[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...

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

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

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

[ShinTakuya]

Better yet would be an earnings per hour worked since not all employees work full time, and some companies encourage a lot of overtime.

[eeZah7Ux]

This, and more importantly, mattzito comment on external contractors and outsourcing. Energy companies do that a lot.

[windows_tips]

Wouldn't profit per employee per hour make more sense?

[adamson]

Why would that make more sense than profit per employee or (sub)contractor per hour if we’re trying to measure efficient use of human capital?

[windows_tips]

I meant employee in a general sense. Maybe "worker" is better?

[eeZah7Ux]

Yes - sadly, companies are not required to publish the number of worker-hours per year.

[acchow]

What about efficiency of capital?

[baxtr]

Interesting. I found quite different numbers here. Maybe highly fluctuating depending on the year?

https://www.businessinsider.de/apple-facebook-alphabet-most-...

[asah]

+1 - revenue is not the same as profit...

[eevilspock]

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

[fireattack]

The Foxconn manufacturing factories in China are NOT sweatshops, not even close. My hometown (Zhengzhou) has one of its biggest factory, and for people who have no higher education (like straight out of highschool), it's a super competitive job. People literally bribe to get in. Sure, it's still a soul-draining blue collar job, but they follow laws (for an enterprise in Foxconn's scale, they are strictly supervised by the government and the media. The smaller companies on the other hand, are actually more likely to be sweatshops), they follow schedules, provide food and dorms, and a good enough salary by local's standard of living. What else do you expect for a low-skill entry-level jobs, in a developing country?

Calling hard-working people in developing country (my homeland) "slaves" just because they don't get paid the same as Americans is one of the most hypocritical thing I am really tired to hear on Western forums.

[zamalek]

McDonald's for McDonald's I was paid better in South Africa than I am in America for the same job in the same company. I earn 3 times more dollar-for-dollar, a competitive rate for the region I'm now in. South Africa is regarded in an honest way as cheap labour (but in this case: highly skilled) but those employees live in the top percentage of upper-middle class for the region.

America is extremely expensive to live in, so "westerners" don't really have a grasp of just how far a single USD goes elsewhere in the world.

[fjsolwmv]

America is expensive because the quality of life is higher than in China or USA. Some parts of Europe are higher. There is a very strong correlation between quality of life and cost of living.

[pywh]

Spent some time working in Zhengzhou back in 2010/11, Foxconn paid significantly better (3x in some positions) than other factories. Parent comment is spot-on re: Foxconn job competitiveness.

A lot of the locals I got to know resented Western, media-driven interference in their jobs, they wanted to work longer hours, make more money, etc. They also resented being presented as helpless indentured servants. A lot of them were (are?) proud of their job.

Not applauding the labor practices, just an additional anecdata-point.

[Edited for: data -> anecdata]

[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.

[mywittyname]

They are mathematically equivalent in the sense that they are both equally worthless measurements for the same reason. In both cases, contractors contribute the the numerator without contributing to the denominator.

Using profit seems slightly better (theoretically, it gauges how effective management is at converting contractor effort into profit). But we all know that you can't compare the term "profits" between industries, whereas, revenue is consistent no matter what your business is.

[tjr225]

Why should I believe that the statistic does include foxconn workers? I'm asking this sincerely.

[hn_throwaway_99]

To clarify, I'm arguing that the metric is: (Net Earnings of Apple) / (Number of Apple Employees). What I'm saying is that the net earnings of Apple by definition subtracts out the money paid to Foxconn to build Apple's products.

I'm not arguing that the number includes the Foxconn employees in the denominator, and it shouldn't, because the numerator (Apple's net earnings) doesn't include money paid to Foxconn (as that's a cost of goods sold for Apple).

[slavik81]

It is a better measure, but it's still pretty arbitrary. Apple could achieve an even higher profit per employee just by splitting the company in two: put all the capital in one company and all the employees in the other.

I wouldn't read too much into any of those measures.

[maphar]

They mean that what Apple pays to Foxconn reduces Apple's profit, but does not reduce Apple's revenue. Profit accounts for the cost of subcontracting.

[readitmeow]

Comparing profit doesn't really make sense either. Companies like Amazon show next to no net profit cause they choose to reinvest all their money to avoid taxes and shareholders reap the benefits through capital gains.

[icelancer]

Ooh, now make the same argument for Valero and all the externalities that come with the petrol market!

[jhpankow]

Strategies far from unique to Apple.

[askafriend]

Ok, I'll bite.

Care to name a hardware company that doesn't use parts from Foxconn?

[int0x80]

That doesn't make it less true.

[askafriend]

Why are you assuming OP’s statement is true? It’s demonstrably false especially relative to other employers in the region. Foxconn standards are actually quite high relative to other manufacturers.

People there want to work at Foxconn.

The “slavery” rhetoric is entirely baseless.

[int0x80]

It may be false by other means, but the fact that other orgs do the same is irrelevant.

[askafriend]

Fair, I concede that. I still maintain that OP's statement contributed nothing of value to the discussion.