Pressure Test: Good Stress for Company Success

vS'cepanovi'c, Sanja; Constantinides, Marios; Quercia, Daniele; Kim, Seunghyun

Workplace stress is often considered to be negative, yet lab studies on individuals suggest that not all stress is bad. There are two types of stress: distress refers to harmful stimuli, while eustress refers to healthy, euphoric stimuli that create a sense of fulfillment and achievement. Telling the two types of stress apart is challenging, let alone quantifying their impact across corporations. We just did that for the S&P 500 companies in the U.S., and did so by leveraging a dataset of 440K company reviews published during twelve successive years, and developing a state-of-the-art deep-learning framework to accurately extract stress mentions from these reviews. We proposed a new methodology that places each company on a stress-by-rating quadrant (based on its overall stress score and overall rating on the site), and accordingly scores the company to be, on average, either a low stress, passive, negative stress, or positive stress company. We found that (former) employees of positive stress companies tended to describe high-growth and collaborative workplaces in their reviews, and that such companies' stock evaluations grew, on average, 5.1 times in 10 years (2009-2019) as opposed to the companies of the other three stress types that grew, on average, 3.7 times in the same time period. We also found that the four stress scores aggregated every year - from 2008 to 2020 - closely followed the unemployment rate in the U.S.: a year of positive stress (2008) was rapidly followed by several years of negative stress (2009-2015), which peaked during the Great Recession (2009-2011).