Hacker News Reader

Comment by bushbaba | Hacker News Reader

makes sense given their employee to revenue ratio for Salesforce. They had 73,000 employees with just ~31B/year of revenue. That’s just 424k of revenue per employee.

Such a ratio only makes sense with high growth rates.

View on HN

Am I the only one who thinks $424k/employee is quite a lot? May be a too european perspective?

That's how I'm feeling too and I'm in the US. Just doing some rough math, my company is at around half that and we're doing quite well at the moment. We are much smaller though.

No, the best startups run healthily at -$424k/employee, so any positive number is really great.

(sarcasm)

revenue is not profit.

Well for comparison revenue per employee at Apple and Google is ~$1,800,000 and $1,200,000 respectively.

Here is a list of (American?) companies that make the most profit per employee. You can also see the list in terms of revenue per employee: https://tipalti.com/profit-per-employee/

At the top of the list is Air Lease, generating more than $4m profit per employee.

I didn’t double check for correctness.

Sometimes I feel like I live in a parallel universe because 424k revenue per employee sounds like a large amount and should be very profitable.

Admittedly I'm not in the USA but even adjusting for that it still sounds large?

Are all US salaries so inflated that 424k doesn't more than cover a typical employee even after all overheads?

typically you need 1.5-2x a persons salary in revenue to cover their cost in the US.

Which is why you typically quote that value instead of revenue per employee which without context could be great or terrible.

Quote what value?

Revenue multiple per employee.

Wouldn't that have the same problem? You'd need to break either down by cost of living area to solve it.

No because the revenue per employee multiple has the employee costs scaled on both sides of the ratio.

How so? Revenue isn't scaled, unless you do the thing I said.

According to Google the average Salesforce employee makes $115,000/year, so double that and it's $230,000. By those numbers labor would be almost 50% of their revenue.

According to their most recent quarterly report, they had ~$16B in operating expenses on $23B in revenue through Q322. I would imagine a vast majority of opex is headcount.

/s ?

Reply on news.ycombinator.com