As Covid has prompted both a growing desire for compassionate leadership alongside concerns around the expanding workload of people who are often working remotely, there have been understandable discussions around achieving the right work-life balance.

A recent study from the Rotman School of Management highlights that while improving work-life balance has benefits, there is a limit to the impact it can make.  The findings emerged from an analysis of around 6,000 employee reviews of their workplace from people working as analysts.  The researchers also examined the accuracy of the forecasts made by those analysts.

“There is a lot of anecdotal evidence, but here we provide large-scale evidence that supports the recent push to grant these employees at least some reprieve from the extremes of their jobs,” the researchers say.

Boosting performance

The study found that the accuracy of the analyst’s forecasts would improve when their work-life balance improved, but that this boost maxed out at 3.5 on a 5-point scale, after which there was no further improvement.

A similar boost appeared in the investment returns that were based on these stock recommendations.  They were maximized when the work-life balance of the analysts was 3 out of 5.  The researchers believe this is perhaps because employees need a certain amount of stimulation to efficiently process information.

“If you have too much work-life balance, that means you’re not focusing enough on work,” they say.  “A little bit of stress is probably a good thing but if it’s too much then the pressure becomes daunting and you can’t do anything.”

Career boost

Perhaps unsurprisingly given the boost a decent work-life balance gave to the performance of the employees, it also supported their career advancement, with both job mobility and promotions improving as a result.

The researchers believe their work is the first to directly examine the impact of work-life balance on performance and career progression.  They believe financial analysts are an ideal profession to measure because they are more professionally aggressive and career-oriented, while also having a reputation for high stress tolerance.

They also, of course, contribute significantly to the smooth functioning of capital markets, so understanding any variance in their work is important in and of itself.