Creating a work environment in which employees choose to engage directly impacts the bottom line. Companies who treat employees well have returns at least 4 percent better than the S&P Index, year after year.
That’s a bold statement to make, yet the results are proven directly in the U.S. stock markets. Companies in the Parnassus Workforce Fund (as explained in this Fast Company article) include many of the “100 Best Companies To Work For” as well as others that “genuinely cared about their employees as people, not just hired hands.”
The results are indisputable In eight years, the fund has had a 9.63 percent annualized return (as compared to the S&P Index earnings of 5.58 percent in the same period).
Moreover, the story noted:
Another compelling statistic buried in the Parnassus prospectus: Over the past five years — the height of the Great Recession — the average annual return on the Workplace Fund was an incredible 10.81 percent. The S&P Index for the same period was just 3.97 percent, a 6.84 percent difference.
[James] Dodson, [founder of Parnassus Investments and portfolio manager of the Parnassus Workplace Fund], believes the wide gap in performance is easily explained: ‘I think what happens when you have a contented workplace, people are willing to put out more effort to improve operations during really difficult times. While I think every organization has their ups and downs, the downs are not as pronounced because everybody pulls together to try to get through the crisis. And, of course, this consistently more engaged performance inevitably reveals itself in the firm’s bottom line.’ ”
Employee engagement matters. Caring about employees as people and not just human resources makes a tremendous difference to organization success. What can you do?
Do you believe in the power of employee engagement to drive bottom-line results?
You can find more from Derek Irvine on his Recognize This! blog.
