Environment, social and governance (ESG) initiatives have been rising up the boardroom agenda for years, and it now forms a central part of many business strategies for the years ahead.
As well as being ‘the right thing to do’, the increased focus, driven by scrutiny from the media, board members, shareholders and consumers, also applies to employees, particularly those under the age of 35.
ESG is now so important a factor in workers’ decision-making processes that a company can lose employees and lose out on candidates if they are perceived to be (or actually) not doing enough.
ESG has become a leading push factor
Our latest market research reveals that nearly two in five employees would look for a new role if they thought their organisation was not doing enough on ESG issues, such as reducing carbon emissions or operating ethically.
Businesses that fail to take account of younger employees’ greater ethical awareness by offering authentic ESG policies are at greater risk. Nearly half of 18-34-year-olds say they would look for a new role if they thought their employer was not committed to improving its impact.
Is it too late?
With an exodus of up to 9.4 million workers already looming in the first six months of 2022, employers need to pick up the pace on their ESG efforts. Three in 10 employees will look for a new role imminently if their employer does not improve or increase its activity, and younger employees are even more willing to act.
While ESG policies take time and investment to research and put into place, employers can not afford to be behind the curve. Being clear and transparent about your journey can make a significant difference – employees understand that change takes time, but they need to see the intention and activity pipeline to believe it.
Having a plan with tangible, measurable actions in place isn’t only key for retention. ESG policies are becoming vital for attracting potential hires to the business.
More important than salary?
For most employees, salary is still the deciding factor when it comes to applying for or accepting a new role. The remuneration package on offer is still the leading factor for attracting candidates, with 43 per cent of employees ranking this as the most important element in their job search. However, it is worth noting that 22 per cent of under 35s listed corporate values as their leading concern.
Regardless of age, a good salary alone is not enough to secure the best talent on the market. More than half of employees said that they would never work for an employer they thought was unethical, regardless of the salary on offer. Amongst younger workers, 50 per cent admitted to researching a prospective employers’ corporate values before even applying for a role.
In today’s incredibly tight recruitment market, where candidates are often holding multiple job offers, ESG and corporate values are one of the main differentiators. If it came down to two employers offering a candidate the same salary, more than two-thirds of under 35s said they would review values to make a choice.
What can you do?
ESG has become a critical part of the recruitment process – both for attraction and retention – and particularly amongst younger employees who are perhaps more alert to ethical and sustainable business practices.
My advice is simple: if you want to keep your best talent and attract new candidates into the business, don’t rely on rhetoric. Ensure you have a clear, demonstrable ESG plan in place with measurables actions, and make that easily available to employees, candidates and customers.
It is no longer a ‘nice to have’. It’s a must.
If you are looking for help in retaining and attracting employees, or you need help with an existing job search, get in touch with our recruiters at Robert Half – we’re always happy to help.