Empirical analysis of the relationship between work-life balance and financial performance

Purpose 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). Design/methodology/approach 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. Findings The authors find a positive relationship between WLB and CFP, as indicated by the return on assets and return on equity. Research limitations/implications 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. Practical implications This evidence advocates for managerial endorsement of WLB schemes as a strategic lever for enhancing firm profitability. Originality/value 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.