Higher employee satisfaction improves financial performance for businesses, new study says

Online employee reviews can be used to predict a firm's financial performance, says Glassdoor

Happy workers make a difference (iStock)

Employee satisfaction improves the financial performance of companies, a new study suggests.

Research by jobs site Glassdoor found a strong link between a satisfied workforce and a firm's financial health.

The findings followed an analysis of more than 35,000 ratings on Glassdoor given by workers about their employers.

Glassdoor's chief economist Dr Andrew Chamberlain said: "These results are striking as they suggest online employee reviews can be used to predict a firm's financial performance and that there is a meaningful economic link between intangible company assets, such as employee satisfaction, and company performance in the United Kingdom.

"Employees are an important resource and not just a homogeneous cost of production.

"Tending to employees is like looking after your garden, helping them grow by giving them nutrients and an optimal environment can ultimately improve your yield."

George Daskalakis, finance lecturer at Norwich Business School, said the findings have “significant implications” for both managers and investors.

“There is clear empirical evidence to suggest that employers should adopt a human-centred approach to running a business”, he said. “

Though it’s to their advantage to do so, most investors in the market are still not accounting for the impact satisfied employees can have on improving business results when assessing and valuing stocks.”

PA