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A Newsletter from Aura Workforce Analytics
💡 Aura Workforce Dynamics is a new product feature that tracks workforce ‘signals’ for companies of interest on a frequent basis, with custom alerts for selected metrics.
💡 This will enable users to get ahead with the latest detailed workforce information, whether they are an investor looking for the optimal time to buy/sell or a corporate looking to track their competition.
💡 This will enable users to get ahead with the latest detailed workforce information, whether they are an investor looking for the optimal time to buy/sell or a corporate looking to track their competition.
Across the previous editions of the Aura newsletter, we have highlighted the wide range of potential use cases for Aura’s workforce analytics platform, from DE&I tracking & competitive analysis to investment due diligence & alumni tracking. These point-in-time analyses can unlock deep data-backed insights that can be applied to any organization to drive meaningful change. However, although this ‘snapshot’ style of reporting is effective for uncovering large-scale shifts, other key use cases require tracking of companies on a more regular basis.
Enter Aura Workforce Dynamics – automated intra-quarter analysis that follows real-time workforce ‘signals’ that may influence company performance. For instance, learning that a company has increased job postings for sales executives while hiring 50% more sales executives in the past month is a strong signal that the company is looking to grow, whereas changes in senior leadership may signal a significant transition period for the company.
In this article, we explain the rationale for this type of analysis, what it includes, and how it works in practice.
Why do we need Workforce Dynamics?
Every corporate organization should periodically analyze its workforce and that of its key competitors, to understand the status quo, its gaps, and subsequently opportunities to better align the workforce to its strategic objectives. Such analysis may include:
- Workforce size:
The number of employees in the organization, associated personnel costs, and relationship with the company’s business volume (e.g. turnover) - Geographical distribution of the workforce:
Where employees are located around the world, and whether this distribution aligns with demand, cost structure (e.g. certain functions based in lower-cost regions), and strategy (e.g. targeting of potential high-growth markets) - Functional distribution of the workforce:
The split of employees across each functional department, and whether this distribution is appropriate for core business processes (e.g. underweight or overweight functions), cost structure, and strategy (e.g. product focus vs sales/marketing focus) - Seniority distribution of the workforce:
The split of employees across junior or management layers, and whether this distribution is cost-effective and enables effective/appropriate oversight - Career progression:
For example, rates of promotion, attrition, and commitment, as markers for employee health within the organization - Other key metrics of interest:
E.g. DE&I metrics, other metrics that align with organization-specific strategy
From an outside-in perspective, however, institutional investors, traders, and other market analysts typically do not get access to this detail of workforce data for companies of interest. Personnel-related data is typically kept confidential – in the case of publicly listed companies, most insights come from quarterly reports, which typically focus on financial performance and have sparse details on workforce metrics, or public media announcements.
This infrequent and incomplete tracking means that workforce metrics carry less weight in predicting the future performance of a target company of interest, despite their role as both a consequence and predictor of company health.
Any source of more frequent and more detailed workforce data, even if only directional, can therefore add value and improve existing financial signals that analysts rely on to predict company performance.
What is Workforce Dynamics?
In order to address this gap, Aura is are developing a new product feature that we are calling AuraWorkforce Dynamics – workforce metrics for companies of interest, updated weekly from publicly available data.
We envision this product as having two distinct but interconnected parts:
- Standard company metrics:
Core real-time metrics covering workforce size, hires and exits, job postings etc., broken down by geography, function, and seniority -
- These metrics will be tracked and compiled for specific companies of interest
- These metrics will be delivered regularly (e.g. weekly) in report format, showing the latest trends/shifts
- Custom alerts:
Alerts can be triggered when specific metrics of interest pass defined thresholds for target companies -
- E.g. When hires/exits/job postings increase or decrease substantially compared to either historical averages or peer averages
- These metrics can be chosen by users so that they can track the data that is most useful for them
- Thresholds can also be defined by users so that they can tailor alerts to their needs
Deviations from historical averages are suggestive of a sudden change in company trajectory (e.g. strategic decision to increase hiring of engineering staff), whereas differentiation from peers is suggestive of an approach divergent from that of industry norms.
The benefits of Aura Workforce Dynamics then are clear: a) knowledge is power; b) proactivity vs reactivity; and c) user flexibility and customizability.
Firstly, financial analysts are always looking for new alternative data sources of signals to get ahead of the market. For example, the now famous use of satellite imagery as an additional input into investment decisions highlights the hunger for information to outperform the competition. Workforce metrics are just another piece of the puzzle that can help generate or disprove an investment thesis.
Secondly, analysts are typically forced into a reactionary stance when quarterly performance reports are released, as these are retrospective and focus on concrete financial results. On the other hand, access to workforce data at higher frequencies can enable interested parties to better predict future financial/stock performance and make decisions ahead of competitors.
Lastly, different users will seek to track different metrics for different companies of interest depending on company-specific, industry-specific, and time period-specific circumstances – hence, we believe that a tool that enables customization will be able to better cater to these varied needs.
How does Workforce Dynamics work in practice?
Take the case study of Salesforce, for example, in order to illustrate how this feature can be applied to your company.
In Q1 2023, Salesforce went through substantial layoffs, totaling to around 10% of the entire workforce. This has enabled them to return to profitability, following a net loss in the quarter ending January 2023 and significant share price drops over 2022. However, on September 15th of this year, Salesforce announced a new wave of hirings, suggesting a pivot in focus towards growth having completed its cost optimization program.
Using Aura Workforce Dynamics, however, this hiring strategy could have been uncovered earlier than the public announcement. In the below figure, it is clear that new job postings were already rising compared to historical averages prior to the public announcement of these hirings - perhaps even as early as late-August:
In fact, in the week to September 13th, job postings were up 53% compared to the previous 6 months, highlighting a significant shift in hiring strategy before the general public was even aware. Such information could have been used by potential investors to adjust their investing strategy, or by competitors to anticipate this change and consider responses proactively.
This case study uses just one example metric during a particular period of interest, but illustrates how having access to selected metrics in real-time for a portfolio of companies of interest can enable users to make timely and well-informed decisions to help them get ahead of the competition.
We are extremely excited to introduce Aura Workforce Dynamics to our roster of workforce analytics tools. We believe that this adds an entirely new dimension to how parties track and meaningfully predict company performance and efficiently capture value.
Matthew Chan
Product Economist, Aura
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