Employee-Friendly Companies and Work-Life Balance: Is There an Impact on Financial Performance and Risk Level?

Abstract

Companies and individuals are increasingly concerned about employee-friendly work environments and work-life balance. Past research shows that employee-friendly work environments and particularly work-life balance contribute to employee satisfaction. The present study addresses two important related research questions. First, while employee-friendly companies may have greater worker satisfaction, do employee-friendly companies have superior financial performance? Second, do employee-friendly companies have lower levels of risk? Results of our analysis indicate that employee-friendly companies, compared to other companies, do indeed have better financial performance and lower risk levels. This is an important finding, as it affirms corporate efforts to offer employee-friendly work environments, including facilitating work-life balance for employees. Such efforts pay off, not only with worker satisfaction, as demonstrated in prior studies, but also as shown in this study, with improved company financial performance and risk level.

Keywords: employee-friendly, work-life balance, financial performance, risk

JEL Classification: J12, J16, J28, M00, M12, M4, M51