Can You Improve Your Company’s Stock Valuation with Wellness Programs?

Can You Improve Your Company’s Stock Valuation with Wellness Programs?

Companies looking to up their edge in 2016, take note: Three studies recently published in the Journal of Occupational and Environmental Medicine, official publication of the American College of Occupational and Environmental Medicine (ACOEM), found that those with “outstanding” employee health and wellness programs have stock valuations that outperform the S&P 500 (an American stock market index based on the market capitalizations of 500 large companies having common stock listed on the NYSE or NASDAQ).

These three papers reinforce what past studies have found — that healthier, happier employees net greater productivity and lower costs for the company.

The Health Project (THP), an organization that studies behavior change in the American health care system, conducted one of the three published studies. To do so, the group analyzed 26 publicly traded companies, which all received THP’s Koop Award for an outstanding wellness programs. When these Koop winners’ stock performances were tracked against the growth of the S&P 500, they beat the index fund. (To win the Koop designation, each program was dubbed a success in driving healthy employee behavior changes and health care savings.)

two women working together computer wellness programs

Better job satisfaction and higher employee engagement might help explain the better performance, THP said in a press release. But that’s not the whole story.

What Characteristics do Exceptional Wellness Programs Have?

The study authors note that wellness programs don’t automatically lead to improved financial performance. In order for a program to work, the company needs to have organizational structures in place to support healthy behavior change. A high rate of employee participation is also necessary, the study’s authors noted. A successful employee wellness program — in terms of business performance — also assumes that employees who feel their company cares about their well-being will be more motivated to perform at a high level and also remain with the organization longer.

All this is to say there’s no cause-and-effect relationship between wellness programs and stock performance. But the success of using healthy behavior change to create a healthier business does warrant further study, the researchers noted.

Another note: Companies rated as socially responsible — those with “company-sponsored programs that aim to improve the environment, the community, or the health and safety of workers” — also report healthy business performance, the same study found.

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