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Do healthy employees deliver a healthy bottom line for corporate America? This question has been hotly debated over the years, and a new study from the nonprofit Health Enhancement Research Organization (HERO) suggests a correlation between comprehensive, best-practice wellness programs and corporate stock performance.
The study found that companies that scored high on HERO’s scorecard for employee health and well-being practices (compiled with HR consultancy Mercer) outperformed the 500 largest U.S. companies listed on the Standard & Poor’s 500 Index over a six-year period, which suggests that effectively run companies share a common practice of investing in workplace health and well-being.
The study, “Linking Workplace Health Promotion Best Practices and Organizational Financial Performance,” published in the January issue of the Journal of Occupational and Environmental Medicine, tracked the stock performance of 45 publicly traded companies that earned top scores on the HERO scorecard. From 2009 through 2014, these companies:
• Appreciated 235 percent compared with 159 percent for the S&P 500 companies overall.
• Produced a comparable dividend yield of 1.97 percent by the end of the study period, compared with a 1.95 percent yield for the S&P 500.
“Will this study put an end to questions about how much of a return on investment to expect from corporate wellness? Probably not,” said Paul Terry, president and CEO of HERO, based in Edina, Minn. “But what this study does tell us is that there is a compelling correlation between companies that deliver strong financial returns and those that have documented, best-practice wellness programs. This knowledge can benefit business leaders looking for a competitive edge.”
“There is increasing evidence that companies that are recognized for their efforts to keep their workforces healthy, safe and well can create a competitive advantage in the marketplace,” said study co-author Ray Fabius, co-founder of HealthNEXT, a Philadelphia-based health research consultancy.
According to Terry and Fabius, the findings support the proposition that better employee health is linked to higher productivity and performance, and add to the emerging evidence that healthier employees are more engaged with their work and have lower turnover rates.
Given the challenges of showing that wellness programs produce a sustained return on investment through a reduction in health claims cost, proponents of wellness initiatives are increasingly pointing to the indirect benefits of these programs.
Companies that scored high on the HERO scorecard reported adhering to common best practices, including strong strategic planning, senior leadership engagement and cultural support for health, a rich and comprehensive set of programs that meet a diverse spectrum of health needs, and robust program evaluation and performance reporting.
Stephen Miller, CEBS, is an online editor/manager for SHRM. Follow me on Twitter.
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