Winners & Losers May 21, 2015

Brain Drain in a Digital Age

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Finally, a retailer dares to take on Amazon. Walmart recently introduced an annual delivery subscription service, which gives users free delivery for $50 a year. The service is very similar to Prime, priced at $99 per year. Who will win in this celebrity retailer death match? L2’s money is on Walmart.

What does brain drain look like in a digital economy? Losers are CPG and old economy firms who are losing employees to the likes of Facebook, Google, and Amazon. But not all is roses in these new firms – retention rates for some of these are at all time lows. The average employee stays at Google for 1.1 years and at Amazon for one year. Procter & Gamble employees, however, stay for an average of 6.7 years.

Another loser: Media companies with short-term memories. Facebook is making a deal with media companies to host their content on its site so that the consumer does not need to leave Facebook. Media companies get all the revenue but here’s the catch: Aspirational brands such as New York Times survive with a high cost-per-clicks.

American workers are still losing. Now the average S&P 500 CEO makes more in a day than the average American worker.

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