Improve Financial Performance

Research shows that companies can reap significant financial gains by developing employee-friendly work customization practices and policies.

• A study of 5500 employees in 100 organizations found a direct correlation between worker satisfaction and a firm profitability.

• One study found companies with highly committed employees had a 112% return to shareholders over three years (while companies with average commitment had only 90 percent, and companies with low commitment only 76 percent).

• Watson Wyatt study found a 3.5 percent rise in shareholder returns resulting from flexible work practices.

• Standard & Poors firms that emphasized quality of work-life for employees had higher sales growth and return on asset growth over a five year period.

• Companies recognized as the “best places to work” (by Fortune, Great Places to Work, Working Mother, and other raters) have better financial results than their counterparts in the broad market indexes such as the S&P 100 and S&P 500. What makes them “great places” varies from survey to survey, but there is a consistent theme of providing supportive, flexible, results-oriented work environments that account for employees’ off-the-job lives with customizable work-life programs and benefits.

• Work-life support enhances shareholder return in Fortune 500 companies. A study of firms announcing work-life enhancements found share price jumped .36 percent on the day of the announcement and .39 percent over the next three days.

• According to a study by Corporate Voices for Working families, companies with double digit growth had 39 percent more highly engaged employees (and 45 percent fewer highly disengaged employees) than single-digit growth companies.

• Firms that offered paid family leave had 2.5 percent higher profits than firms that did not.

• An entire program of research by scholars Huselid and Becker show that high-performance work practices increase productivity, reduce turnover, thereby leading to increased market share and profits. They have studied thousands of companies of different sizes across industries. Their research finds that the strongest improvements in market performance come from businesses which regard their work force as a strategic asset, rather than a cost to be minimized.

• In a fascinating study of 527 business firms, Perry-Smith and Blum examined the effect of firms offering customizable clusters of policies to help employees integrate work and life priorities. The clusters included things like offering leaves for traditional family care versus less traditional care, onsite childcare, and flexible scheduling, depending on what the person needed. People in the study said that the business’s performance was higher in firms that offered high offerings of the work-life policies that could the “clustered” for a personal fit. Being willing to invest in employees by connecting them with their families and their families to the business represents, the authors argue, a “fundamental paradigm shift” toward greater trust in the workplace.

What people need to soar at work is ways to customize their work demands and responsibilities with outside life commitments. Firms need it to reap the rewards of greater productivity, cost reduction, improved customer service and market share, enhanced reputation, and ultimately financial performance.