In this two-minute video, Henry Stewart explains the financial evidence and academic research behind happy workplaces. The Best Workplaces have a Four Factor Alpha of 3.5% on the stock market, compared to ordinary workplaces. Plus, happy workplaces save lives – for every 96 deaths in a happy and engaged hospital, 103 people die in a hospital where staff are disengaged and unhappy.

“There is hard evidence for creating a happy workplace. A guy called Alex Edmans at the Wharton Business School decided to look at the Great Places to Work and compare them to the ordinary places to work, ie the companies that had been in the Fortune Top Best Workplaces over 25 years. He compared them with the standard stock market index. He found that the Best Workplaces had a Four Factor Alpha of 3.5%.

“What it means, is 3.5% extra per year compared to the standard stock market. That means is that if you had a personal pension fund and you’d invested in the standard stock market, and at the end of 25 years it was worth £100,000, if instead you had put it in one of the Great Workplaces, re-investing each year as you could have done, it would have been worth £231,000. That is the hard, financial difference.

“Now you might wonder then, why people don’t invest in great workplaces? Well, there is one fund, the Parnassus Endeavour Fund, which decided 13 years ago when it was set up to invest in happy workplaces. It had $600,000. It now has $1.4bn and has been ranked over the last ten years in the top 1% of performance in the entire United States – which begs the question why more investment funds don’t do it, because the proof is there – the academic research is there, the financial evidence is there.

“And it’s not just true in the private sector. This is from hospitals. The King’s Fund, which is a UK research organisation which looks at health, looked at mortality rates in hospitals where staff were highly engaged and happy, and where they were disengaged. For every 96 people that die in a hospital were staff were engaged and happy, 103 die in a hospital where staff are disengaged and unhappy.

“Happy workplaces save lives – and if you’re sick, make sure you go to a happy hospital!”

Henry was speaking at the 2017 Beyond Budgeting Conference in London. Click here to view more videos, PowerPoint and blogs from the event.

Henry is Founder, CEO and Chief Happiness Officer at Happy Ltd. He has written two books about how to create a happy workplace: Relax: A Happy Business Story and the Happy Manifesto. Henry has been included in the Guru Radar section of the Thinkers50 list of the most influential business thinkers in the world. He speaks regularly at conferences around the world, as well as helping organisations through consulting and training how to change their culture and create a happy workplace of their own.

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