Annual growth rate of total number of employees
factor.formula
Annual growth rate of total number of employees:
Average number of employees:
in:
- :
Refers to the total number of employees disclosed at the end of the most recent reporting period (period t), usually derived from the most recent financial report.
- :
Refers to the total number of employees disclosed at the end of the reporting period (T-1 period) of the previous year, usually derived from the financial report of the previous year.
- :
It refers to the arithmetic mean of the total number of employees at the end of the most recent reporting period (period t) and the end of the reporting period of the same period last year (period t-1), which is used to smooth short-term fluctuations.
factor.explanation
Annual headcount growth measures the relative change in the size of a company's workforce over the past year. Empirical studies of this indicator show a negative correlation between higher headcount growth and lower future stock returns. This may reflect the decline in operating efficiency and increased management costs when companies overexpand, as well as possible overoptimism during periods of rapid expansion. Therefore, this factor is often viewed as a reversal factor rather than a direct bullish factor. In quantitative models, it needs to be used with caution and combined with other fundamental or technical factors for comprehensive consideration.