Companies with healthy employees perform better in stock market

Highlighting health as an important factor in the financial health of a corporation, a study has found that companies with best-in-class workplace health programmes for employees are able to secure a competitive edge in the stock market.

The study compared the stock market performance of 10 of the healthiest companies in South Africa. Nine different investment scenarios were tested and, in all nine scenarios, the healthy companies outperformed the Johannesburg Stock Exchange All Share Index.

Previous studies linking the stock prices of US companies with high-performing employee health and well-being programmes found that firms with good workplace health programmes outperformed the Standard & Poor's index by 7-16 percent 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 South Africa's University of Stellenbosch Business School, and an an author of the South African study.

"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," Malan added.

Authors of all four studies were members of the Vitality Health Metrics Working Group, a group of health experts and corporate leaders that is calling for the voluntary public reporting of aggregated workforce health metrics.

"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," said Derek Yach, chief health officer of Vitality and chair of the Health Metrics Working Group.

The study findings were published in the February issue of the Journal of Occupational and Environmental Medicine (JOEM).