Fortune magazine has produced its annual 2009 “100 Best Companies to Work For” list. Despite the headline’s dangling preposition, the list is something that socially responsible investors should always check out. It includes many private companies, but the policies of those firms can give you a sense of what is possible in terms of employee relations.
The truth is companies that have a well-treated and happy workforce are usually successful businesses. Employees there are generally motivated, their creativity is stimulated and they work better in teams. The positive environment contributes to the health of the personnel – stress is a negative health factor – thereby helping to reduce absenteeism and increasing productivity. And it makes perfect sense that in difficult economic times, when the news is filled with stories of layoffs, business closings and bankruptcies, that morale will remain higher at companies where people enjoy going to the office,
In historic market declines even happy employees won’t be able to keep a company’s stock price from falling. Take NetApp, for example, number one on Fortune’s list. NetApp makes storage and data management products and has nearly 8,000 employees in the U.S. and overseas. According to Fortune the company's benefits include five paid days for volunteer work, $11,390 for adoption aid and autism coverage that’s been used by 43 employees since 2006 at a cost of about $242,500 to the company. “The company has gained market share during the slump, hasn't had layoffs, and has more than $2 billion in cash on hand to help it ride out the global financial crisis,” according to the magazine.
But even happy employees can’t keep a stock price up when the market tanks. Shares of NetApp fell from more than $25 per share last September to as low as $10.39 in November. Since then they’ve climbed back to the mid-$13 range.
A common characteristic of many of the companies on the list is their commitment to corporate social responsibility. Boston Consulting Group, ranked third, has a "social impact" program that targets global health issues. Number 34, Umpqua Bank in Roseburg, OR, offers paid time to its employees for volunteering in the community.