The Employee Handbook

From Day One

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Published Jul 16, 2025

The Human Capital Factor: How Treating People Well Drives Business Performance

Treating employees well has always been the right thing to do. Statistically, it’s also the smart thing to do.

Bart Houlahan saw it firsthand when revenues at AND1, the purpose-driven basketball brand he helped lead, dropped from $250 million to $40 million in three years after the company was sold. “The buyer didn’t share our people-first values,” Houlahan said during a fireside chat at From Day One’s Manhattan conference.

Houlahan went on to co-found B Lab, the nonprofit behind B Corp certification, to help prove a simple idea: treating people well is good for business. “All we’re trying to do is show clearly that if you put your people first, you’ll end up building a more resilient business,” he said.

That same belief led him to Irrational Capital, where he leveraged employee data points to prove a radical idea: companies with substantial human capital outperform the market by 3-6% annually.

According to behavioral economist Dan Ariely, whose research informed the model, traditional metrics like pay and benefits aren’t enough. Real motivation comes from pride, recognition, and psychological safety.

To validate the findings, Irrational Capital invited JPMorgan to replicate the analysis on 14 years of data. “JPMorgan did their own independent analysis, and they found that in every year, there was outperformance, and their average outperformance was 4% annually,” Houlahan said.

So, how can HR leaders use this?

Houlahan recommends sharing Irrational Capital’s JPMorgan reports with CEOs to spark boardroom conversations and implementing employee monitoring tools to measure intrinsic motivators. Culture alone isn’t a solution, he says, but “measuring what matters” gives leaders additional data to help guide strategy.

The most resilient companies, says Houlahan, will be the ones that invest in their people: through development, recognition, and trust. That’s not idealism. It’s a strategy with decades of market-proven returns. Read the full story here.

Gen Z on the Rise

Treating employees well can also mean understanding what they need to thrive. That’s trickier than it sounds, because those needs aren’t static. They evolve, sometimes by generation. Take Gen Z, for example: the first digital natives now showing up to work with new expectations about workplace norms.

Often described as ambitious and purpose-driven, Gen Z has also entered the workforce with some noticeable gaps, shaped by the pandemic and a job market that seems to change by the month. At From Day One’s Chicago conference, a panel of leaders shared how they’re working to meet Gen Z’s evolving needs and help them thrive.

Nikki Slowinski, EVP of talent experience and development at Publicis, sees promise and pressure. “They’ve learned how to get things really fast, which is great,” she said. But Gen Z still needs help building foundational skills. To meet this need, Publicis launched Ignite, a two-and-a-half-day kickoff program for early-career hires, focused on communication, time management, and business acumen. “The goal is to get them to greater impact quicker,” she said.

Panelist Shelly Cluff, senior consultant at Workhuman, emphasized the role of recognition for the generation that generally desires quick promotion. She encourages leaders to democratize recognition. “It gives people more opportunities to be recognized without having to receive that promotion.” Recognition, she says, also supports long-term growth. “Even if you’re not at that promotional step, you understand the repeatable behaviors that get you there.” Read the full story here.

Join us!

Here’s your chance to connect with our network this summer. On August 13, join us for a half-day virtual event about all things learning, development, and skills. Grab your free ticket here to be part of the conversation.