As today’s business world continues to be transformed by the sheer volume, speed, and availability of data, information about professionals and their work-related performance has become an essential competitive advantage. Never has information concerning our day-to-day activities been tracked, recorded, measured, and analyzed as much as it is today.
Within the corporate world, employee data has been elevated from internal use as a core human resources (HR) tool to providing a vast array of insight and analytics that are focused not just on the individual employee, but also externally on a much broader scale. Investment managers and global corporations now look to “people data” to provide granular workforce views and help uncover trends within localized employment hubs and regions as well as national and international industries. A window has opened into the global mobility and evolution of human capital.
Employees are often flagged as being the most valuable asset within a company. Typically, those most prominent to the investment community are associated with and measured against the success of the organization concerned.
The Value of Human Capital Data
The increase and accessibility of big data has caused the modern multinational corporation to experience far more scrutiny and examination than ever before. In the past, communication with the financial community was typically channeled through the release of annual financial statements and company press releases. Today, however, analysts and investors alike pay far greater attention to the impact of the individuals behind the corporation—from the Chairman, CEO, and CFO all the way to the board members and specialist management executives who are far more accountable today for their input into the running, and ultimately, the performance of an organization.
Today, analysts and investors alike pay far greater attention to the impact of the individuals behind the corporation—from the Chairman, CEO, and CFO all the way to board members and specialist management executives.
An example of the value that human capital information can present is clear when an investor works to identify a potentially transformational CEO hire. This may occur well before the market has been able to fully digest the hiring announcement. It may even take months, if not several fiscal years, for the CEO’s impact to flow through to the bottom-line. Having awareness of the CEO’s impact may enable the investor to place a long-term and potentially lucrative bet on the future of the organization, particularly in situations where an organization is being inherited in a distressed or turnaround state.
Investors who have a sound knowledge of senior executives’ track records, industry experience, and performance against both company goals and peers may be at a competitive advantage. Instead of basing their investment decisions on just an EPS or dividend yield figure, investors are able to determine if the “right” people are guiding the company through its successes and challenges.
Understanding Investment Applications of Human Capital Data Analysis
Human capital datasets will carry the same requisite attributes as all other datasets, that is, to be timely, accurate, and offer extensive coverage—not only on publicly listed companies in developed markets, but through to private entities within the emerging economies of the world.
However, given the mobile nature of individuals today, human capital datasets require a higher, more frequent level of maintenance than those with a more static universe of coverage (e.g., company names).
Role changes, movers, and leavers occur daily, so capturing this mobility is critical if a database is to become a respected and high-quality 'go-to' source of content.
The frequency of such data updates typically requires advanced technology that scrapes and ingests data sources from press releases, company websites, and other filings. The same processes will be used in a highly systematic manner to retrieve job listings. Providers that curate a more aggregated view of an organization's management will also need to monitor company performance metrics through news sources that pick up corporate releases such as trading statements.
Crowd-sourced content sets need an engaged audience to be drawn to the related website or feedback forum regularly, and most importantly drive feedback requests in a timely manner to ensure the content reflects current opinions. To fulfill these requirements such an aggregator typically requires a higher degree of product placement and marketing. They must also stand out from similar providers while being flexible and providing the ability to extend their service beyond just a feedback system and potentially encompass other human capital-related content.