NEW YORK, February 5, 2016 - A new study finds companies with healthy workforces appear to have a competitive edge in the stock market. The study compared the stock market performance of ten of the healthiest companies in South Africa to the market at large. Nine different investment scenarios were tested and, in all nine scenarios, the healthy companies outperformed the Johannesburg Stock Exchange All Share Index. The study publishes online today in the February issue of the Journal of Occupational and Environmental Medicine (JOEM).
The new research comes on the heels of a trio of studies published in the January issue of JOEM that examine the stock prices of U.S. companies with high-performing employee health and well-being programs. All three studies found companies with best-in-class workplace health programs outperformed the Standard & Poor's index by 7 percent to 16 percent per year.
"Taken together, these four studies add to the growing mountain of evidence that workforce health is an important factor in the financial health of a corporation," said Daniel Malan, a lecturer at the University of Stellenbosch Business School, a consultant to Discovery Limited, and an author of the South African study. "Now that the connection has been made, employers can see that the decision to invest in the health of their employees is a decision associated with a healthy bottom line. Not only do employees benefit, but stockholders benefit as well."
Authors on all four studies are members of the Vitality Health Metrics Working Group, a group of health experts and corporate leaders that is calling for the voluntary public reporting of aggregated workforce health metrics. The group released a report during the World Economic Forum last month that provides a roadmap for corporations to include workforce health metrics in existing reporting platforms such as 10-K forms and annual reports.
"In order for corporations to achieve sustained success, they must focus on the day-to-day issues that are critical to progress, such as the health of their most valuable asset - their employees," said Derek Yach, chief health officer of Vitality and chair of the Health Metrics Working Group. "When workforce health metrics are publicly reported, improving the health of employees will become a priority for CEOs and boards of directors. When workforce health is a priority, it will improve."
A limitation of the research is the possibility of reverse causation, meaning financially successful companies can afford to spend money on programs that improve the health of their workforces. Also, the authors recommend the studies be reproduced with a larger sample size and a longer period under analysis.
This research was supported by a grant from Vitality, which is supported by Discovery Limited. The research was conducted independently without any interference from Vitality or Discovery and the authors declare no conflict of interest.
The Vitality Group is a member of Discovery Ltd., a global financial services organization offering an incentive-based health and well-being program to employers as part of their benefits program. With a foundation based on actuarial science and behavioral economic theory, Vitality encourages changes in lifestyle that reduce health care costs, both in the short run and long term, by rewarding members for addressing their specific health issues. Vitality well-being programs serve companies in a wide range of sizes and industries, improving individuals' health and wellbeing as well as employers' bottom lines.
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The Vitality Institute is an evidence-driven, action-oriented research organization dedicated to building a culture of well-being by promoting health and preventing chronic diseases. The Institute aims to unite leaders in the public and private sectors to transform evidence into action and build a culture of health. The Institute was founded in 2013 by the South African insurer, Discovery Limited, as part of its commitment to health promotion and well-being programs that advance social good.
For more information, visit http://www.