S&P 500 - Market Value Per Employee Perspective
The Standard & Poor's 500 Index, “S&P 500”, includes the 500 largest American publicly-listed companies. In 2016, S&P 500 companies had a combined market value of $20 trillion and employed more than 25 million people worldwide.
At Craft, we track how companies generate value from their Human Capital. So in this report, we wanted to take a look at how much value (in terms of stock market capitalization) S&P 500 companies generate for each employee in the company. Our analysis was based on the total employee count reported by the companies at the end of 2016, which typically excludes contractors.
Grouping the companies into sectors in the chart below, we see the relative market value generation from Human Capital in different sectors.
Market Value per Employee ranged from a high of $5.6 million per employee in the Energy sector to a low of $675,000 per employee in the Industrials sector. The Energy sector had double the MVPE of Healthcare, Finance and Information Technology companies, and almost five times that of Telecoms and Materials.
EOG Resourceswdxefcqufszuzezftuxetqsqxt, an energy company, has the highest MVPE in the group, with a market value of $22M per employee in 2016. With a reported workforce of 2,650, the company significantly outperforms its Energy sector peers -- Cabot Oil & Gas Corporation which generated $18.9M MVPE and Concho Resources with $17.2M.
Pharmaceutical company Incyte and social networking giant Facebook take silver and bronze with $20M and $19.7M MVPE respectively. Interestingly, Facebook is the only technology company ranked in the top 25 on MVPE.
With the exception of Facebook, Incyte and Tobacco manufacturer Altria, the top ranks are dominated by Energy and Financial Services companies.
The table below shows the lowest 10 companies in the index ranked by MVPE. Retailers dominate the list. Gap recorded $66K Market Value per Employee, lower than Macy’s, with $82K. Strikingly, Technology companies Intel and IBM also appear in the bottom ten by MVPE, although that may be explained by the colossal workforces at these companies -- 106,000 and 380,300 employees respectively.
Next, we calculated the change in Market Value per Employee from 2014-16, and the table below shows S&P 500 companies with the highest and lowest growth rate in MVPE.
Almost all of the MVPE growth leaders carried out extensive reductions in headcount last year, therefore saw their value per headcount increase. Interestingly, most of the MVPE growth leaders are in the Information Technology sector, with semiconductor manufacturer, AMD, leading with more than two-fold increase in MVPE.
On the other hand, 9 out of 10 companies with the lowest MVPE growth recruited heavily last year and saw their Market Value in the period decrease, shrinking their MVPE.
We then looked specifically at Technology companies. 12 Information Technology companies including Netflix, appeared among the top 50 companies by MVPE.
The following table shows the top 20 Technology companies by Market Value, ranked by MVPE.
VeriSign, which provides domain names and internet security, was a strong performer, with a Market Value of $8Bn from only 990 employees, ranking fourth in the Technology sector, with $8.04M per employee.
With these Technology companies generating between $2M and $20M in market value for each employee, perhaps the employees should ask for a raise!
Overall, Energy companies led the pack in Market Value per Employee, followed by Healthcare. Technology companies showed themselves to be labour-efficient with MVPE at the higher end of the range, while Consumer Discretionaries and Industrials were labour-intensive and showed MVPE at the lower end of the range.
To see the full list of companies in the S&P 500 Index, please click here.
- Market Value figures used were for the end of 2016.
- Employee number is the total number of employees reported by the companies in Filings.
- Real Estate companies were excluded from the ranking due to non-availability of total employee figures.
- Companies that experienced significant restructuring, such as divestment, merger or acquisition are excluded.
- Company Filings.
- S&P 500 Index list.
- Craft.co analysis.
Craft is a machine-learning powered data and analytics platform building the ‘Source of Truth’ on companies, and mapping the global economy. We organize data from thousands of sources to provide comprehensive, up-to-date sector and company profiles, ranging from early-stage to the largest companies in the world.
As the economy and nature of work continue to undergo a massive transformation, Craft’s mission is to provide context and freely available tools to help people discover and evaluate companies and opportunities. Our platform is used for market and sector research, customer lead generation, competitive analysis and career search.