"A company's employees are its greatest asset. Your people are your product," Richard Branson.
Businesses are all about people. They're the single most important resource that drives success and growth.
And this latest study from OnDeck is all about putting an exact number on how much each employee generates for their big tech employers.
Using data on employee count and annual revenue data collected from the Forbes' Global 2000 list, it ranked all the biggest tech companies based on the average annual revenue per employee for the last year.
Here's a summary of the results.
A significant portion of this revenue comes from major players like Apple, Microsoft, Amazon, Google, and Facebook, who dominate the market in terms of sales, innovation, and market capitalization. These companies rake in hundreds of billions of dollars each year, with their revenues continually climbing thanks to our ever-growing reliance on technology in both our personal and professional lives..
Netflix's business model is ideal for a high revenue return per employee. As a software firm, its overheads and running costs are relatively small compared to other big tech firms, especially those designing, building, and shipping hardware.
Plus, Netflix has found a unique way of getting the very best out of all its people. The company emphasizes a culture of freedom and responsibility, where employees enjoy a substantial amount of autonomy and flexibility.
Netflix's philosophy is that responsible employees should have the freedom to make decisions that impact their work. And as long as they get the job done, the Netflix bosses let their people do things their way. For example, there are no set working hours or a minimum working hour week on a Netflix employment contract. Instead, work is task and outcome-based. Essentially, it's about working smarter, not harder.
Netflix also offers generous benefits, including unlimited paid time off, and encourages employees to take regular vacations to recharge their batteries. It's a working model based on trust and transparency, fostering an environment where open communication and feedback are highly valued. This innovative approach has been pivotal in attracting the very top talent and maintaining high levels of employee satisfaction and productivity, contributing to an excellent return on investment in people.
Meta takes the third spot, generating $1.6 million dollars per employee. Fourth place belongs to Alphabet. The parent group of Google has 183,000 people on the books, and each person generates $1.46 million for the company every single year.
Uber Technologies has one of the smaller workforces in the big tech space. It employs just under 33,000 staff. But they create over $1 million in revenue each, putting their employer in 5th place.
IBM's lower revenue per employee compared to other big tech companies is caused by several factors that shape its business operations and market position.
Unlike big tech companies with mass-market products or scalable software services, IBM primarily offers specialized, enterprise-level services and solutions, including cloud computing, AI, and consulting. These services require more labor-intensive, customized work, impacting the revenue generated per employee.
IBM is also transitioning from a hardware-centric business to a service-oriented and cloud-based model. While this strategic shift offers serious potential for long-term growth, it involves substantial investment and restructuring, temporarily decreasing efficiency and per-employee revenue.
There's also the intense competition and issue of market saturation that IBM faces. IBM competes with giants like Amazon, Microsoft, and Google. These rivals tend to have more streamlined operations or a broader customer base, allowing them to generate more revenue per employee.
IBM's historical legacy as one of the oldest tech companies poses significant challenges, including higher legacy costs and a more bureaucratic corporate structure that can't pivot in the same way as its agile competitors. That means IBM takes longer to exploit new market opportunities.
Finally, there's IBM's strong commitment to research and development. The firm invests massive amounts of working capital in R&D. It's crucial for future growth and technological advancement. However, it takes time for this research to pay off and turn into revenue.
The first one is Oracle, founded all the way back in 1971, which has a revenue per employee rate of $282,000.
The second is Intel, the US tech company and semiconductor producer launched in 1968. Despite holding its position as one of the biggest firms on the planet, its 130,000-strong workforce generates just under $500,000 a year each. Impressive enough, but still nowhere near its (much) younger rivals.
Read next: New Study Unveils the Major Companies Behind the Great US Employment Boom
Businesses are all about people. They're the single most important resource that drives success and growth.
And this latest study from OnDeck is all about putting an exact number on how much each employee generates for their big tech employers.
Using data on employee count and annual revenue data collected from the Forbes' Global 2000 list, it ranked all the biggest tech companies based on the average annual revenue per employee for the last year.
Here's a summary of the results.
