As part of our research offering, we are introducing workforce analysis at DiligenceSquared - a bottom-up assessment of how a company is building its workforce.
By analyzing public professional profiles, we track workforce development over time and compare a company with its closest competitors. The result is an additional source of evidence on company momentum, strategic priorities, operating efficiency, and competitive positioning. Because we capture both additions and departures, we can also read employee churn as an indicator of organizational health.
What the analysis covers
Our workforce analysis provides a detailed view of:
- Total headcount and growth over time
- Employee additions and departures, including gross and net turnover
- Geographic composition and growth
- Functional workforce composition
- Employee experience and seniority
- Educational and professional backgrounds
- Revenue productivity, where reliable revenue estimates are available
- Differences between a company and its competitors
The analysis can be incorporated into a broader commercial due diligence or used to investigate specific questions about a company, market, or competitive landscape.
A useful indicator of growth and momentum
For private companies, financial performance can be difficult to observe between funding rounds or company announcements.
Workforce development provides a more frequent, directional indicator of momentum. It shows how quickly a company is adding employees, whether growth is accelerating or slowing, and how hiring compares with employee departures.
In our recent analysis of Harvey and Legora, for example, Harvey was around twice the size of Legora, but the gap had narrowed from seven times larger, illustrating how quickly Legora was scaling.
Headcount does not replace revenue data, and public profiles are not the same as official company reporting. But the development over time can provide an important signal when other information is limited.
See where the company is investing
Workforce analysis also shows where growth is taking place.
Geographic hiring can indicate which markets a company is prioritizing and whether international expansion is supported by local employees. Functional hiring shows whether investment is concentrated in product development, engineering, commercial expansion, operations, or leadership. Combined, the two views show where a company is building out go-to-market, where its engineering talent sits, and where it is moving back-office functions.
In the Harvey analysis, we could see Harvey building its European presence while Legora expanded in the US. We could also see that both companies had a similar functional composition - a GTM-led workforce, followed by product - but with Harvey employing approximately twice as many people across each function.
These patterns test company narratives against observable activity: a stated international expansion strategy is more credible if the company is hiring local commercial, product, and leadership teams, and a company describing itself as product-led should have the workforce to match.
Understand the organization being built
Two companies with the same number of employees can be building very different organizations.
We therefore analyze the backgrounds of current employees, including:
- Previous employers
- Years of professional experience
- Educational institutions
- Highest degree obtained
- Functional expertise
- Seniority
This provides insight into the capabilities a company is assembling and the type of talent it can attract.
Our comparison of Harvey and Legora showed that Harvey hired more heavily from Big Tech and globally elite universities and had a slightly more experienced workforce. Legora employed a higher proportion of people with postgraduate degrees and recruited more heavily from other startups.
The purpose is not necessarily to create a single measure of workforce quality. Different talent strategies reflect different operating models. The analysis helps explain what each company is optimizing for and the potential benefits and costs of that approach.
Compare growth with organizational investment
When revenue estimates are available, workforce data can also be used to assess revenue per employee.
This shows whether revenue is keeping pace with organizational expansion: a declining ratio may indicate that the company is investing ahead of growth, while an improving ratio may suggest increasing productivity and operating leverage.
In the Harvey analysis, Legora had rapidly converged towards Harvey’s level of ARR per employee. This provided another indication that Legora was not only adding employees quickly but also becoming more productive as it scaled.
The metric is directional and should be read alongside the company’s stage, investment cycle, and broader financial performance, but it is a useful benchmark across companies of different growth rates and sizes.
From employee profiles to investment insights
Public workforce data is imperfect. Profiles can be outdated, job titles are inconsistent, and not every employee can be identified.
The value comes from collecting the data at scale, applying a consistent classification methodology, and connecting the findings with the broader diligence.
For a deal team, workforce analysis can help answer questions such as:
- Is the company gaining or losing momentum?
- Which markets and functions are receiving the most investment?
- Is a competitor closing the organizational gap?
- Does the workforce support the company’s stated strategy?
- What capabilities is the company building?
- Is revenue growing faster or slower than the organization?
A company’s workforce cannot answer every diligence question. But it provides a frequently updated, independently observable view of how the company is actually being built.