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What is the secret to Apple's success? Workforce planning.
A Newsletter from Aura Workforce Analytics
💡 Despite stellar growth, Apple has maintained an extremely lean workforce compared with peers (Microsoft, Google, IBM).
💡 Apple’s product-centric business model has been enabled by its growing engineering team while other functions have slimmed down (Ops, Sales).
💡 Companies should regularly track metrics of organisational structure to map their path to success - Apple is an example of an exemplary benchmark in Big Tech.
Over the last decade, Apple has transformed from a hardware product-focused company to a more diversified offering across products, services, and research. This shift has been accompanied by significant turnover growth, almost tripling revenue from around $150B in 2012 to around $400B in 2022.
Organizational structure planning is crucial for businesses to succeed, especially during periods of significant growth. It ensures optimized allocation of workforce resources and capabilities, aligned with the company’s strategic priorities. This structure also needs to support clarity of accountabilities and facilitate efficient decision-making processes. There are many domains of organizational structure to assess, including workforce size and allocation (e.g. to functions/geographies).
Apple has maintained a highly efficient workforce size in relation to company turnover. With ~0.4 FTEs per million dollars of revenue at the end of 2022, this is favorable compared with peers, with only Google having a similarly lean workforce. IBM, on the other hand, has had slowing revenues over this decade without slimming the workforce significantly, although a significant proportion is based in lower-cost regions (to be explored in a later section). This is likely due in part to their more service-centric business model, which would require more client-facing FTEs.
Lean organizational structure can enable agile decision-making, adaptability to market changes, and ultimately, profitability through cost control. As companies go through growth or other major shifts, it is imperative that organizational structure and resource allocation are aligned with the goals of the organization, so that human capital is managed as effectively as possible.
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The geographical distribution of Apple’s workforce has remained relatively similar over the past decade, with the significant majority of employees based in North America or EMEA (~85%). This is in line with Microsoft & Google (~75% & ~80% respectively); however, IBM has its employees spread across APAC, North America, and EMEA.
There are typically strategic trade-offs between these two approaches that may affect a company's internal performance and business outcomes. While a highly centralized workforce may benefit from efficiencies from reduced operational complexity, this may forgo potential benefits from accessing global talent pools, maintaining a more diverse workforce, and gaining an understanding of local market needs & specificities. Employee distribution between higher-cost and lower-cost hubs may also translate into significantly different personnel costs – average North American & EMEA salaries are typically higher than average APAC & LATAM salaries.
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The most significant change to the functional split of Apple’s workforce is a marked increase in Engineering FTEs (from 22% to 34%), associated with a decrease in the Sales team (from 16% to 9%). This mirrors Apple’s increasing product portfolio complexity and streamlined sales approach given the maturity of product adoption.
Apple, Microsoft, and Google each have similar distributions of employees between functional teams, with Apple maintaining a particularly lean organization in FTEs per unit revenue across key functions. By contrast, IBM has very high figures for FTEs per unit revenue, especially in Engineering, Operations, and IT compared with peers. Non-core & support functions typically target lean organizations to save costs, but for some functions, especially Demand functions, it is important to maintain consistent spending with peers to maintain market share or competitive advantage.
Overall, we see that Apple has remained a leader in organizational structure planning, creating a workforce that is optimized for efficiency and reasonably centralized, albeit in higher-cost regions. By aligning the workforce to strategic priorities like product focus, Apple has enabled its ongoing successes over this past decade and established strong foundations to continue this growth and outpace its competitors.
In today’s rapidly evolving business landscape, measuring and understanding organizational structure is essential to harness the true potential of the workforce. At AURA, we support this effort by making workforce data & analytics readily available, enabling comparison of relevant metrics against industry peer benchmarks and exemplars to drive meaningful change.
Matthew Chan
Product Economist, Aura
Note: All information mentioned in this report comes from publicly available data; if you believe the information on your company is incorrect, please reach out to us at:
aura@bain.comFounded by Bain & Company in 2020, Aura is a workforce analytics platform consisting of over 10M companies, 950M working professionals, 20M skills, 400M jobs, daily updates, and easy reporting. Through a convenient monthly subscription service and with a track record of servicing hundreds of Bain & Company’s clients, Aura is your partner in understanding workforce-related topics, such as hiring patterns, retention, promotion, employee efficiency, diversity and inclusion. Experience the future of workforce analytics and unlock your competitive edge with Aura.
