The Network Effect: Employee Network can be an indicator of Company Value and Innovation!
By | Nicolas BEHBAHANI | Global People Analytics Leader @ Future of Work with HR KPIs expertise
👉 The professional connections of an individual are an extension of their innate human capital, and could have important implications for the information and resources flowing into the firm who employs them, and in turn the outcome of innovative activities and firm value.
đź’ˇ Researchers explored the relationship between human connections and firm performance and found that professional social networks may have potential benefits to companies, and not only to the individual !
✔️ Companies that are more central are having a bigger impact the innovation they produce is more successful in the marketplace
✔️ The firm-level network of U.S. public firms based on real-world employee connections is well-connected, although distinct communities emerge.
✔️ Importantly, these communities differ when considering the connections of employees at different-levels of employment at the firm.
🔥 Companies with higher R&D expenditure gain more value from their centrality in the network, according to a new interesting research published by a team of US researchers using data from 7,715 publicly traded U.S. firms from 2004 to 2018, using data on over 9 million people with 2 billion connections from the professional social network LinkedIn and Compustat
