Human Capital Flows in Australian Banking – Courtesy of Linkedin

One of the lesser known features of Linkedin is the company insights feature that identifies where a company’s current staff have been employed in the past (just search for a company and then select ‘Insights’ to see where employees have come from). Now its not hard to take this data from selected firms in a given sector to create a network map based on people flows between these firms, if you like, a  visual market representation based on people flows.

So what insights can we gain from this type of visual market? For a start people flows are the closest we can get to identifying critical knowledge flows. Despite the emphasis that is put on protecting intellectual capital assets through the use of patents and secured document libraries, the real competitive insights are often held tacitly within the heads of the employees. While patents may protect old and existing ideas, more often it is the value of the ‘next idea’ that drives much of the headhunting activities undertaken by the recruitment industry. Of course its not uncommon to see a move by a high profile employee accompanied by a longer list of loyal followers to their new company. The high tech industries in particular are rife with poaching and headhunting activities, looking to leverage the unique knowledge of a successful product creator. 

Another aspect that can be investigated is the diversity of the source of employees. For example, its not uncommon for consultants and sales people in the IT/consulting industry to move between the top 4 to 5 firms in the sector. Ultimately this can lead to a ‘sameness’ between the key players in the industry, resulting in less innovation and less diversity of offerings.

To explore some of the insights that a people flow focussed visual market can provide, we have selected to investigate the top 4 Australian banks; ANZ, Westac, NAB and the Commonwealth. The Australian banking industry has been somewhat protected by anti-merging laws that govern these top four banks. This has led to a polarisation of the market around the ‘big four’, making it difficult for the smaller banks to grow to compete on  level terms. We used the Linkedin Company insights feature to mine the people flows around these four major banks. This feature provides the top 5 sources only. Using the snowball sampling approach we identified another 24 companies to form the ecosystem for the visual market map shown below:

Note: This map works best with Chrome, Firefox, IE9 and Safari 6 and above.

Some of the functions/features that you can explore with this map:

  1. There is a ‘fly out’ menu (select the orange triangle) where you can choose what you want to colour and/or filter the nodes by. The start up map uses the Australian head Office location for both the colouring and filtering.
  2. You can manipulate the ‘zoom’, ‘font’ and ‘expand’ sliders to explore the map visually
  3. You can slide the ‘relationship strength’ slider to expose the strongest flows
  4. The thickness of the lines and direction of the arrows identify the size of the flows.
  5. The red lines indicate a bi-directional flow.
  6. The size of the circle reflects the number different firms the company draws from (note this is limited to a maximum of 5 by Linkedin)
  7. The different colours represent the attribute selected. The other options are ‘industry’, ‘country’ and ‘vertex (company name)’.

Some Potential Insights

Here are some of our insights from manipulating the map. We’d be pleased to hear about yours:

  1. By moving the relationship strength slider to the right we expose the Sydney/Melbourne Head Office split. ANZ and NAB are headquartered in Melbourne, with Westpac and Commonwealth headquartered in Sydney. Staff appear to be happy to move banks but not as much cities. The balance of flows between these same city banks did not appear to favour one bank over the other.
  2. Click on IBM to find who they provide staff to and you can see that IBM is a dominant  resource for each of the major banks as well as Australia’s leading telecommunications company, Telstra. Much of this could be attributed to IBM’s dominant position in outsourcing and mainframe computing which is central to big banking.
  3. We can see that ANZ and to a lesser extent Macquarie Bank are ‘brokering’ the most international expertise, mostly from HSBC and Citibank. You can simply click on ANZ or Macquarie bank to expose their ecosystem. Macquarie bank appears to ‘feed’ Commonweatlh bank. Select ‘show all’ to get back to the full map.
  4. Select Westpac and carefully move the relationship strength slider. You may note that their ‘acquisitions’ in BT and St. George Bank are being drained of resources to the ‘mother ship’. Not as much going the other way. In fact St.George Bank also has a significant flow into Commonwealth Bank. Again the Sydney head offices would have something to do with this.
  5. Under the ‘flyout’ menu select ‘industry’ as the filter and then select ‘update map’. Now you will see the filter selections are industry sector. Now uncheck banking and finance. You should now see that Telstra is gaining significant people flows from other providers like IBM, Optus and Ericsson.
  6. Go to the fly out menu again and select ‘country’ for both the attribute colour and filter. Remember to select ‘update map’. Now uncheck Australia and the international network is exposed. Citi Bank and HSBC appear most dominant.
  7. Select Australia and the USA and uncheck the rest and you can see the role Citibank plays in connecting USA banking resources with the Australian banking industry via ANZ and Macquarie Bank.

We are not banking experts, so its not possible for us to know whether the above are really true insights or something everyone in the industry knows. If you work in the industry we’d value your comments and feedback.