Looking after your employees is good for business as it can attract 35 per cent more investment from socially responsible funds, a study by an assistant professor of Warwick Business School has found.
Onur Tosun looked at 1,585 US corporations and 47 socially responsible investment (SRI) funds and found that the companies which treated their employees best had the most money poured into them.
The study focused on a host of indicators as to why SRI funds invest in various firms and found employee relations as the most important, and it was especially noticeable in the construction, transportation, financial sector and personal services industries – which cover anything providing a service for people from law and accounting to cleaners and beauty shops.
The increased investment makes sense as firms investing in their employees signal high corporate social responsibility (CSR), which in turn potentially enhances a firm’s reputation, Tosun noted. The results indicated that SRI mutual funds with high CSR sensitivity have distinctively higher ownership in firms when those companies improve CSR in employee relations.
This article was taken from here.