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ECSI: Proof That Engagement Pays Big Dividends

Wednesday, March 2, 2016   (0 Comments)

ECSI: Proof That Engagement Pays Big Dividends


The Engaged Company Stock Index shows that companies with high levels of employee, customer and community engagement financially outperform many of America’s biggest corporations. Yet, many companies have no engagement policies at all.

“Many companies aren’t aware that investing in employees and the community pays off in terms of value,” says Alex Edmans, Professor of Finance at the London Business School. “People still have the zero-sum mentality that a dollar given to employees is a dollar taken away from shareholders. So they try to invest as little as possible.”

Even managers who are aware of the benefits of investing in employees may not do so, because it only pays off in the long run, according to Edmans, who is currently on leave from the University of Pennsylvania’s renowned Wharton School. “Many managers are pressured to meet short-term earnings targets.”

The Engaged Company Stock (ECSI) reveals that, from Oct. 1, 2012, through Dec. 31, 2014, companies with high engagement scores outperformed all of the companies comprising the Standard & Poor’s 500 stock index by more than 22 percentage points.

The 45 companies with high engagement scores represent numerous industries and include Delta Air Lines, Nike, Hershey, General Electric and pharmaceutical giant Eli Lilly.

 

View the full article on www.enterpriseengagement.org

 


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