Companies with healthy employees have edge in stock market: Study

Companies with best-in-class workplace health programmes may have a competitive edge in the stock market, a new study has found. The study compared the stock market performance of ten of the healthiest companies in South Africa to the market at large.

Nine different investment scenarios were tested and, in all nine scenarios, the healthy companies outperformed the Johannesburg Stock Exchange All Share Index. The new research comes on the heels of a trio of studies, published last month, that examined the stock prices of US companies with high-performing employee health and well-being programmes.

All three studies found companies with best-in-class workplace health programmes outperformed the Standard and Poor's index by 7% to 16% per year.

"Taken together, these four studies add to the growing mountain of evidence that workforce health is an important factor in the financial health of a corporation," said Daniel Malan, a lecturer at the University of Stellenbosch Business School in South Africa.

"Now that the connection has been made, employers can see that the decision to invest in the health of their employees is a decision associated with a healthy bottom line. Not only do employees benefit, but stockholders benefit as well," he added.

"In order for corporations to achieve sustained success, they must focus on the day-to-day issues that are critical to progress, such as the health of their most valuable asset - their employees. When workforce health metrics are publicly reported, improving the health of employees will become a priority for CEOs and boards of directors. When workforce health is a priority, it will improve," Malan said.

The study was published in the Journal of Occupational and Environmental Medicine.