Workplace Wellbeing and Firm Performance
Jan-Emmanuel De Neve, Micah Kaats, George Ward
Abstract
This paper examines the relationship between employee wellbeing and firm financial performance, a topic that has long been of great relevance to both academic researchers as well as practitioners. We use novel large-scale data from \textit{Indeed}, a major jobs website, to assess the relationship between workplace wellbeing and firm performance. Our measures of employee wellbeing include self-reported job satisfaction, purpose, happiness, and stress, which we aggregate to over 1,600 listed companies in the United States. Using company-level employee wellbeing measures to predict firm performance, we find that wellbeing is associated with firm profitability. Overall, these descriptive results show a strong positive relationship between employee wellbeing and firm performance. This has key implications for the ways in which firms should treat their workers and, more broadly, for the role of human resource management in a firm's strategy. We discuss a number of limitations to the analyses and point to directions for further research.