Corporations often boast that their employees are their greatest asset. While this is true in a sense - employees do provide the intellectual capital and manual labor necessary to establish the foundation of any sort of business, what is the dollar value of every person working for an organization?

Although economic theory would suggest that the value of an employee is the wage that they obtain, an inter-industry comparison can shed some light on the subject. A quick look at the revenue per employee and net income per employee will perhaps give us an adequate metric to compare "the value" of workers in different sectors. These companies were selected on a random basis to provide a basic benchmark measure of the "return on employee" within the industry.

IN PICTURES: World's Greatest Investors

Return on Employee



Revenue per Employee(thousands)

Net Income per Employee (thousands)

Occidental Petroleum (NYSE:OXY)

Basic Materials



3M Company (NYSE:MMM)





Consumer Goods







Eli Lilly (NYSE:LLY)

Health Care



Amazon (Nasdaq:AMZN)




Dell (Nasdaq:DELL)




Southern Company (NYSE:SO)




Honeywell International (NYSE:HON)

Industrial Goods



Industry Differences
The oil and gas giant Occidental Petroleum has the largest return on employees, while the firms in the industrials goods and services sectors lagged behind. Internet based corporations such as Amazon have the highest return ratio, especially in terms of revenue. However, the comparison points out that although Amazon showed significant revenues per worker, the margins were less than in the other industries of interest.

Wage expenses are deducted from revenues to determine the net income figure. So, despite that the average employee at Honeywell International is contributing $17,000 of value to the firm, this figure is net of yearly wages. On the other hand, the average worker at the CME Group provides tremendous returns to the equity of holders, justifying a larger wage. In order to draw accurate conclusions from the data and obtain investment ideas, more companies within each industry must be studied; an intra-industry study must be conducted. However, the above values provide quantitative sample tests of how valuable an employee is to a corporation in fiscal 2009, ignoring any qualitative factors.

The Bottom Line
Price to equity, price to book, price to sales, return on equity and earnings per share are commonly-used ratios to determine which companies show profitable investment potential. Although such metrics have been statistically proven to lead knowledgeable investors to higher returns, employee utilization provides an important measure to determine the efficiency of a corporation. Similar to the PE ratio, the return on employees can only be compared for firms in the same industry. (Looking for your perfect job? Read Business Grads, Land Your Dream Job.)

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Tickers in this Article: OXY, MMM, NKE, CME, LLY, AMZN, DELL, SO, HON

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