How Being on Glassdoor’s Best Places to Work List Pays Off

Three studies demonstrate clear connections between how satisfied people are at work — voiced in Glassdoor reviews — and their employer’s real-world financial performance.

Lesson 1: The Power of Employees’ Positive (or Negative) Thinking

Your employees know about the true culture at your company. These factors affect your business performance, and employees are surfacing relevant reviews on Glassdoor.

The study: A July 2017 study from four researchers at Georgetown, Emory, Baruch College and University of Hong Kong, explored the relationship between crowdsourced employer reviews and stock returns based on over one million employee reviews for more than 1,200 hundred companies.1

They found: Evidence of a strong relationship between changes in employee satisfaction and stock returns. Companies with Glassdoor ratings that rise quarter-to-quarter outperform companies with declining Glassdoor ratings by an overwhelming 0.74 percent per month during the following quarter.

WHAT IT MEANS FOR YOU:
  • Employees know which aspects of business matter most to the bottom line — and those themes shine through in Glassdoor reviews.
  • Because they’ve been shown to be a good predictor of business performance, it’s wise to pay attention to Glassdoor ratings.

Lesson 2: Online Reviews: The Crystal Ball for Your Financial Future

Culture isn’t going to impact your business overnight. But over years, research shows a clear link between employee satisfaction and long-term equity performance for companies.

The study: Researchers at University of East Anglia in Norwich, UK studied the relationship between employee satisfaction and long-run equity returns using an extensive dataset of employees’ online reviews for U.S. public firms posted on Glassdoor over seven years (2009–2016).2

They found: The study found that a portfolio of companies with higher employee satisfaction on Glassdoor significantly outperformed the overall stock market, earning 1.35 percent extra returns above the market over the period they studied.

WHAT IT MEANS FOR YOU:
  • Satisfied employees are a key asset and the biggest driver of your company value over a sustained period of time.
  • Glassdoor data can be an early performance indicator and a good barometer of long-term success.

Lesson 3: Being a Best Place to Work Isn’t Just About the Award

Any Best Places to Work company will tell you it’s great to win. You get great publicity, happy employees and proud leaders. But once the applause dies down, what’s the lasting benefit?

The study: Our Economic Researchers looked closely at Glassdoor ratings and the performance of companies who were Best Places to Work winners.3

They found: Best Places to Work companies outperformed S&P500 by an average of 122%, while the lowest rated companies underperformed S&P 500 by 29.5%.

WHAT IT MEANS FOR YOU:
  • Widespread positive opinion of your company influences healthy talent attraction.
  • Transparency facilitated by Glassdoor improves your ability to attract highly informed, quality candidates.
  • Being on the Glassdoor Best Places to Work list has lasting positive impact on business.

Citations

1. Source: Green, T & Huang, Ruoyan & Wen, Quan & Zhou, Dexin. (2017). Wisdom of the Employee Crowd: Employer Reviews and Stock Returns. SSRN Electronic Journal. 10.2139/ssrn.3002741;
2. Source: Efthymia Symitsi, Panagiotis Stamolampros, George Daskalakis, Employees’ online reviews and equity prices, Economics Letters, Volume 162, 2018, Pages 53-55, ISSN 0165-1765, https://doi.org/10.1016/j.econlet.2017.10.027;
3. Source: “Does Company Culture Pay Off? Analyzing Stock Performance of ‘Best Places to Work’ Companies” by Andrew Chamberlain. March 2015.