Although work-life balance (WLB) has been attracting increasing attention in recent years, there is a limited understanding of the relationship between these practices and firm financial outcomes. This paper aims to analyze the effect of WLB on corporate financial performance (CFP).
Leveraging employee ratings from Indeed.com, this research analyzes the WLB–CFP link through a longitudinal dataset encompassing diverse Spanish firms from 2012 to 2020, using panel regression for analysis.
The authors find a positive relationship between WLB and CFP, as indicated by the return on assets and return on equity.
The study, focusing on 26 companies from different industries in Spain, suggests potential for future exploration through larger samples and cross-country studies. Furthermore, the use of self-reported employee ratings as a data source necessitates careful consideration of subjectivity in the response process.
This evidence advocates for managerial endorsement of WLB schemes as a strategic lever for enhancing firm profitability.
The authors enhance the expanding literature on employee well-being by investigating the impact of WLB on corporate financial outcomes through a longitudinal framework. Moreover, this research contributes to the corporate social responsibility field by delving into the CSR-CFP connection, shedding light on the less examined pathways through which CSR activities, such as WLB, improve firm performance.
