The Observer: FTSE top 20 make £96k per worker

EXTRACT: Oil companies BP and Royal Dutch Shell, for example, both made around £200,000 per each member of staff. Shell employs 109,000 people and made pre-tax profits of £215,600 per individual.

THE ARTICLE

The Observer: FTSE top 20 make £96k per worker

But the average profit in each job conceals huge differences. British Gas heads the list with £445,200 a head. Tesco collects £7,000

James Robinson
Sunday August 27, 2006

The 20 largest quoted companies in the UK make an average of over £96,000 pre-tax profit per employee, according to research carried out by The Observer.
The figures, based on the latest available annual reports and publicly available data from Reuters, show a huge discrepancy in the amount each group makes per member of staff.

BG, formerly British Gas, made by far the most – approximately £445,000 – and Tesco the least, at £6,900. One of the top 20, telecoms giant Vodafone, lost almost £241,000 per employee last year after posting losses of £14.85bn, one of the largest in UK corporate history.

If Vodafone’s results, which were pushed into the red by a decision to write down the value of some parts of its business, are stripped out, the average made by the 20 largest FTSE 100 companies by market value stands at £96,274 per employee.

The figures show that in several sectors companies made broadly similar amounts per worker. Oil companies BP and Royal Dutch Shell, for example, both made around £200,000 per each member of staff. Shell employs 109,000 people and made pre-tax profits of £215,600 per individual. BP, which employs 96,200 people, made £179,800 per employee. A similar trend is evident at insurers, Aviva and Standard Chartered.

Three of the big five banks in the list – Lloyds TSB, Barclays and Royal Bank of Scotland – also made a remarkably similar sum per person (see table) with HBOS heading the sector and HSBC trailing a little behind. And of the two pharmaceuticals companies, GlaxoSmithKline was only a small distance ahead of AstraZeneca.

However, in mining there was a huge spread between Billiton and Anglo American, with Rio Tinto halfway between the two. And booze (in the form of Diageo) appears to be much more profitable per head than fags (BAT).

Tesco, the sole retailer in the top 20, recorded the lowest figure by a considerable margin. The next lowest is BT, on £22,000 per head.

BG has the fewest number of employees on the list – just under 5,400 – and Tesco the most, with over 320,000. Global bank HSBC has more than 250,000 staff, making it the second biggest employer. Perhaps not surprisingly, those that have the most staff on their books make the smallest amount per person. Apart from the oil companies, where profits have been boosted by high market prices in recent years, the groups with workforces of 100,000 or more – including BT, Anglo American, HSBC and Royal Bank of Scotland – are nearer the bottom of the scale than the top.

The average wage in Britain is just under £29,000, according to the Office for National Statistics, although the real cost of hiring employees is higher because of pension contributions, National Insurance and other payments. In London, the average is far higher – nearly £42,000 – but that is distorted by unusually high salaries in parts of the City. And many of the companies listed on the London Stock Exchange have foreign roots or acquisitions, employing large numbers of people in overseas operations where labour is often cheaper.

The research was conducted using the latest full-year profits available, taken from the companies’ annual reports or using data supplied by the companies to Reuters.

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