Revenue Per Employee: Difference between revisions
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Individual value ratio (IVR) should be a minimum of 1 for anyone - this is breakeven at best. Any value <1 means an unsustainable business (it loses money). Ie - if a person gets paid $50k/year and they are paid $50k/year - IVR = 1. IVR=1 may not be sustainable, if there are other costs. Thus, this number does not mean much for understanding profitability of a company. | Individual value ratio (IVR) should be a minimum of 1 for anyone - this is breakeven at best. Any value <1 means an unsustainable business (it loses money). Ie - if a person gets paid $50k/year and they are paid $50k/year - IVR = 1. IVR=1 may not be sustainable, if there are other costs. Thus, this number does not mean much for understanding profitability of a company. | ||
A meaningful number for profitability is Net Individual Value Ratio (NIVR) - the net revenue a person generates divided by their pay. A negative NIVR means the | A meaningful number for profitability is Net Individual Value Ratio (NIVR) - the net revenue a person generates divided by their pay. A negative NIVR means the enterprise loses money. Anything positive may be sustainable - depending on other costs the business must pay. | ||
This metric is consistent with the OSE paradigm of lifelong learning - in that more learning means more pay - and more pay means more revenue for OSE. Thus, it is a win-win scenario. NIVR of 1 means that OSE makes $25k if it pays someone $25k - but it means OSE nets $200k/year if it pays $200k/year. | This metric is consistent with the OSE paradigm of lifelong learning - in that more learning means more pay - and more pay means more revenue for OSE. Thus, it is a win-win scenario. NIVR of 1 means that OSE makes $25k if it pays someone $25k - but it means OSE nets $200k/year if it pays $200k/year. | ||
It is likely that entry level people earn NIVR = 1. Ie, with low pay, people should still produce value - and anything less than 1 would mean minimal | It is likely that entry level people earn NIVR = 1. Ie, with low pay, people should still produce value - and anything less than 1 would mean minimal revenue for OSE. | ||
Managers should earn a higher NVR. If we run crews of 24, a manager may earn $200k. Their crew makes $600k. Thus, the manager's NIVR is 3. This is in the [[Lifelong Learning Enterprise]] scenario. | Managers should earn a higher NVR. If we run crews of 24, a manager may earn $200k. Their crew makes $600k. Thus, the manager's NIVR is 3. This is in the [[Lifelong Learning Enterprise]] scenario. | ||
Enterprise level owners train managers, and hire them. This would be region-wide operations. This may involve 12 managers, each generating net of $400k, or $4.8M. These people are at the $500k/yr level - or NIVR of about 10. Thus, every management level - this model grows the NIVR 3x. | Enterprise level owners train managers, and hire them. This would be region-wide operations. This may involve 12 managers, each generating net of $400k, or $4.8M. These people are at the $500k/yr level - or NIVR of about 10. Thus, every management level - this model grows the NIVR 3x. | ||
Revision as of 13:53, 29 January 2022
Here are examples of what different companies make in revenue per employee per year:
- $1M - Google
- $2M - Apple
- $500k - Walmart
- $400k - Amazon
- Menards - $9B, 45000 - $200k
- Whole Foods - $16B, 91000 - $175k
- $4M - Saudi Aramco
- $3M - Exxon
- FB - $41B, 25105 - $1.6M
- $100k - Wikipedia
- John Deere - $30B for 57,000 people - $500k/employee
- Berkshire Hathaway - $600k - 250000000000/377000
- PBS - $400M, unknown number of employees
- Salvation Army - $3.7B, 1.7M - $2000
- United Way - $92M,
- Lulzbot - $5M, 220 - $24k
- Prusa - $160k based on 350 employees and 6000 printers sold per month
Wealth Concentration
- Walmart pays an average of $25k for full time people at about $13 per hour. [1] That is 20x less than the revenue per employee. Employees earn 5% of what they bring in. The missing piece of info is what is the net revenue per employee.
- Is there a name for this number? There needs to be.
- The closest existing ratio for this is the Wage Ratio - ratio of pay of top to bottom wage.
- A reasonable name should be value capture ratio. For an owner operator, the ratio is 1. For Walmart, it is 5%.
OSE Case - Value Capture Ratio
The ratio of what percentage of revenue the agent controls. For example, if one controls (allocates) all the revenue generated - then the IVR is 1. This means one is self-employed - and this person controls all the revenue they generate. If one is a Walmart employee, the VCR = 0.05.
- OSE proposes in general that that a higher value capture ratio is more desirable than a lower one. Achieving a global ratio of 1 means that everyone is self-employed.
- For mass creation of right livelihood, VCR of 1 is good. If there is an infrastructure for marketing, and R&D - that is a cost included in the distributed enterprises.
- VCR=1 has the potential to be non-controversial, as it can possibly satisfy both the 'capitalists' and 'socialists'. VCR does not cap revenue, it just caps Parasitic Economic Behavior.
Individual Value Ratio (IVR) and Net IVR
This is defined as net revenue generated to earnings per collaborator. Collaborator is anyone who works with OSE.
Individual value ratio (IVR) should be a minimum of 1 for anyone - this is breakeven at best. Any value <1 means an unsustainable business (it loses money). Ie - if a person gets paid $50k/year and they are paid $50k/year - IVR = 1. IVR=1 may not be sustainable, if there are other costs. Thus, this number does not mean much for understanding profitability of a company.
A meaningful number for profitability is Net Individual Value Ratio (NIVR) - the net revenue a person generates divided by their pay. A negative NIVR means the enterprise loses money. Anything positive may be sustainable - depending on other costs the business must pay.
This metric is consistent with the OSE paradigm of lifelong learning - in that more learning means more pay - and more pay means more revenue for OSE. Thus, it is a win-win scenario. NIVR of 1 means that OSE makes $25k if it pays someone $25k - but it means OSE nets $200k/year if it pays $200k/year.
It is likely that entry level people earn NIVR = 1. Ie, with low pay, people should still produce value - and anything less than 1 would mean minimal revenue for OSE.
Managers should earn a higher NVR. If we run crews of 24, a manager may earn $200k. Their crew makes $600k. Thus, the manager's NIVR is 3. This is in the Lifelong Learning Enterprise scenario.
Enterprise level owners train managers, and hire them. This would be region-wide operations. This may involve 12 managers, each generating net of $400k, or $4.8M. These people are at the $500k/yr level - or NIVR of about 10. Thus, every management level - this model grows the NIVR 3x.