New research reveals link between employee satisfaction and the financial performance of UK companies

A research study led by the University of East Anglia’s Norwich Business School has revealed a strong link between the financial performance of a UK company and the satisfaction of its employees.

The study analyzed 35,231 Glassdoor ratings for 164 large UK companies, posted between 2014-2017.

To understand the financial success of each of these companies, the researchers used financial data from Fame, our comprehensive database of companies in the UK and Ireland. They also analyzed data from Thomson Reuters. 

The results

The research study found that:

• firms rated higher by their current employees in terms of satisfaction achieve superior profitability compared to those rated lower
• having a one-star higher rating on Glassdoor is related to almost one percent higher annual return on company assets
• public companies experienced extra stock portfolio returns of up to 16 % a year

Dr. Andrew Chamberlain, Glassdoor’s chief economist, said: 

“These results are striking as they suggest online employee reviews can be used to predict a firm’s financial performance and that there is a meaningful economic link between intangible company assets, such as employee satisfaction, and company performance in the United Kingdom.”

Download the full paper, Employee Satisfaction and Corporate Performance in the UK, to read the full report