Revenue Per Employee

Net Per Employee

Must be net, because it is not what you make, it's what you keep. Plain Revenue is largely meaningless because it talks only about the size but not quality of impact.

Per Employee

Here are examples of what different companies make in revenue per employee but note profitability will be determined not by the actual value but by margin. Wikipedia shows figures on the order of $1M for the tops, which are energy, software, speculators and retail. [1]. The list skews towards 'tech' with 7 of top 10 by market cap. [2]

• $400k net- Google [3]. About 25% profit.
• $2M - Apple
• $500k - Walmart. But net is only $8000/employee! [4]. 2.5% profit margin, which is cutthroat.
• $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. 2022 update - 9000 printers, 600 employees, $750 per printer (most printer sales are kits). $135k/person revenue ($81M revenue). But net is probably 1/3 of that - or $45k/employee.
• OSE - 2.4 homes (2400 hours per person) yields net reinvestable revenue of $60-120k/person if the sale price is $25k or $50k over costs per house. This gets us into Amazon territory of $300k/person if COGS is the figure of merit, as in the standard definition of 'revenue' in the revenue/employee definition.

Summary

In tech (information enterprise)- Revenue Distribution Ratio is 1/10 or 1/20. [5], defined as revenue per employee to employee earnings. Note: assumes most of revenue is net, as costs are a small fraction in software enterprise.

Revenue per employee in construction is 200k, while the revenue per employee in oil and gas is 2 million. [6]. Same source states that productivity and construction is 70% inefficient, meaning that the waste is in management, waiting around, etc.

Notes

• eBay isuch smaller in volume than Amazon - but it's revenue per employee is 3x [7] and profit is more than 10x. This is because eBay has about a hundred times less employees.
• Profit per employee - beware of bogus figures. Take net income from Wikipedia and the divide by number of employees. Only $20k for Amazon. For eBay, $200k [8]
• Compare to Saudi Aramco at $2M [9]

Wealth Concentration

• Walmart pays an average of $25k for full time people at about $13 per hour. [10] 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 VCR 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.

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).

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.