Interesting research from the Business School @ Uni of East Anglia links higher Glassdoor rankings with higher share price. This backs up earlier research which examined the shareholder value impact of a firm’s inclusion in the ‘100 Best Places to Work for in America’ list compiled annually by the Great Place to Work Institute and published in Fortune magazine.
This earlier study revealed a significant positive market reaction on the day of the announcement, leading the authors to conclude that ‘ the marketplace believes that satisfied employees may lead to satisfied shareholders'.
Other studies have assessed the performance of a stock portfolio for firms included in the same list and found significant above average returns over a twenty-five-year period.
The takeaway from all of this? There's even more compelling business evidence to reinforce investing in (and measuring) employee experience.
A new study led by the University of East Anglia (UEA) using data from recruiting site Glassdoor has for the first time revealed a strong link between a satisfied workforce – in the form of higher Glassdoor company ratings – and the financial performance of UK companies. Researchers from UEA’s Norwich Business School have identified that having a one-star higher rating on Glassdoor is related to almost one per cent higher annual return on company assets, and that public companies experienced extra stock portfolio returns of up to 16 per cent per annum. The in-depth study, ‘Employee Satisfaction and Corporate Performance in the UK’, analysed 35,231 employee ratings from Glassdoor, one of the world’s largest job and recruiting sites, for 164 large UK companies2 between 2014-2017. The sample only included firms with a minimum of 100 reviews within this time period, with annual financial data obtained from Bureau van Dijk’s FAME and daily stock price and market index (FTSE 100) data gathered from Thomson Reuters Datastream.