Preqin ESG Solutions 49 To calculate the yearly Average Employment Count (AEC) we utilize the formula To calculate net employee growth, we 昀椀rst sum all the available monthly net employee in昀氀ows and convert the resulting value to its yearly equivalent. Next, we normalize it, using AEC To 昀椀nd Employee Volatility for company j, we 昀椀rst use the available monthly data to approximate churn and convert the resulting value into its yearly equivalent. Next, we normalize it, using AEC The advantage of a normalization using the average employment count over the entire year, in contrast to the employment count taken at the beginning of this year, is that we obtain a denominator that is less volatile and robust to measurement errors. What do our employee metrics mean? 12% Net employee growth means that Preqin estimates that a company’s employees grew by 12% within a year of the most recent available data, based on our provider’s employee in昀氀ow and out昀氀ow count data. This value accounts for new hires as well as employees who left or were let go. 23% Employee volatility means that Preqin estimates the proxy of employee turnover amounted to 23% of the total headcount within a year of the most recent available data, based on our provider’s employee in昀氀ow and out昀氀ow count data. This value accounts for new hires as well as employees who left or were let go. ↗ Back to Contents