August, 2019 / Issue 1 - Editorial on nontraditional data for Israeli Investors
The following article illustrates how alternative employment data-reports can be used to gain deep insights into the workforce of a company and identify trends in its strategy and fundamentals.
Main Insights into Nice Ltd. - for the raw file or dynamic dashboards <-please click
the company's employee count has grown +3% YoY
the company is primarily composed of seniority 2 & 3 employees (~60%) while seniority 4 employees make up ca. 20% of the company, while seniority 1 employees are growing the fastest (+6% YoY)
Southern China is the fastest growing geography (+25% YoY) while Northern America is the slowest growing geography (-12% YoY), each geography represents around 30% of the company's workforce
employee change in the two geographies is due to increase/decrease in the number R&D related roles (engineers etc.)
employee turnover is increasing over time and currently circa 30% of the employees leave the company each year
the majority of the company's salesforce is located in Northern America (70%), with Sub-Saharan Africa, Western Europe, and South America adding the moste sales employees in 2018
Raw data file: NICE Ltd. Employment Data
Dashboards: NICE Ltd. Employment - Dashboards
Data Source
The data is collected by a US based data provider from 380M public LinkedIn profiles with 10+ years of historical data covering 2.3+ million companies (including Israeli companies):
The dataset includes:
Metrics: employment measurements (count, inflow and outflow)
Segments: role/position, seniority, skills and geography
Time frequency: monthly
The data is available both as a one-time downloadable data report for a specific company as well as a monthly updated data feed
The following charts show different employment dynamics for Nice Ltd. which develops cloud and on-premise enterprise software solutions and is listed on both Nasdaq and TASE.
Data Accuracy
We present here an analysis of the accuracy of the data
The analysis is performed against data reported in financial filings and shows that the average error in the LinkedIn data is ~5% for the yearly total employee counts
The data provider takes care of adjusting the data for acquisitions and spinoffs
Employees by Geography and Seniority
The top chart (click to expand) shows the percent of employees in each geography (in blue) and the YoY change in employees for the respective geography (in green)
The chart shows that Southern Asia is registering significant growth in employees (+25% YoY), while Northern America quite strong decrease in employees (-12% YoY) while in total Nice Ltd. grew 3% YoY.
The bottom chart shows the % of employees by seniority (0 lowest to 4 highest, in blue) and the YoY change in the respective seniority.
Level 0 and 1 seniorities are showing the most growth (29% and 6% YoY) against the average 3%, and seniorities 2 and 3 represent the bulk of Nice employees at a total of ~60%
Roles by Geography
Southern China
The chart below goes a level deeper by showing the Company Role distribution (in blue) and YoY changes (in green) for the geography with the most growth, Southern Asia.
Most of the hiring here is happening on the R&D level as Software Engineers and Analysts are growing at 40% and 25% respectively and represent about 50% of all employees. Growth in recruiters of 9% indicates that Nice plans on continuing employee hiring in Southern Asia.
Northern America
As shown before the number of employees is decreasing in Northern America. We can look into further details of this decrease in the following plot. The chart shows the Company Role distribution (in blue) and YoY changes (in red) for the geography with the least growth, Northern America.
The average YoY change in employee count for Northern America is -12% (as highlighted above "all filtered"), and large decreases are being recorded in the R&D, Senior Management and Consultant positions. Account, Project and Product Managers are also decreasing but at a slower rate than the R&D.
Geography Focus over Time
Geographies can also be analyzed on a monthly basis: the chart below shows the total employee count for the main 4 geographies over time.
We see a large inflection in Southern Asia in early 2015 coinciding with decreases in the other main geographies.
Employee Outflow and Turnover
The two charts to the right display workforce turnover dynamics.
The top plot shows that the employee turnover (monthly inflows plus monthly outflows over the count) is growing over time and currently at around 4% per month
The bottom plot shows the % outflows for the main roles (in orange) and the respective YoY change in outflows (in red)
It shows that the average yearly outflow is at around 30% with most of the main roles in line with the average. Significant YoY growth (+45%) in outflows was recorded for Software Engineers in 2018
Sales Focus by Geography
The following charts show the number of sales employees hired in 2018 for the respective geography and the % of the total sales employee each geography represents.
Most (70%) of the 187 sales employees are located in Northern America, but Eastern Asia and Sub-Saharan Africa reached 6% in the last year. From the data it appears Nice Ltd. is shifting sales employees away from Southern Asia (-5.8 employees in 2018) into Sub-Saharan Africa (+5.3), Northern Europe (+2.7) and South America (+1.9).
Prediction Models
More sophisticated statistical analysis and modeling can be used to understand how various employment measurements correlate to stock returns and financial metrics
The image below displays such an analysis where geographical employee count is regressed against stock returns for a set of employment variables to understand which are significant and the direction of the correlation
Raw data file: NICE Ltd. Employment Data
Dashboards: NICE Ltd. Employment - Dashboards