In what may be a first for the alternative data space, jobs data specialist LinkUp has, er, linked up with S&P Dow Jones Indices to launch the S&P LinkUp Jobs Index based on its job openings database. The index – launched in the spring – will track job market activity among S&P 500 corporations, spawning component data products that will be marketed by LinkUp and derivative financial products that will be marketed by S&P Dow Jones Indices.
The arrangement represents an innovative approach to unlocking the value of alternative data – often regarded as the byproduct of a company’s core activities. To date, owners of non-traditional data sets have largely focused on sales to quantitative trading firms and hedge funds that have used them to derive unique insight into specific market segments.
LinkUp maintains the largest database of job listings available globally, with 120 million job records extending back to 2007 and updated daily from corporate websites. Using this data set, the company is able to derive predictive data that helps clients – quants and other trading firms – generate alpha at a macro, sector, geographic or individual company level.
The tie-in with S&P Dow Jones Indices involves a co-branded index upon which S&P will develop and market various financial products, such as ETFs and other types of derivative securities. LinkUp will focus on marketing the index’s component data as well as analytics and insights based on the index and its market value. To support the index, LInkUp has mapped its job openings and related data to securities industry identifiers, which helps integration into investment models and strategies.
According to LinkUp CEO Toby Dayton: “At any one time there are 1 million job openings in the S&P 500 market place so it’s a significant proportion of global hiring activity. This gives us a very powerful macro view, and we can drill down into the individual company level.”
LinkUp started out in the human capital management space 20 years ago with a search engine offering job listings, and its data now powers many corporate websites. Its data collection activity – from 60,000 company websites – generates a lot of job market information, which can be used to provide deep insight and predictions of corporations’ hiring plans, human resource budgets, skillset requirements, product development strategies and geographical expansion plans. This can be derived at the company level or can be rolled up into segments for more macro insights.
LinkUp has developed a proprietary technology in-house that allows it to scrape corporate websites quickly and at scale. The company employs 45 staff in Minneapolis, half of which are focused on data and engineering, with sales people located in centres elsewhere.
LinkUp provides its data through a number of mechanisms, including a raw data feed of the entire LinkUp database that is targeted at high-powered capital markets clients. Last year, the company added a SaaS-based application that provides access to standard analytics and the ability to pull down files into Excel for custom analysis. This is targeted at quants, hedge funds, discretionary fund managers, mandate companies and research shops active in the equity, credit, real estate, foreign exchange and other market segments.
Finally, the company offers a range of specific signals services, the most prominent of which is the new S&P 500 LinkUp Jobs Index. The index benchmarks job openings across more than 190 countries, but is strongest in coverage for the Western democracies, says Dayton.
As well as targeting capital markets users, the firm’s data is also consumed by corporate human resources groups, which use it to benchmark themselves against the competition, by jobseekers’ websites and by academics.