Employee Engagement Data and Value Creation: Lessons from Moneyball
In today’s knowledge economy, the employee experience is a critical lever for attracting and retaining talent, as well as for driving business performance. Whether you’re a public company, a private business owner, or an investor, understanding your people and the environment they work in is essential to long-term value creation. One powerful way to gain that understanding? Data.
The Moneyball Analogy
Billy Beane’s “Moneyball” strategy revolutionized baseball by using unconventional data and leading indicators to build a winning team on a budget. Instead of relying on traditional scouting instincts, Beane uncovered undervalued players through deeper data analysis and outperformed better-funded rivals.
This same approach holds true for business today. Organizations that go beyond basic metrics and tap into predictive, data-driven insights about their workforce can gain a meaningful competitive edge. Like Beane, employers must confidentially ask meaningful, validated, and benchmarked questions to understand the employee experience within their organization.
What the Data Shows: J.P. Morgan’s Human Capital Factor
Over the past several years, J.P. Morgan and Irrational Capital studied the relationship between how companies treat their people and how those companies perform financially. Their research, based on over 71 million employee survey responses from 1,300+ U.S. public companies, formed the basis for the Human Capital Factor (HCF)—a model that links human capital practices with equity performance.
The findings are compelling and make one thing clear: companies with strong HCF scores have consistently and significantly outperformed market benchmarks. This outperformance has held steady over time, through bull and bear markets alike, demonstrating that investing in people drives both cultural and financial gains.
Beyond Table Stakes: The Intrinsic Drivers of Engagement and Value
Competitive and fair compensation, good benefits, and workplace flexibility are table stakes, but they have not been validated to be differentiators when it comes to increasing value creation. Instead, long-term value is shown to be built through the intrinsic elements of the employee experience, including:
- Alignment with Purpose and Values: Awareness and emotional connection employees share towards the purpose, values, and direction of the organization.
- Respect and Support: Being heard, respected, and supported creates a sense of belonging and trust.
- Growth and Development: Opportunities to grow by learning and applying new things and making meaningful contributions.
- Operational Effectiveness: Training, open-mindedness, interdepartmental cooperation, and efficient execution.
When these elements are present, employees become more than just satisfied—they become committed advocates to the organization and its goals. Employees who bring their heart to work offer more discretionary effort, demonstrate greater productivity, and contribute more deeply to long-term success.
Why Employee Sentiment Matters
Similar to how businesses rely on customer data to improve products, services and customer loyalty, businesses seeking to improve employee loyalty and accelerate value must collect, analyze, and leverage employee sentiment data. Knowing how employees feel about their work, company leadership, and opportunities for growth provides the actionable insight needed for meaningful change.
Conclusion
Just as Billy Beane used data to upend conventional wisdom in baseball, businesses today can use workplace data to challenge assumptions and drive value creation. By focusing on both intrinsic and extrinsic aspects of the employee experience, leaders can create workplaces that engage people, build loyalty, and fuel long-term success.
To learn how your organization can collect and leverage employee sentiment data to build a workforce that feels valued—and values their workplace—contact our Human Capital and HR Consulting team today.
Article Contributed by Scott G. Smith
