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.