UK: Britain's most profitable employees. (1 of 4)

UK: Britain's most profitable employees. (1 of 4) - As the recession worsens, Daniel Butler looks at who is getting the best from their employees.

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Last Updated: 31 Aug 2010

As the recession worsens, Daniel Butler looks at who is getting the best from their employees.

Britain's privatised companies have some of the highest levels of profit per employee (PPE) of any in the country. This is the most controversial finding of Management Today's latest survey of company PPE values. No fewer than 10 former nationalised companies rank in our tables, eight in the top half. Star performers are the recently privatised water companies, where PPE values average £34,120, roughly double the £14,370 average of all privatised industries and three times the overall average of £11,800.

In the tables in parts 3 and 4, Management Today ranks the labour performance of Britain's biggest companies, using PPE as a measure, continuing the league table which we first ran last year (Management Today, April 1990). In addition to financial institutions, this year we have omitted oil and gas companies to reduce distortions. And to spot tomorrow's star performers we widened the base to cover Britain's top 500 companies.

Retailing has had a difficult year, but this is not reflected by the sector's performance, with PPEs increasing from an average of £5,800 to £6,800 (up 17%). Star performers in the sector are Albert Fisher (up 33%), Kingfisher (up 28%) and Argyll (up 26%). All are run by low-key executives who have eschewed much of the 1980s glitz and wheeler dealing.

Of the leaders, Racal Telecom was the star performer. Its PPE was up 10% on last year - a particularly strong performance when its wages have only risen by 2%. Guinness also turned in good results, with its PPE up 11%, although this does not match a rise in profits of 33%. The changes at the top are slightly misleading, however. Last year's winner, Enterprise Oil, is excluded from our survey and Slough Estates has suffered badly from the property slump (figures for Slough are not strictly comparable with others in the survey due to a sudden fall in profits announced as we went to press).

Losers are spread across all sectors. Property giant Trafalgar House slips furthest, by 36 places, but other big losers are food manufacturer Ranks Hovis McDougall (down 23 places), retailer Sears (down 16), Maxwell Communication (down 14) and the brewer Bass (down 16).

But alarming for Britain's balance of trade is the collapse of many manufacturers: BPB Industries drops 25 places, Pilkington slides 23, Rolls-Royce 18 and Racal Electronics 12. Lucas Industries also loses ground, down 10 places. It appears that even after the improvements in productivity achieved during the '80s, British manufacturing is still ill equipped for tough times. It needs every penny of profit that it can make from its employees to plough back into critical investment.

Information for the tables was supplied by Extel Financial.

Privatised companies

Company Profit per Rank

employee (£)

BAA 26,890 8

Thames Water 23,000 9

Anglian Water 19,890 11

Severn Trent 17,800 13

British Steel 13,470 21

Yorkshire Water 12,570 25

North West Water 10,610 35

British Telecom 9,290 44

British Airways 6,630 59

Rolls-Royce 3,590 97

Sector average 14,370 32

Retailing

Company Profit per % improvement

employee (£) on 1990

Great Universal Stores 13,600 +10

Albert Fisher 11,750 +33

Hepworth 9,380 -

Marks and Spencer 8,040 +17

Kwik Save 7,330 n/c

Dixons 5,180 -

Kingfisher 5,010 +28

Boots 4,550 +3

J Sainsbury 4,510 +7

Sears 4,420 -4

Tesco 4,340 -4

Argyll 3,520 +26

Sector average 6,800 +17

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