Ari Gold, of HBO's Entourage, once said, "Nobody is happy [...] except for the losers. Look at me, I'm miserable, that's why I'm rich". Though I tend to agree with Ari, a new study by the University of Pennsylvania's Wharton School of Business and published by Economist.com disputes Ari's quip on success.
According to the study, companies that were labelled "Best Company to Work For", by Fortune Magazine, provide better returns than the broader market. Alex Edmans, who conducted the study, says that Fortune's portfolio comprising of its 'best to work for' companies, has generated returns 4.1% higher than the CRSP Index, which includes all shares traded by the NASDAQ, the NYSE, and the AMEX.
In times of turmoil it is impossible to suggest that layoffs can be avoided. However, layoffs may be the catalyst to better things. An engineering friend with 12 years of experience at the same firm was let go recently, and he had some interesting insight into his predicament. He said, "I almost expected it, I don't really fit the culture anymore." Though competent and in demand (he would pick up a new job in less than a week), a new ownership team had come in last year that created friction with some employees. A wave of young, flexible, and eager graduates had been hired and slowly the 'old guard' was being removed. The young graduates were cheaper, more willing to take on new responsibilities, and more likely to act without much 'push-back'. The new ownership was essentially reinventing the identity of the company from the ground up, and for those who proved obstacles to the makeover, they were being removed.
Though it seems unfair, being laid off was the best thing that happened to my friend, "I noticed that I was getting lazy and bored,' he said '...complacent really" He was forced to leave a situation that made him frustrated for a new and challenging one that, more significantly, made him more productive.
Though qualitative and intangible, according to this study by Mr. Edmund there is a return on happiness. It may simply be the result of a proactive and energetic team, rather than a complacent and demoralized group, but a company that attracts and cultivates a happy group may be proving Ari wrong.