By Jessica Grossmeier, Vice President of Research, HERO
The concept that good health is good business has been validated over the years by research linking health risk factors to higher employee health care costs, reduced on-the-job productivity and higher absenteeism. More recently, research has expanded its focus to overall well-being, with some studies showing a correlation between low employee well-being, higher turnover, lower employee engagement and lower employee performance. Now, the latest emerging body of research shows there may be yet another reason to invest in a healthy workforce: improved stock performance.
Earlier this year, three separate but related studies were published that demonstrate a correlation between a company’s approach to employee health and well-being and their corporate stock performance. One of those studies was conducted by the Health Enhancement Research Organization.
The HERO study revealed a distinct correlation between comprehensive, best practice wellness programs and corporate stock performance. More specifically, the study showed companies that scored highly on the HERO Health and Well-Being Best Practices Scorecard in Collaboration with Mercer® (HERO Scorecard) — which signals an investment in wellness best practices — outperformed the Standard & Poor’s (S&P) 500 Index over the course of six years.
The study, “Linking Workplace Health Promotion Best Practices and Organizational Financial Performance,” was published in the January issue of the Journal of Occupational and Environmental Medicine and tracked the stock performance of a portfolio of 45 publicly traded companies from 2009 through 2014 that earned top scores on the HERO Scorecard. The performance of these companies was compared to that of the Standard and Poor’s 500 Index (S&P 500) over the six-year study period.
Findings at a Glance
Findings indicate that companies who share the common practice of investing in workplace health and well-being represent superior investments in the marketplace. More specifically, researchers found that this simulated portfolio of companies outperformed the S&P 500 in the following areas: