Machine Learning Framework for Multi-Level Classification of Company Revenue

Abstract

The planning and execution of a business strategy are important aspects of the strategic human resource management of a company. In previous studies, machine learning algorithms were used to determine the main factors correlating employees with company performance. In this study, we introduced a method based on machine-learning algorithms for the classification of company revenue. Both annual and integrated datasets were examined to evaluate the classification performance of the framework under both binary and multiclass conditions. The performance of the proposed method was validated using six evaluation metrics: accuracy, precision, recall, F1-score, receiver operating characteristic curve, and area under the curve. As the experimental results indicate, the XGBoost classifier displayed the best classification performance among the three algorithms (XGBoost classifier, stochastic gradient descent classifier, and logistic regression) used in this study. Moreover, we confirmed the important features of the trained XGBoost model in accordance with variables focusing on human resource management studies. These results demonstrate that the proposed framework has strength in terms of both classification and practical implementation. This study provides novel insights into the relationship between employees and the revenue levels of their employer.