DP19298 Optimizing the workplace: The interplay between working environment, corporate outcomes and employee well-being
Using large-scale employee surveys and register data from Denmark, we construct firm-level measures of the working environment capturing its physical, psycholog- ical, and social elements. Our analysis reveals that firms with superior working en- vironments perform better in unannounced, third-party job inspections conducted by a government agency. Additionally, these firms demonstrate higher profitability and enhanced innovation quality, as evidenced by patent citations and survey data. Further, leveraging official medical records, we find that employees in firms with better working environments are less likely to experience mental health issues, have fewer workplace accidents, and exhibit lower levels of absenteeism. Collectively, our findings support a synergistic perspective on stakeholder and investor objectives: improving the working environment does not create a trade-off between shareholder value and employee well-being but rather leads to higher gains for both parties.
