, we didn 't. Global production (and consumption) has close to doubled
> since 1970._

Doubled is not that much to cover.

Besides did it double because of increased demand (more population, more
developing nations, etc) and efficiencies in drilling (e.g. fracking or how
it's called), or because of "modern computing"?

~~~
throwawayjava
Demand and production of oil are relatively coupled throughout history and
both have stayed relatively flat in the west (with substantial caveats,
below). So over the past 30 years, both were driven primarily by developing
economies (on the demand side) and new oil discovery/extraction techniques (on
the supply side).

 _> Besides did it double because of increased demand... or because of "modern
computing"_

My answer is basically "yes". The rest of my argument contains a lot of inter-
related claims, so I'm going to number them to make things easier to follow.

But my fundamental claim is that modern computing played a large role on both
the supply side and the demand side in the oil industry over the past 30
years.

 _1\. Effect of computing on supply:_ Computing helped provide the steady flow
of cheap oil.

1a. Computing enabled more efficient and more accurate discovery, driving down
the price of extracting oil.

1b. Computing enabled new drilling techniques, driving down the price of
extracting oil.

1c. Computing improved the efficiency of both old and new drilling techniques,
driving down the price of extracting oil.

1d. Computing enabled improvements in refining, driving down the price of
refining oil.

1e. Computing enabled improvements in predicting demand, decreasing the risks
of destablizing cycles of under-production followed by glut.

2\. _Effect of computing on demand in developed economies:_ Computing helped
decrease d(demand)/dt for oil in developed economies.

2a. Fuel efficiency in vehicles -- both planes and cars -- was driven in part
by modern computing. Multiple mechanisms explain this: improved design (esp in
the case of cars), more efficient usage (esp in the case of planes and
plants), and efficiencies directly enabled by computing (esp in cars).

3\. _Effect of computing on demand in developing economies:_ Computing
increased the rate of development.

3a. Indireclty: computing helped keep the price of oil more stable and lower
than it would've been without computing (see: 1 and 2). Predictable and
relatively lower prices enabled a faster rate development, which itself drove
more demand. This cycle would've happened in any case, but by keeping prices
lower and more stable, computing increased the rate of economic development
inb these countries.

3b. Directly: In some of the most rapidly developing economies, development
was _directly_ driven by offshoring of IT/computing and especially of
manufacturing related to IT/computing.

To conclude:

1\. computing increased the availability and consistency of oil supply,
driving down both volatility and prices (note: is is the subtle point. In the
case of oil there's a feedback loop between supply and demand, so we have to
consider prices for _equal_ levels of demand in the real world vs. the
hypothetical no computing world. The claim is that, when we fix the level of
demand, prices are significantly lower than they would've been without
computing. The claim is not that absolute prices are lower; I think without
computing, demand would be significantly lower because large swaths of the
world would be significantly less developed),

2\. computing decreased the rate of growth in demand for oil in developing
economies, allowing growth in supply to enable more rapid development in other
economies, and

3\. computing increased demand for oil by both directly and indirectly driving
development.

None of this is to discount the role of other innovations: the spread of
public health practices, vaccinations, the most recent wave of globalization,
relative peace, decolonization, and so on all played major roles as well. My
point is only that, without computing, the state of oil production and
consumption would be substantially different with absolutely massive
implications for all of the non-western world, and perhaps for the west as
well.

------
smallhands
Facebook?

------
testaccount6
Electronic prop trading.

------
arjunsa
Neat!

------
jexah
I'm going to go out on a limb with no evidence what-so-ever and say
anesthetists.

------
sidlls
How can any software developer at, say, Apple or Facebook see this and not
think they're under compensated.

~~~
toomanybeersies
I'm more concerned about the janitors at Facebook that are earning $15 per
hour with minimal benefits [1]. Those free meals and free gyms at Facebook and
Apple are only for the alphas, the epsilons are there simply to cook their
food and clean up after them.

To actually answer your question though, companies will pay the lowest wage
possible while still being able to sufficiently fill positions. For engineers
at Facebook this is $250k. For janitors and cooks it's $15 p/h.

[1]
[https://www.theguardian.com/technology/2017/sep/26/facebook-...](https://www.theguardian.com/technology/2017/sep/26/facebook-
workers-housing-janitors-unique-parsha)

~~~
jldugger
> Those free meals and free gyms at Facebook and Apple are only for the
> alphas, the epsilons are there simply to cook their food and clean up after
> them.

Apple, at least, charges all employees for food and gym. And staffing the
dining center has become hard enough that they pay a thousand dollar referral
bonus.

