Every year Fortune magazine puts out a list of the highest grossing companies in America. These companies are household names and this year was topped by multinationals like Wal-Mart Stores, Inc. (WMT), Exxon Mobil Corporation (XOM), Chevron Corporation (CVX) and Apple Inc. (AAPL). Of these Fortune 500 companies, the ones with the higher number of employees are, for the most part, very different from the top companies in terms of revenue. Unsurprisingly, in 2015, five of the top six biggest Fortune 500 companies are retailers.
Wal-Mart is practically synonymous with the term “biggest company.” Not only is the retailer the number one employer on the Fortune 500 list, it's also the number three employer in the world. The next two biggest employers worldwide are the American and Chinese militaries.
Each day 1.4 million people wake up in the United States and put on a blue smock before heading to work at Wal-Mart. With so many people across the country employed by the company, their recent promise to increase minimum salaries to $9 an hour this year and to $10 an hour by next February could have a huge impact on the American economy. (See also Target Vs. Walmart: Who's Winning The Big Box War?)
Trailing far behind Wal-Mart, McDonald’s (MCD) is the number two employer on the Fortune 500 list and the number four employer worldwide with 420,000 workers. It's where many American high school students work, with positions derogatorily referred to as “McJobs.” Salaries are low (typically minimum wage), but the schedule flexibility is great. Most establishments are open 24 hours, allowing students to work and study without time conflicts.
Because McDonald’s is a franchised operation, each establishment is managed slightly differently from the next. Subject to the discretion of the franchised owner, McDonald’s offers its employees health benefits, free uniforms, discounted meals, paid vacation time and educational assistance.
International Business Machines Corporation
IBM (IBM) was the computer company before most people even knew what computers were. Among its inventions since its founding in 1911 are Sabre, the PC, magnetic stripe technology, UPC codes and laser printers. Arguably the most famous invention in recent times is IBM’s Watson, an artificial intelligence computer.
Working at IBM means working for a well-respected company that provides a lot of network and growth opportunities. The company is the third biggest employer on the Fortune 500 list with 412,000 employees and, in the past twenty or so years, has shifted away from being a hardware company. Now it largely makes money by providing business services and holding patents.
Cincinnati-based Kroger (KR) is the fourth largest employer on the Fortune 500 list, with 400,000 people on its payroll. The grocery company was the fifth largest retailer in the world by revenue in 2011.
Kroger’s biggest competitors in the grocery business, as well as in the search for staff, are Costco (COST) and Wal-Mart. Kroger’s offers medical, vision and dental benefits; 401(k) programs; stock purchase programs; insurance plans and store discounts to attract employees.
Home Depot, Inc.
Home Depot (HD) is the place to go if you’re looking for gardening supplies, construction materials or home decor. The company first opened its doors in 1978 and has grown immensely to become the fifth largest employer on the Fortune 500 list, with 371,000 workers.
Home Depot was recently in the news because of a data breach that affected 56 million credit cards. The breach doesn’t seem to have deterred all shoppers – the company currently has the 33rd highest revenue in America.
Minneapolis-based Target (TGT) is a century-old general retailer. Recently, it made headlines for abruptly closing all its Canadian stores, dropping its workforce from 366,000 employees to 347,000. The decrease didn’t change Target’s position on Fortune's of list biggest employers; it still ranks as the number six employer in America.
Like Home Depot, Target suffered from a data breach that strongly affected its share price in 2014. In the intervening time, however, the stock has recovered (which is also partly due to the retailer's exit from Canada) and now trades more than 50% higher than its 2014 low. (See also The 4 R's Of Investing In Retail.)
The Bottom Line
Unsurprisingly, five of the six biggest employers are retailers – IBM, a company that formerly dominated the computer and technology research world, is now a service provider and the only non-retailer. This trend makes sense because retailers, especially multinational ones, need a high number of employees to run a store. From the frontline staff to the distribution centers and to the head office, payrolls for these six Fortune 500 companies are enormous and the largest in America.