The Business Case for Hiring Military Veterans/Reservists: Stock Price Performance of Military Friendly Firms

Abstract

The reasons for hiring military veterans/reservists are well documented, including such factors as leadership, teamwork, and resilience. Research shows that veterans/reservists perform at higher levels, have lower turnover rates after the first job, and advance more rapidly in Federal civil service organizations. However, the impact of hiring veterans/reservists on a firm's financial performance remains unexplored. Using GI Job's list of "2016 Top 100 Military Friendly Firms," we demonstrate that the 64 publicly traded "military friendly" firms on this list had a statistically significant higher return (median 7.23 percentage points and a mean 5.18 percentage points higher) than comparable firms not identified as military friendly. These findings provide compelling evidence of the financial benefits associated with employing military veterans/reservists in response to the call for more empirical research on the impact of veterans in civilian organizations. In addition to encouraging businesses to consider hiring veterans/reservists, our results may be beneficial for career counselors, human resource and development managers, and others who interact with veterans, as well as for veterans themselves.

Human Resource Development Before, During, and After Military Leave

“…Organizations can benefit from hiring reservists, as they tend to perform better, turnover less frequently, and advance more readily than other employee groups (Barrera & Carter, 2017; Johnson, 2014). Reservists also bring attributes such as loyalty, leadership, problem-solving skills, self-discipline, dependability, teamwork, communication skills, and a strong work ethic, which can yield financial benefit to the organization (Pollak et al, 2019). However, in order to maximize that value, HRD practitioners need targeted, proactive approaches to facilitating dual careers, particularly when long absences are likely.…”

“…Nonetheless, companies with inclusive practices for military-connected employees have shown above average market performance (Benjamin, 2019; Pollak et al, 2019). Savvy companies target reservists because of the training and development provided by the military (Corry, 2013; Human Resources, 2018; Kaufman, 1965).…”

Reservists and Veterans: Viewed from Within and Without

“…Veterans have demonstrable training and work performance in the form of standardized evaluations. Indeed, veterans perform at higher levels, have lower turnover rates after the first job, and advance more rapidly in Federal civil service organizations (Pollak et al 2019). They, too, are desired because of their experiences as having followed protocols and direction by supervisors and having supervised others.…”

International Scientific Conference ERAZ - Knowledge Based Sustainable Development

“…Their unique skill set, a vast amount of training, experiences, impeccable work ethics, and personal characteristics are beneficial to an organization (Minnis, 2017). Hiring an ex-serviceman conditionally presents the opportunity to secure an individual who is loyal, disciplined to mission, comprehends team success, appreciates hierarchy, respects orders and superiors and can make decisions under pressure, which can yield financial benefit to the organization (Stern, 2017;Pollak et al, 2019). However, although ex-servicemen were perceived as having greater leadership and teamwork skills, they were also viewed as having poorer social skills (Yanchus et al, 2018;Shepherd et al, 2019) There are additional issues that can affect the employment of ex-servicemen.…”