A couple of weeks ago, I shared Alex Edmans´ studies on how the “Best Companies to work for” in the U.S. outperform their competitors on the stock market. Now here comes another piece of compelling evidence for the idea that treating your employees exceptionally well is not a cost factor, but rather gives your company an edge pertaining to financial performance. For a study published in the Journal of Occupational & Environmental Medicine, a group of researchers compared the stock market performance of companies that were awarded the “. Everett Koop National Health Award”(a prestigious award for companies running outstanding employee health programs named after a former Surgeon General) with the average performance of companies comprising the Standard and Poor’s (S&P) 500 Index. What they´ve found:
The Koop Award portfolio outperformed the S&P 500 Index. In the 14-year period tracked (2000–2014), Koop Award winners’ stock values appreciated by 325% compared with the market average appreciation of 105%.
The researchers conclude that “this study supports prior and ongoing research demonstrating a higher market valuation – an affirmation of business success by Wall Street investors – of socially responsible companies that invest in the health and well-being of their workers when compared with other publicly traded firms.”
Image via Gratisography