Big Tech: A truly global industry
The big industry is a titan in the global economy, generating staggering amounts of revenue each year. While it's difficult to pinpoint an exact figure due to the industry's vast and diverse nature, estimates suggest that the global tech market generates trillions of dollars annually.A significant portion of this revenue comes from major players like Apple, Microsoft, Amazon, Google, and Facebook, who dominate the market in terms of sales, innovation, and market capitalization. These companies rake in hundreds of billions of dollars each year, with their revenues continually climbing thanks to our ever-growing reliance on technology in both our personal and professional lives..
The big tech company generating the most revenue per employee
Streaming service Netflix takes the top spot. Its employees generate just under 2.5 million dollars each per year for the firm. A big chunk of that will come from the recent password-sharing crackdown, which led to a huge surge in new account sign-ups. So kudos to the Netflix employees who managed that project - even if it cost us an extra $10 per month.Netflix's business model is ideal for a high revenue return per employee. As a software firm, its overheads and running costs are relatively small compared to other big tech firms, especially those designing, building, and shipping hardware.
Plus, Netflix has found a unique way of getting the very best out of all its people. The company emphasizes a culture of freedom and responsibility, where employees enjoy a substantial amount of autonomy and flexibility.
Netflix's philosophy is that responsible employees should have the freedom to make decisions that impact their work. And as long as they get the job done, the Netflix bosses let their people do things their way. For example, there are no set working hours or a minimum working hour week on a Netflix employment contract. Instead, work is task and outcome-based. Essentially, it's about working smarter, not harder.
Netflix also offers generous benefits, including unlimited paid time off, and encourages employees to take regular vacations to recharge their batteries. It's a working model based on trust and transparency, fostering an environment where open communication and feedback are highly valued. This innovative approach has been pivotal in attracting the very top talent and maintaining high levels of employee satisfaction and productivity, contributing to an excellent return on investment in people.
Who else made it onto the list?
Apple comes in a very close second, generating $2.3 million per employee. Around 161,000 people work for the firm. The fact that the company can remain so efficient is a testament to Apple's structure and organizational capabilities.
Meta takes the third spot, generating $1.6 million dollars per employee. Fourth place belongs to Alphabet. The parent group of Google has 183,000 people on the books, and each person generates $1.46 million for the company every single year.
Uber Technologies has one of the smaller workforces in the big tech space. It employs just under 33,000 staff. But they create over $1 million in revenue each, putting their employer in 5th place.
The biggest tech company generating the least amount of revenue per employee
There's bad news for IBM. The US tech company scored the lowest of all in the OnDeck study, with each employee generating just $210,000 a year. That's still double the average salary at IBM. But by big tech standards, it's a relatively low return on people power investment.IBM's lower revenue per employee compared to other big tech companies is caused by several factors that shape its business operations and market position.
Unlike big tech companies with mass-market products or scalable software services, IBM primarily offers specialized, enterprise-level services and solutions, including cloud computing, AI, and consulting. These services require more labor-intensive, customized work, impacting the revenue generated per employee.
IBM is also transitioning from a hardware-centric business to a service-oriented and cloud-based model. While this strategic shift offers serious potential for long-term growth, it involves substantial investment and restructuring, temporarily decreasing efficiency and per-employee revenue.
There's also the intense competition and issue of market saturation that IBM faces. IBM competes with giants like Amazon, Microsoft, and Google. These rivals tend to have more streamlined operations or a broader customer base, allowing them to generate more revenue per employee.
IBM's historical legacy as one of the oldest tech companies poses significant challenges, including higher legacy costs and a more bureaucratic corporate structure that can't pivot in the same way as its agile competitors. That means IBM takes longer to exploit new market opportunities.
Finally, there's IBM's strong commitment to research and development. The firm invests massive amounts of working capital in R&D. It's crucial for future growth and technological advancement. However, it takes time for this research to pay off and turn into revenue.
Other 'poor' performers
The same trend plays out when looking at other big tech firms propping up the table. They include two large legacy big tech firms.The first one is Oracle, founded all the way back in 1971, which has a revenue per employee rate of $282,000.
The second is Intel, the US tech company and semiconductor producer launched in 1968. Despite holding its position as one of the biggest firms on the planet, its 130,000-strong workforce generates just under $500,000 a year each. Impressive enough, but still nowhere near its (much) younger rivals.
Read next: New Study Unveils the Major Companies Behind the Great US Employment Boom
