2304 | Workplace Wellbeing and Firm Performance

Jan-Emmanuel De Neve, Micah Kaats and George Ward

We use novel large-scale data crowdsourced by 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 1,782 publicly listed companies in the United States using data from around 1 million employee surveys across these organizations. Using company-level employee wellbeing measures to predict firm performance, we show that wellbeing is associated with firm profitability and firm value. We find that an investment portfolio of companies with high levels of workplace wellbeing also outperforms standard benchmarks in the stock market. Overall, these descriptive results show a strong positive relationship between employee wellbeing and firm performance. We discuss how these analyses contribute to this growing area of research, highlight a number of limitations, and point to future directions for further research.

Note: A version of this working paper was first published in May 2023.