Microsoft has been criticized as being bloated, with too many layers of bureacracy. Wal-Mart, on the other hand, has often been held up as a lean business machine. But an interesting new analysis holds that Microsoft is far more efficient than Wal-Mart.
Deo Melgaco, in an MSDN blog, calculates what’s called the added value per employee, which is really just a fancy name for net income per employees. He compares Microsoft, Wal-Mart, Costco, and Oracle.
The results are eye-opening: Microsoft get $177,450.70 per employee, while Wal-Mart gets only $5,938.95. Costco, meanwhile, comes in at $15,538.24, and Oracle at $57,235.45.
Clearly, high-tech companies will tend to get much more income per employee than low-cost retail outlets. When you buy something from Microsoft, you’re spending a lot more than 79 cents for lightbulbs.
Still, even taking that into account, the numbers are startling; the average revenue per Microsoft employee, for example, is triple that of Oracle.
Melgaco has some pretty interesting conclusions from his analysis, especially when comparing Costco to Wal-Mart. Wal-Mart is well-know for treating employees badly, and has a 40% turnover rate, compared to Costco’s better practices, and a 6% turnover rate. He concludes that the better you treat employees, the more efficient your company will be.
Amen to that.