Best companies to work for profit from it, finds Deloitte

Manufacturing News, Source : The Manufacturer US
Zone : Leadership and strategy
Published : 15 Mar 2007 12:25

New York – March 13, 2007 -- In a study of the 2007 Fortune “100 Best Companies to Work For” list, Deloitte & Touche USA LLP (Deloitte & Touche USA), one of the nation's leading providers of professional services, found that companies on the list outperformed the S&P 500 in total shareholder value return over a 10-year period, 18.9 percent to 8.4 percent.

“You can make the connection that if the companies on the list are making smart investments in their people, then they are also making smart investments in other areas of their business,” according to Bob Dalton, a principal with Deloitte Consulting LLP and a leader of the firm’s shareholder value initiative.

Deloitte & Touche USA’s analysis found that the “100 Best Companies to Work For” (Best Companies) consistently and significantly beat the S&P 500 over three-, five-, and 10-year periods. While the Best Companies did not outperform the S&P last year, 2006 was an exceptionally strong year for the S&P, and long-term comparisons are more appropriate because they eliminate short-term volatility in the market, according to Dalton.

As a result, companies that invest in their people not only benefit the employees, but the shareholders as well.

“For companies to truly create shareholder value, they must connect an individual employee’s actions with what drives value,” said Dalton. “We believe linking rewards and recognition to measures that are aligned to the company’s strategy is a critical results factor.”

Comments on this story

click here to add a comment