Oh dear. Expert Market don’t appear to have much expertise if this is what they’ve gone and done, and nor do journalists from The Independent. Revenue divided by number of employees doesn’t tell you much: the company might be making catastrophic losses for all we know, meaning all those employees aren’t adding much value at all.
It is profit, not revenue, that is the measure of a company’s added value and therefore to work out what each employee is worth on average you’d need to divide profits by the employee headcount. Here’s what they’ve done with Shell…..
Profit is indeed the company’s added value. But the employees’ value is what they must be paid to add value plus the profit made from employing them.
If it costs £100k a year to employ Mr. Newman, and Total makes £50k a year profit per employee, then Mr. Newman must be adding £150k a year of value through his labour.
This also balances our GDP accounting. GDP is the measure of all value added in the economy. GDP is also all incomes – all incomes to both labour and capital. Thus all value added must be equal to all payments to people, whether labour or capital holders.
Hunh, tsk, these youngsters trying to invade on the turf of us old timers.