ESG – real commitment, not lip service

Powerful partners for growth: embedding ESG in your People Proposition (EVP)

Looking to scale your business? This is what you need to know about putting people and purpose at the heart of your intentions.

Your starting point matters

The COVID-19 outbreak accelerated changes that were already underway. Millennials and Gen Z who are now rising through the workforce have different expectations and demands than the generations before. With vacancies at an all-time high, employers must tune in to what these expectations and demands are in order to recruit, retain and get the best out of the talent they need to achieve growth.

By understanding the ESG framework (or attention to environmental, social and governance concerns) and using it to inform your EVP (employee value proposition), you'll not only do good for the people, community and sector around you, but you'll be leaving a legacy for future generations too.

There are compelling business-related reasons as well. For example, the increasing importance of ESG in company valuations and its role in the tender process to win new work. According to the Harvard Business Review:

If a company does not focus enough on ESG, it risks falling behind in the market, losing the support of employees, customers, and investors, and potentially even losing the licence to trade in more stringent regulatory/ESG environments, like the U.S. and Europe.

Ignore your obligations and you'll not only be left behind and miss out on the talented people you need, but you could leave yourself open to legal liability, miss investment opportunities and risk your reputation.

Rooted into the same soil

There is a strong relationship between ESG and EVP. We'll explore more about what we mean by these terms later but in short, an organisation's approach to ESG has a bearing on the quality of their EVP – and the benefits of employee engagement, retention and attraction that go along with it.

One report by Marsh Mclennan highlighted that the best companies to work for have ESG scores 14% higher than the global average, and the companies most attractive to young talent have ESG scores 25% higher than the global average.

Of course it would seem logical that an organisation already tuned in to wellbeing, respect and purpose in the wider world would want this attitude to be reflected in how they deal with their employees.?

What are the mechanics at play and what do they mean for you?

A season of change

The UK ONS reported in April 2022 that vacancies rose to a new record of just over 1.2 million between the preceding three months, nearly half a million more than the pre-pandemic level. If people are the power behind business growth, business owners need to sit up and take note.

Embedding ESG into EVP takes short-term lip service to human-focused policies and transforms them into long-term commitments within a wider conscience-driven culture. When you consider that 68% of Millenials will go out of their way to check the sustainability credentials of a prospective employer, there is a strong imperative for getting this right now and into the future.

The power of ESG

With its roots in investment eligibility criteria, this framework emerged out of an interest in how stakeholders could measure the impact a business has on the environment. It's a way of looking at sustainability in areas like supply chains, waste management and carbon footprint.

Broadening the scope, ESG now concerns itself with how an organisation respects its workforce, customers, community and stakeholders, and the energy it puts into ethics at a governance level.

The power of EVP

COVID-19 brought the demands of ESG to the fore. With firms forced to make human-focused decisions, the kind of agility that may have previously seemed unthinkable was revealed. By being creative with technology and strategy we found new ways of working. Times called for greater empathy and compassion, particularly when employees had poor mental or physical health concerns or found themselves with additional caring responsibilities.?

There is no way back. For the growth of your business, the good of your workforce and your reputation to investors, customers and other stakeholders, now is the time to embed everything you have learned into your purpose, policies and culture.

How you can leverage ESG in your EVP

EVP consists of several pillars, with each one providing a dynamic opportunity to engage with ESG.

• Compensation - what does your gender pay gap report look like; and what about all the other diversity strands? What are you doing to address the issues? Is your fair pay policy backed by the principles of ESG and what about executive remuneration - are they both linked to performance in pursuing your purpose??Which investments have you chosen to stand behind to fund your pension schemes??Are they aligned to your values?
• Benefits - one report found that those without eldercare or childcare responsibilities were more likely to leave their job than those with them. Some millennials are looking for inclusive benefits that go beyond parenthood.
• Culture - Over 70% of respondents in one study stated that they would be more likely to work for a company with a green footprint; 40% of millennials said they'd choose one company over another for their green credentials, and 10% would accept a pay decrease in order to work for a sustainable organisation.
• Meaningful work - One report found that when a job has special meaning rather than being just a job, employees are 56% more likely to be innovative and creative
• Trust - greenwashing and wellwashing can knock irreparable holes in your reputation and stakeholder confidence.
• Growth opportunities - what is your approach to making sure that everyone has opportunities for challenging work, mentoring, coaching, visibility and sponsorship? Do you have any blind spots and how much do you think about D&I when developing career pathways?
• Health and wellbeing - physical and mental wellness metrics now sit alongside satisfaction and engagement as a way of measuring employee experience. Think of how you'll change your fact-finding procedures, how you'll use the insight and what you'll do to boost your wellness programme uptake. Is it fit for purpose?
• Positive workspace - more than perks and snacks, this involves building a strong and cohesive environment that helps to guard against burnout.?It links to the quality of line management too…
• Effective management and leadership – Are your managers and leaders equipped to have meaningful conversations with their teams about what really matters to them; and what the business really stands for??Do they walk the talk??The biggest reason cited at exit interviews for leaving an organisation is due to the quality of relationship they have with their line manager; and likewise, the biggest motivator to stay also often comes down to this.?

The importance of insight

Respect, inclusion and belonging should sit at the heart of your EVP. How do you lift that from intention into practice, and how do you find out what people want?

It's not just a matter of satisfaction surveys; it means having quality conversations and caring about the questions you're asking. There is a strong link between being innovative and engaged with this process and overall employee satisfaction.

By listening in and having a more personalised, tailored approach to EVP, we learn that one size does not fit all because everyone has different circumstances and contexts.

Future-proofing

By 2029, it's estimated that 72% of the workforce will be millennials and Gen Zs. We've highlighted a few areas in which you can align your business purpose and culture to inspire and motivate the talented people who'll move your company forward.

The procedures you put in place today will serve you in years to come. Events beyond our control held up a mirror to our practices, and now is the time to harness the power of everything we’ve learned. It's time to do better by our business, for our business.

To be authentic and trustworthy, this has to be a genuine process. This is no copy-and-paste exercise; the motivation needs to come from within.

It's an opportunity to take ownership of change.

Is it the time of the Great Resignation or the Great Re-engagement? If you're curious about what both terms mean for you and your organisation, click here.

What we’d love you to know about Jarred Consulting

Reshaping an EVP can be challenging but we’re experts in the field and we believe in performance through people.

Change happens when we’re able to zoom out to see the bigger picture and there’s nothing like a fresh pair of insightful eyes. By listening in and taking time to build trust, we’re able to choose the right talent from our team to match our client’s needs. Energetic and committed to excellence, we want the process to be enjoyable and whether we’re guiding the client through change or helping with recruitment at any level, we know that growth starts with alignment, is guided by strategy and is fed by wisdom.

Get in touch and start your journey today.