Creating a More Sustainable Employee Value Proposition
Purpose has power. Learn how ESG can help retain and engage your employees.
Earlier this year, Meta, Facebook’s parent company, completed its second round of layoffs in 2023, with a third wave planned for May.
Meta is not alone. Alphabet, Google’s parent company, laid off 12,000 people this year, its largest reduction ever. Amazon has eliminated 27,000 jobs. And Disney plans to reduce its total workforce by 7,000. Some experts anticipate that one out of three companies plans to cut 30% or more of their people in 2023.
Downsizing isn’t just rough on those who are laid off. Researchers found that `survivors‘ in companies with reductions experienced a 41% decline in job satisfaction, a 36% dip in organizational commitment and a 20% drop in job performance.
Yet, the talent war still rages in other areas of the economy. “In 2023, talent will become one of our top priorities,” said a large accounting firm recently.
“Our leadership focus will be on ensuring we have a clear employer value proposition, on providing the right learning culture, offering the necessary flexibility, and on leading with purpose.”
Regardless of whether your company is hiring or in retention mode, your Employee Value Proposition (EVP) attracts employees, gives them a reason to stay and is critically important to future growth. And some companies are sitting on a secret weapon: Their environmental, social and governance (ESG) policies.
ESG Plays a Crucial Role in Employee Engagement
While most businesses know how vital an EVP is, with 86% of human resources executives naming it a top priority in a recent study, many are missing the opportunity to include ESG policies.
ESG elements are a significant factor in employees’ decision to join, stay or leave a company:
- 58% of employees consider a company’s social and environmental commitments when deciding where to work.
- Employees are three times more likely to stay and 1.4 times more engaged at what they consider purpose-driven organizations.
- 93% of employees who believe their company is making a strong positive impact on the world say they plan to stay in their jobs. Of workers who disagree with that statement, only 43% plan to remain with their employer.
And integrating ESG and goals into an organization’s EVP can also help employers gain the upper hand in acquiring and retaining Gen Z and Millennial employees.
For example, 64% of Gen Z workers say the companies they work for must act on environmental issues. For Millennials, 96% cite sustainability as a key issue, and one in four say they’d quit if they found out their company had a poor environmental record. Women, people with higher incomes and those with higher levels of education are also significantly more likely to choose ethical employers.
Three Ways to Infuse ESG Strategies Into Your EVP
1. Put your ESG goals and achievements center stage
Companies can do more to communicate sustainability achievements via social media and websites, increasing visibility to current and future employees.
Starbucks anchors its EVP on the commitment to “inspire positive change in the world while you grow in your career and in your community.” One way it demonstrates that is by offering the Starbucks Greener Apron program, a partnership with Arizona State University. This program helps employees learn about global sustainability practices and create personal pledges to support them.
2. Make ESG part of the candidate’s experience
Companies can show how they bring ESG initiatives to life by connecting prospective talent with employees deeply engaged in sustainability and social programs. They can also infuse interview guides with questions that test affinity to ESG goals or dedicate time in the “pitch” materials to highlight ESG opportunities for perspectives.
Slack, for instance, focuses on how it has reworked and implemented diversity, equity and inclusion policies into the candidate experience. It started by sharing the company’s current ethnic and gender makeup and strategies for improvement.
Slack implemented some of these experiences to rework and promote more equitable hiring practices, including revising job descriptions with more inclusive phrases like “care deeply” and “build relationships,” eliminating whiteboard interviews and replacing them with blind code reviews and using co-worker role-plays for anyone conducting interviews.
3. Make your employees part of your ESG program
Organizations can mobilize initiatives to engage existing employees in contributing to ESG goals and celebrate those “from the front lines” stories, especially via social media.
Chipotle delivers its “Cultivate a Better World” EVP to employees all the time, including using more local produce in restaurants. Employee-led organizations provide millions of fresh food to local food banks. It funds fledgling Agri-Tech businesses, encourages micro-producers and helps provide meals for food-insecure members of the LGBTQIA community. It further fosters accountability by linking executives’ annual bonuses to ESG strides. This compensation plan is another way it hopes to champion responsible leadership and sustainable solutions.
ESG can become a company’s secret weapon in modernizing its EVP and revitalizing its culture, regardless of the economic climate. People want to work for companies making the world a better place, which is why infusing your EVP with your ESG strategy can help strengthen your recruitment and retention efforts.