Companies that build a culture of health by focusing on worker safety and well-being may yield greater value for their investors. That's the key finding of a study published in the September 2013 issue of the Journal of Occupational and Environmental Medicine (JOEM), official publication of the American College of Occupational and Environmental Medicine (ACOEM).
The stock market performance of companies that had received ACOEM’s Corporate Health Achievement Award (CHAA), which annually recognizes the healthiest and safest companies in North America, was conducted at HealthNEXT LLC and analyzed by lead authors Raymond Fabius, M.D., and R. Dixon Thayer, and colleagues. According to ACOEM, companies that receive the award must be engaged in demonstrable and robust efforts to reduce employee safety and health risks.
Researchers found that award-winning CHAA companies outperformed the S&P 500. Four investment scenarios were created, using a combination of simulations and past market-performance to create investor portfolios for comparison. While the margin of return varied, CHAA recipients outperformed the market in each scenario, ACOEM reports. In the highest-performing scenario, CHAA companies had an annualized return of 5.23% vs. −0.06% for the S&P 500. In the lowest-performing scenario, CHAA companies had an annualized return of 6.03% vs. 2.92% for the S&P 500.
“Our results strongly support the view that focusing on health and safety of a workforce is good business,” the study's authors explain. “Engaging in a comprehensive effort to promote wellness, reduce the health risks of a workforce, and mitigate the complications of chronic illness within these populations can produce remarkable impacts on health care costs, productivity and performance.”
According to ACOEM, the authors acknowledge that the study focuses on a small sample for a limited number of years, adding that more research is needed before a strong causal relationship can be established between safety and health programs and market results. That said, the authors conclude that the study adds new evidence-based data to a growing body of literature that “healthy workforces provide a competitive financial advantage in the marketplace.”
A Blog From the American Society of Safety Engineers