Update: Employee Well-Being helped organizations survive COVID, return to higher performance, and return higher earnings on the stock market.
Fresh off the press, the University of Oxford Well-being Research Department has released an update on the most significant and convincing macro business case for the importance of hashtag#WorkplaceWellBeing on organizational success.
Since 2019, Employee well-being has been an incredible predictor of organizational success and resilience to the COVID-19 pandemic and returned 18% more to stock market investors than the SP500 and Nasdaq100 or Dow.
"We find that higher levels of well-being generally predict higher firm valuations," claims the paper's authors. "Higher return on assets, higher gross profits, and better stock market performance."
The findings represent an update from the ongoing longitudinal study started in 2019. Here are some more detailed highlights of the most statistically relevant (p<.01) results:
Overall Company Performance: The study uses an employee well-being index of happiness, sense of purpose, job satisfaction, and average stress level. The well-being index positively predicts Organizational Profit, Return on Assets, and Firm Value.
Protected Against COVID: When comparing pre to post covid results, average employee happiness predicted the firm's ability to weather the pressures of the pandemic while experiencing the most negligible negative effect and returning to higher performance faster.
Stock Market Performance: Using an annual index of the top 100 "Highest Well-being Places to Work" to guide an investment strategy, The Index outperformed the SP500, Dow and Nasdaq100 by both minimizing downside risk during downturns and generating an average of 18% higher returns.
Importantly, data are never perfect nor is any study. This study used data collected through Glassdoor, but the standardization, size of the response set and overall power of the data combined with the controls applied in the analysis, address most of the common objections made against studies of this nature.
The complete report is 40 pages (with ten pages of references) and is worth reading in its entirety. You can find it here:
Shout out to the entire department supporting this work and those leading the effort, Jan-Emmanuel De Neve, Micah Kaats, and @George Ward. We'll be watching and anxiously awaiting your continued updates.