Each and every year, business resources such as Fortune and Glassdoor.com release their own individual lists of the world's leading employers, using employee feedback to determine an individual company's rating and its overall standing within the employment market. To many, these lists are fairly frivolous, offering little more than brief novelty value and a tenuous insight into the realities of working life.

This is a shortsighted opinion, however, as these lists actually provide genuine insight into economic factors such as specific industry growth, job market stability and even the performance of individual stocks and shares. In fact, there appears to be a growing correlation between a company's stock price and the esteem in which it is held by employees and consumers alike.

Google: Climbing a Constant Upward Spiral
According to Fortune's 2012 list of the top 100 global employers, Google (Nasdaq:GOOG) now stands alone as the single most respected. With 18,500 U.S. employees, it is certainly playing a pivotal role in driving the economy, while annual job growth of 33% has distinguished it as one of the most prosperous international corporations. While these factors have helped to establish a foundation for continued financial success, it is Google's approach to engaging, motivating and rewarding staff that has seen it emerge as the world's most revered employer.

It is no coincidence that the brand's ascent as a leading employer has coincided with an improved share price performance, as Google's well-defined and empowering culture continues to earn the trust of investors and independent traders. With its shares scaling the $700 benchmark earlier this month for the first time since 2007, there is a clear relationship between Google's drive to create a people-friendly work environment and the way in which the firm is perceived as a profitable investment opportunity.

Procter and Gamble: A History of Sustained Growth and Excellence
Multinational brand Procter and Gamble (NYSE:PG) is another firm whose excellence as an employer is reflected in the performance of its stocks and shares. Ranked by Glassdoor.com as one of the top 25 places to work in 2012, it also stands as an organization that has achieved outstanding and sustained dividend growth rates over the last 25 years. While this progress has been checked slightly in recent times by cash flow production issues, the brand has still sustained an 11% dividend growth rate since 2003.

In terms of its appeal as an employer, Procter and Gamble has created a culture of empowerment and responsibility that rewards staff members who are willing to invest time and effort into their careers. Perhaps even more importantly than this, the firm is also founded on the underrated values of respect and integrity, which means that both employees and consumers are afforded outstanding benefits through their affiliation with the company. This people-oriented philosophy has been the driving force behind Procter and Gamble's continuous and steady growth, both as a business and a blue chip investment option.

Chesapeake Energy: Adapting to Volatile Markets
Already renowned as a producer of natural gas and energy, Chesapeake Energy (NYSE:CHK) has also climbed into the top 20 of Fortune's leading employer list for 2012. This ascent has been based on far more than a simple rise in the demand for natural energy sources, however, with the firm's commitment to continual innovation and evolution absolutely central to its resolute growth. The most recent manifestation of this philosophy came with the development of a 63,000 square foot childcare center, which has been designed with the purpose of helping employees balance their professional and personal lives.

This action is typical of Chesapeake Energy and displays the firm's willingness to respond to potential issues with the creation of an innovative solution. The same ethos has also helped the company maintain a strong share price performance in 2012, despite the significant issues that were posed by a fall in gas prices during the second financial quarter. After the individual share price tumbled to just $14 in May, the firm responded by moving away from its dry gas business and placing an increased emphasis on oil and NGL production. This has seen the share price reach an estimated $21 during this quarter.

The Bottom Line
While the correlation between a firm's standing as an employer and its individual share price hardly constitutes an exact rule, organizations that display a willingness to empower their staff appear far more likely to achieve wider stock market success. The reasons for this are numerous, but the influence of a well-defined culture, strong underlying values and a flexible business model remain pivotal to satisfying both employees and investors alike.

At the time of writing, Lewis Humphries did not own shares in any of the companies mentioned in this article.

Related Articles
  1. Stock Analysis

    Analyzing Altria's Return on Equity (ROE) (MO)

    Learn about Altria Group's return on equity (ROE) and analyze net profit margin, asset turnover and financial leverage to determine what is causing its high ROE.
  2. Investing News

    Icahn's Bet on Cheniere Energy: Should You Follow?

    Investing legend Carl Icahn continues to lose money on Cheniere Energy, but he's increasing his stake. Should you follow his lead?
  3. Stock Analysis

    Analyzing Google's Return on Equity (ROE) (GOOGL)

    Learn about Alphabet's return on equity. How has its ROE changed over time, how does it compare to its peers and what factors are driving ROE for the company?
  4. Investing News

    Is Buffett's Bet on Oil Right for You? (XOM, PSX)

    Oil stocks are getting trounced, but Warren Buffett still likes one of them. Should you follow the leader?
  5. Investing News

    Chipotle Served with Criminal Probe

    Chipotle's beat muted expectations and got a clear bill from the CDC, but it now appears that an investigation into its E.coli breakout has expanded.
  6. Stock Analysis

    Analyzing Sprint Corp's Return on Equity (ROE) (S)

    Learn about Sprint's return on equity. Find out why its ROE is negative and how asset turnover and financial leverage impact ROE relative to Sprint's peers.
  7. Stock Analysis

    Why Alphabet is the Best of the 'FANGs' for 2016

    Alphabet just impressed the street, but is it the best FANG stock?
  8. Investing News

    A 2016 Outlook: What January 2009 Can Teach Us

    January 2009 and January 2016 were similar from an investment standpoint, but from a forward-looking perspective, they were very different.
  9. Mutual Funds & ETFs

    3 Vanguard Equity Fund Underperformers

    Discover three funds from Vanguard Group that consistently underperform their indexes. Learn how consistent most Vanguard low-fee funds are at matching their indexes.
  10. Investing News

    Alphabet Earnings Beat Expectations (GOOGL, AAPL)

    Alphabet's earnings crush analysts' expectations; now bigger than Apple?
  1. How do dividends affect retained earnings?

    When a company issues a cash dividend to its shareholders, the retained earnings listed on the balance sheet are reduced ... Read Full Answer >>
  2. What is the difference between called-up share capital and paid-up share capital?

    The difference between called-up share capital and paid-up share capital is investors have already paid in full for paid-up ... Read Full Answer >>
  3. Why would a corporation issue convertible bonds?

    A convertible bond represents a hybrid security that has bond and equity features; this type of bond allows the conversion ... Read Full Answer >>
  4. How does additional paid in capital affect retained earnings?

    Both additional paid-in capital and retained earnings are entries under the shareholders' equity section of a company's balance ... Read Full Answer >>
  5. What types of capital are not considered share capital?

    The money a business uses to fund operations or growth is called capital, and there are a number of capital sources available. ... Read Full Answer >>
  6. What is the difference between issued share capital and subscribed share capital?

    The difference between subscribed share capital and issued share capital is the former relates to the amount of stock for ... Read Full Answer >>
Trading Center