People, a good investment
Laurie Bassi is a rare individual. Research convinced her that companies that invest in their people just had to do better than penny-pinchers that cut training and payroll the moment the economy sours. She invested in a portfolio of stocks of companies that invest heavily in their people. The returns are "in line with a growing body of empirical research showing that organizations that make extraordinary investments in people often enjoy extraordinary performance on a variety of indicators, including shareholder return."
March 2004
How's Your Return on People?
Companies that invest in employee development can outperform the market. Just ask their shareholders.
by Laurie Bassi and Daniel McMurrer
"For years now, our research has measured the effect of spending on employee education and training—a “cost” that is buried in general and administrative expenses—on the stock prices of 575 publicly traded firms."
Every year for three years, Laurie and Daniel selected a portfolio of 20 to 40 companies that spent at least twice as much as their peers to develop their human resources. In 2003, these heavy investors in human resources outperformed the S&P by 17% to 35%.
Laurie Bassi (lbassi@knowledgeam.com) is the chairwoman and Daniel McMurrer (dmcmurrer@knowledgeam.com) is the chief research officer at Knowledge Asset Management, a money management firm in Bethesda, Maryland.
Posted by Jay Cross at March 21, 2004 05:16 PM | TrackBack
