HR Leaders: How Well-Being Data Predicts Stock Market Performance
Photo by @anniespratt on Unsplash
HR leaders often struggle to secure budget for wellbeing programmes. Employee satisfaction. Engagement scores. Qualitative feedback. And I have watched CFOs nod politely whilst mentally calculating the cost per head.
Then I discovered research that fundamentally changed the conversation. It turns out workplace Well-Being is not just correlated with business performance. It predicts it.
The insight that should terrify (and excite) every CFO
Here is what most HR leaders do not know: workplace wellbeing is a leading indicator of stock market performance, Researchers at Oxford and Harvard analysed over 15 million employee surveys across 1,600 US public companies. What they found should fundamentally change how we talk about Well-Being investment. Companies with the highest Well-Beingscores did not just perform better, they predict ed market performance before it happened.
Wellbeing data from 2020 accurately predicted stock returns in 2021. Wellbeing data from 2021 predicted performance during the 2022 bear market. The pattern held through both bull and bear markets.
If you had invested $1,000 in the top 100 wellbeing companies in January 2021, you would have had $1,300 by March 2023, compared to $1,100 if you had invested in the S&P 500.
That is a 20% outperformance. Not because of balance sheets or quarterly earnings. Because of how people felt at work.
Your practice starts here. The next time someone asks you to prove wellbeing ROI, start with this: we are no longer talking about a "nice-to-have." We are talking about a metric that predicts shareholder value.
How Well-Being predicts performance (the six pathways)
The Oxford research identified six pathways through which employee wellbeing translates into firm performance. These are not theoretical, they are observable, measurable mechanisms:
• Productivity: Happier employees deliver measurably higher output. The research shows improvements in sales conversion rates, calls per hour, and schedule adherence. This is not about working harder. It is about working with focus, energy, and cognitive clarity.
• Relationships: Well-Being enhances collaboration. Employees with higher wellbeing scores develop more supportive relationships with colleagues, show higher abilities to cooperate, satisfy customers more effectively, and excel in negotiations. When people feel good, they connect better.
• Creativity: A positive mindset unlocks innovation. The research shows that happier employees demonstrate greater mental flexibility and broader awareness, allowing them to make novel connections and generate inventive solutions. Stressed employees solve problems. Thriving employees reimagine them.
• Health: This pathway creates a virtuous cycle. Happier employees experience reduced burnout, lower levels of depression and distress, and better overall physical health. The result is reduced healthcare costs, fewer sick days, and sustained performance over time.
• Recruitment: Workplace Well-Being has become a crucial factor in attracting talent. The research shows employees increasingly prioritise work autonomy, job security, flexibility, and organisational purpose over financial compensation alone. Companies known for wellbeing have a competitive advantage in talent markets.
• Retention: Perhaps most critically, Well-Being reduces turnover. The cost of replacing an employee ranges from 50-200% of their salary. When wellbeing drives retention, the financial impact compounds rapidly.
The Disconnect between Belief and Action
Here is the uncomfortable truth: executives already believe this. According to the Oxford research:
“87% of executives and managers agree that improving workplace wellbeing gives them a competitive advantage.
But only 19% say wellbeing is a strategic priority in their organisation.”
Professor Jan-Emmanuel De Neve, the study's lead author, calls this the "fluffiness problem." In the C-suite, leaders struggle with what they perceive as subjective measures. They want hard KPIs. They resist self-reported data.
But here is what the research proves: these "subjective" measures of how people feel at work relate directly to objective outcomes. A one-point increase in employee happiness (on a 1-to-5 scale) is associated with a $2-3 billion increase in annual profit for large firms.
That is not fluffy. That is predictive.
The Oxford data proved particularly compelling because of its scale and methodology. Over 1 million employee surveys were aggregated to company level and matched with financial data from Compustat. The researchers measured four dimensions: happiness, purpose, satisfaction, and stress. Together, these create a composite wellbeing score that consistently predicted firm profitability, company valuation (Tobin's q), and stock market returns.
What Makes this Research Different
Previous studies have shown correlations between employee satisfaction and business outcomes. But the Oxford research went further. It demonstrated predictive power.
The Financial Times called it "the clearest link yet" between employee Well-Being and financial performance among quoted US companies. Professor De Neve explained: "The strength of the correlation of Well-Being with the stock market was the most exciting because it is predictive. Well-Being data in 2020 successfully predicted stock market performance in 2021. The predictive power of these wellbeing reports seems to suggest that stock markets underestimate the value of intangibles such as how employees feel at work."
This changes everything. We are no longer arguing that Well-Being matters in principle. We are demonstrating that it matters in practice, and that it matters before the market has priced it in.
The Cost of Ignoring this Evidence
What happens to organisations that dismiss Well-Being as "soft"? The Oxford research suggests they are leaving money on the table. More specifically, they are leaving shareholder value on the table.
If Well-Being data in 2020 predicted stock performance in 2021, then organisations measuring and acting on Well-Being data today are positioning themselves for competitive advantage tomorrow. Those who are not measuring it are flying blind.
The research showed this pattern held across market conditions. During the sustained growth of 2021 and the prolonged decline of 2022, high-Well-Being companies outperformed. This is not a bull market phenomenon. It is a structural advantage.
Your Self-Insight
• When you present Well-Being initiatives to executives, do you position them as "employee benefits" or as "leading indicators of firm performance"?
• If Well-Being data predicted your organisation's market performance six months from now, would your current measurement approach capture it?
• What would change in your organisation if the board considered wellbeing scores as seriously as quarterly earnings?
Your practice starts here. No need to apologise for Well-Being being subjective. The Oxford research proves it predicts objective outcomes that analysts, investors, and boards care about deeply. The only thing that is soft is our willingness to make this case with precision.
If you are ready to position Well-Being as a strategic advantage rather than an HR programme, follow me on LinkedIn, and visit The Self-Science Lab for more info.
Lauren Cartigny, Leadership Trainer, Executive Coach and Mindfulness Practitioner
Following a successful international corporate career in Sales for leading Tech firms, Lauren faced an unexpected burnout, life and health crisis. After re-building her life, transforming her career, and healing her body, heart and mind, Lauren has created transformative coaching and training programs to teach High-Performance from a place of Well-Being to prevent burnout, and employee churn in organisations.