Part
01
of one
Part
01
What percentage of McDonald's, Walmart's, Safeway, etc. operating budget is spent on labor hiring? If we can get an idea of 5 of the large hourly employers that'd be ideal. How much money are these companies spending on hiring?
Hello! Thank you for your request to determine the percentage of the top 5 hourly employers' operating budget is spent on labor hiring and how much these companies are spending on hiring. The short version is that the top 5 hourly employers spend on average 7.76% of their operating budget on hiring, amounting to $44,497 million. McDonald's spends 10.67 of their operating budget on hiring, amounting to $1,800 million. Walmart spends 7.67% of their operating budget on hiring, amounting to $35,530 million. Yum Brands spends 9.83% of their operating budget on hiring, amounting to $466 million. Target spends 7.88% of their operating budget on hiring, amounting to $5,082 million. Sears spends 6.71% of their operating budget on hiring, amounting to $1,619 million.
METHODOLOGY
My colleague and I have scoured the Internet for articles, papers and statistics related to this subject.
During the research the top 5 hourly employers were identified as:
McDonald's
Walmart
Yum
Target
Sears
Please note that the exact total wages paid to hourly workers by these companies was not available in any financial statements but that industry benchmarks (which, considering these companies' enormous size, should be fairly indicative of these companies operations) were used in estimating the numbers.
FINDINGS
Here follows a breakdown of revenue and operating costs of the aforementioned companies (in millions):
Company Revenue Operating Budget
According to an article on Small Business, labor costs of companies that hire employees by the hour amount to 30-35% of total revenue, and hiring of hourly workers amounts to 20-25% of the total labor costs, on average. For these calculations we shall use 32.5% of total revenue to go towards payroll and 22.5% of this to be allocated towards hiring hourly workers.
If we add the revenues and operating budgets of the top 5 companies, we see:
Revenue = $608,493
Operating Budget = $573,369
From here we see that:
573,369/608,493 * 100 = 94.23% of these companies' revenue is allocated towards operating budgets. If we now apply the percentages as seen above we get:
100*0.325*0.225 = 7.31% of revenue is spent on hiring (on average for the top 5 employers), this would amount to:
0.0731 * 608,493 = $44,481 million. Now we calculate what percentage hiring (on average for the top 5 employers) comprises of the operating budget:
44,481/573,369 * 100 = 7.76% of operating budget is spent on labor hiring, on average, for the top 5 hourly employers. This would amount to:
0.0776 * 573,369 = $44,497 million
For each company individually, we see (in millions):
Company Total Payroll Hiring
McDonald's $8,002 $1,800
Walmart $157,909 $35,530
Yum $2,069 $466
Target $22,586 $5,082
Sears $7,195 $1,619
From here we see cost of hiring as a percentage of total operating budget:
Company Operating Budget Hiring as a %
This table provides a summary of the requested information (in millions):
Company Hiring Spent % of Operating Budget
McDonald's $1,800 10.67
Walmart $35,530 7.67
Yum $466 9.83
Target $5,082 7.88
Sears $1,619 6.71
Total (top 5) $44,497 7.76 (avg)
CONCLUSION
To wrap it up, the top 5 hourly employers spend on average 7.76% of their operating budget on hiring, amounting to $44,497 million. McDonald's spends 10.67 of their operating budget on hiring, amounting to $1,800 million. Walmart spends 7.67% of their operating budget on hiring, amounting to $35,530 million. Yum Brands spends 9.83% of their operating budget on hiring, amounting to $466 million. Target spends 7.88% of their operating budget on hiring, amounting to $5,082 million. Sears spends 6.71% of their operating budget on hiring, amounting to $1,619 million.
Thank you for using Wonder. Please let us know if there is anything else we can assist you with.