Sustainability is the Key to Standing out as a Top Employer
Studies shows that companies with a sustainability action plan have considerably higher rates of employee satisfaction and retention, as well as being more successful at recruiting top talent.
To those working in HR and Recruitment, the summer of 2021 became synonymous with the ‘great resignation.’ Employees across the world began to leave their jobs in droves, in pursuit of passion projects, new career opportunities or simply a break from the work they’d been doing for years. For many, an extended period of working from home during the pandemic made them re-evaluate their work-life balance. But contrary to initial belief that the trend will be short lived, new research from PwC shows that one in five workers globally plan to quit in 2022.
The Global Workforce Hopes and Fears Survey 2022, which draws on data from more than 52,000 workers across 44 countries and territories, revealed that insufficient pay is only a small part of the equation when it comes to reasons for leaving a job. Other important factors that employees take into consideration are flexibility, specialised training which empowers workers, and — crucially — transparency over ESG matters. It’s becoming increasingly apparent that sustainability is key to standing out as a top employer. Let’s take a closer look at the benefits that it can bring.
Increased employee satisfaction and retention
Numerous studies (including this one by MarchMcLennan) have shown that companies with a sustainability action plan have considerably higher employee satisfaction ratings than those without. Anecdotally, empowering employees to drive sustainability initiatives from the bottom up, has proven to be one of the most successful ways of driving positive climate change.
For example, tech giant IBM has been consistently expanding its staff-driven energy conservation program, and in doing so, has managed to save more than 5% of the company’s total energy use. Following demand from employees, IKEA has installed solar panels to power individual stores.
Increased employee involvement in sustainability leads to higher satisfaction levels, and ultimately improved retention rates, so it’s a winning situation all round.
A recruitment boost
A recent Sustainability Report by GetSmarter revealed that 56% of employees prefer to work for companies that are taking some form of environmental action. At the same time, a report by McKinsey found that those businesses which have implemented efforts to be more sustainable, appear more attractive to professionals to those that don’t.
Further studies, such as the Totaljobs survey in the UK, reveal that millennials, who will soon form the largest segment of the workforce, would agree to take a pay cut of up to £11,400 if it meant working for a company which helps the environment. All of this reveals that sustainability simply makes businesses more attractive employers and can therefore help you in the growing competition to win top talent.
Studies have shown time and time again that sustainability-oriented businesses produce more impactful patents, and are ultimately more successful in the long run. Such companies appear to be generally more open to new ideas, are consequently more resilient and less affected by price volatility.
The difference between sustainable innovation and traditional innovation
Both traditional and sustainable innovation deals with the development of new products and services to meet emerging needs. But there are some key differences between the two. Companies that engage in sustainable innovation are not purely driven by making a profit. Their main innovation goal is to satisfy the needs of individuals or communities of the future. They also look beyond their own entity to the broader system which they are part of. Researcher Richard Adams and colleagues identified three categories of sustainable innovation: operational optimisation, organisational transformation, and systems building. Each of these is linked to increased business efficiency, (which we’ll describe in more detail below) and crucially to staff engagement and retention. Innovation also plays an important part in recruiting new members of staff, because it shows that the company is much more likely to survive a volatile market.
Increased productivity and business efficiency
According to the above-mentioned research by Adams, companies can improve their operational processes without fundamentally changing their business model. It’s all about seeking out ways to do the same things better and in doing so reducing their impact on the environment. Adams claims that this can be achieved with relative ease, by companies adding environmentals and social criteria to their existing profit criteria, in an approach which has been termed ‘eco-efficiency.’ Such behaviour circles back to retention, as when employees see that their company is making strides to become both more innovative and more efficient, while having a positive impact on the environment in which it operates, they are much more likely to stay with the company.
The importance of credibility
There’s much research to show that sustainability plays a key role in job-seekers’ employment choices, and has a significant impact on job satisfaction and retention. But it’s important to engage in trustworthy climate initiatives, so as not to be accused of ‘greenwashing’. One key way of doing this is by building organisation-wide accountability for results. This means that sustainability targets should not just be owned by a central sustainability team (in the case of larger companies) or the management team, but by every individual team within the organisation. It’s therefore important that everyone across the business has visibility of the company’s current carbon footprint, and the measures being taken to address it — and can see the impact that their positive climate activities are having over time.
Sustainability — good for the planet; good for employment
All of the above points show that being sustainable helps you boost innovation, employee satisfaction and retention. It also helps you stand out as a top employer — and is often the deciding factor when top candidates are making choices about their next job. But it’s crucial to demonstrate what steps you’re taking to address your emissions, and how you’re doing against the targets that you, as a company, have set for yourself.