In many instances, these companies are in the restaurant and hospitality industries. For example, McDonald's paid the average crew members and cashiers only slightly more than the $7.25 per hour minimum wage, according to employee-submitted data from Glassdoor.com, an online career community.
A number of these businesses depend largely on labor from overseas. Such businesses include Amphenol, which produces electronic and fiber optic cables, and Cognizant, which offers IT outsourcing services. Often, such companies use foreign labor to provide low costs for their own businesses, as well as pass along cost savings to their clients.
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Just because a company has relatively low revenue per employee does not mean it will stop hiring. As long as adding more employees continues to be profitable — returning more money to the company than it costs to find, train and pay a worker — businesses have an incentive to keep adding workers. A number of companies where the per-employee revenue is relatively low, such as O'Reilly Automotive and Starbucks, added a considerable number of jobs last year.
Based on figures from S&P Capital IQ, 24/7 Wall St. reviewed the companies with the lowest revenue per employee. In order to be consistent, we used net revenue figures as reported under U.S. generally accepted accounting principles. Employee totals used in this analysis are based on S&P Capital IQ measure of full-time equivalent employees. In some instances, S&P Capital IQ employee totals may include franchisee workers, a large part-time or hourly labor force, or a largely foreign-base! d workforce. We also reviewed financial information published in company presentations, filings with the U.S. Securities and Exchange Commission (SEC) and metrics calculated by Morningstar. Darden Restaurants was excluded from this analysis, due to the recent divestiture of its Red Lobster chain.
These are the 10 companies with the least valuable workers.
1. Starwood Hotels & Resorts
> Revenues per employees: $33,700
> Total revenues: $6.1 billion
> Total employees: 181,400
> Industry: Hotels, resorts and cruise lines
Starwood Hotels & Resorts is one of the largest hotel chains in the world, with locations in nearly 100 countries. It had a total of 1,175 franchised, owned and managed hotels and other properties worldwide as of its latest full fiscal year. To manage these hotels, Starwood Hotels & Resorts Worldwide Inc. (NYSE: HOT) employed 181,400 workers at locations owned or managed by the company at the end of its fiscal year.
Last year, the company reported total revenues of $6.1 billion, equivalent to roughly $34,000 per employee. However, that figure may be skewed because the company opened 74 hotels in 2013 and increased its headcount from 171,000 the year before.
2. Yum! Brands
> Revenues per employees: $42,600
> Total revenues: $13.1 billion
> Total employees: 307,230
> Industry: Restaurants
Yum! Brands, owner of the Pizza Hut, KFC and Taco Bell chains, had one of the lowest ratios of total revenue to number of employees in 2013, at just $42,600 per year-end employee. While the company lists more than 300,000 employees, many of these are employed by franchisees, who operated more than 29,000 of the roughly 40,000 Yum! Brands restaurants last year. The bulk of these restaurants were abroad, often in countries like India and China, where wages are typically lower than in the United States. The company has been criticized for its stateside pay practices, and it has opposed a federal minimum wage h! ike.3. Cognizant Technology Solutions
> Revenues per employees: $51,600
> Total revenues: $8.8 billion
> Total employees: 171,400
> Industry: IT consulting and other services
Cognizant Technology Solutions reported $8.8 billion in revenue in its most recent fiscal year, a more than 20% increase from the year before. Salaries reported on Glassdoor.com are quite high given Cognizant had just $51,600 in sales per employee last year. For example, a systems analyst earned more than $55,673 per year on average. The company's low revenue to workforce ratio could be due in part to cheap labor abroad.
The IT consulting firm is known for outsourcing services and employs a relatively large portion of its workforce overseas. The company employed roughly 133,000 of its 171,400 workers at year-end in the Asia-Pacific region, with the majority of development and delivery centers and technical professionals located in India.
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> Revenues per employees: $63,900
> Total revenues: $28.1 billion
> Total employees: 440,000
> Industry: Restaurants
McDonald's, which employed 440,000 last year — mostly low-wage employees — has been at the forefront of the minimum wage debate. According to Glassdoor.com, the average crew member made $7.77 per hour. By contrast, CEO Donald Thompson made a total of $9.5 million in salary and bonuses in 2013. Additionally, groups such as the National Employment Law Project have argued that McDonald's profitability and cash balances indicate it could afford to pay workers a higher wage.
McDonald's revenue per employee was just $63,900. The company's revenue per worker figures do not account for employees working at McDonald's franchises. Fees from franchisees account for $9.2 billion, or rou! ghly 33%,! of the company's $28.1 billion in total revenue. When franchise employees are included, McDonald's employed 1.8 million people worldwide.
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5. Chipotle Mexican Grill
> Revenues per employee: $70,900
> Total revenues: $3.2 billion
> Total employees: 45,340
> Industry: Restaurants
Chipotle Mexican Grill — the wildly successful former McDonald's-owned fast-casual Mexican restaurant — has continued to grow even as food costs have increased. Total revenues grew last year by 17.7% from the year before, among the higher one-year revenue growth rates in the S&P 500. Despite the hype, Chipotle still trails a number of larger chains in sales.
The company's most recent fiscal year revenue of $3.2 billion is still just a fraction of Yum! Brands' and McDonald's respective revenues. The burrito chain has relatively few employees, with slightly more than 45,000 full-time workers as of last year. And while the company's revenue per employee was a little more than $70,000, the company is profitable with earnings that have risen dramatically in recent years.
24/7 WALL ST.: Starbucks, others round out rest of the Top 10
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