Job satisfaction, management sentiment, and financial performance: Text analysis with job reviews from indeed.com

Abstract

Employee job reviews contain information on many firm characteristics that are unobservable to those outside the company. Job review sites such as Glassdoor and Indeed are used by job hunters and current employees to inform each other of prevailing workplace culture. This paper collects over 1.2 million job reviews from Indeed.com. Machine learning and natural language processing methods are used to obtain qualitative data about firms through employees’ sentiment regarding company management. This paper seeks to quantify how employees’ sentiment affects firms’ financial outcomes. By matching review data with firm level financial data, the analyses find that a 1% increase in ratings increases market value by approximately 0.68-0.73%, revenue by 0.62-1.01%. However, increases in management sentiment may have a non-monotonic effect on financial performance, demonstrating that trade-offs are inherent in balancing financial results and employees’ satisfaction regarding their roles.