�Work-family human resource initiatives�; sounds rather soft and fluffy, doesn�t it? Guess it does. It concerns stuff such as on-site childcare centres, flexible work arrangements, family stress initiatives and other such humbug.
Which tough, self-respecting corporation would want to be associated with that? Or should they� I guess it might actually help you become a more attractive employer, which should ultimately help your performance. Hey, even the stock market might appreciate such a thing, right?
Some time ago, Professor Michelle Arthur, from the University of New Mexico, set out to examine stock market reactions to the announcement of Fortune 500 firms adopting such work-family initiatives, which she collected from the Wall Street Journal. For example, one of them said �IBM began a childcare referral service for its employees� or �Procter & Gamble are broadening the scope of their family-friendly policies�, etc. She found 231 of them and then, for each of them, tested the stock market reaction to the announcement, through what in statistics is known as an �event study�.
The results were clear. In the early 1980s, the stock market would hardly react at all to such fluffy initiatives; if anything the effect of the fluffy announcement on a firm�s share price was slightly negative (-.35%). However, that changed quite a bit into the 1990s. When in that period firms would declare a work-family initiative, stock price immediately jumped up, with on average .48%. Now that may seem peanuts to you, but if you�re a $5 billion company, it means that even one such initiative would already immediately increase the value of your firm with 24 million. That�s a lot of peanuts. And a lot of share-holder value.
I�ve long thought that, for example, an investment bank which would be able to come up with a formula that enables people to have a real career without working 70 hours or even 5 days per week, should be able to turn that into a momentous competitive advantage in their industry (and it actually doesn�t seem that hard to do). But macho culture and self-delusion � and not much else � seems to always stand in the way of developing such a practice. What Michelle�s study suggests is that such firms are simply stuck in the 1980s; nowadays even the stock market recognises the sheer monetary value of work-family initiatives.
Time to wake up I�d say, and join the new millennium. Because if you don�t, you�re actually destroying shareholder value, and that�s not a very macho and serious thing to do now is it?