EVENTS & INSIGHTS / INSIGHT

Why ESG is Crucial to Your Talent Agenda

by Shannon Houde

In 2019, Alan Jope did something that few chief executives do.

Standing in front of a crowd of journalists, the boss of Unilever—the company behind Marmite, Magnums and Dove—announced the company was no longer interested in brands within its portfolio that failed to have some kind of a positive impact on either planet or society. Profits were no longer enough. In fact, he’d go so far as to sell off brands that didn’t do good.

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“Principles are only principles if they cost you something.” Those were Jope’s words.

But the reality is that Unilever wasn’t having to choose between profits and principles. They went hand in hand. In fact, in the year before Jope stood in front of those journalists Unilever’s collection of Sustainable Living Brands (brands that categorically do good in the world) delivered 75 percent of the company’s overall growth. Plus, they grew 69 percent faster than the rest of the business.

What Jope and the Unilever team had realized is that sustainability, environmental social governance (ESG), purpose, impact or whatever you want to call it, were now crucial elements of a successful business.

Purpose Drives Talent

It’s a lesson that bears out whatever sector you’re in too. An in-depth report by Deloitte found that purpose-driven companies witness higher market share gains and grow three times faster on average than their competitors, all while achieving higher workforce and customer satisfaction.

“Much like what a foundation is to a house, a conductor is to an orchestra and a canvas is to an artist’s masterpiece—a clear purpose is everything to an organization,” summed up the report’s authors.

That’s a pretty powerful message. One that has a major impact for the direction and focus of a business, yes. But equally important, and yet far less discussed, is how it should also have a big impact on the way you prioritize and recruit talent.

In fact, going forward, successful hiring strategies—for all roles in a business—should have purpose at their core. Why? Well, there is lots of evidence to show that millennials (whom, as of 2020, make up 40 percent of the world’s adults) and the generations that come after them simply aren’t interested in working for companies that don’t have purpose built in.

According to one study, two thirds of millennials say they won’t take a job if their employee doesn’t have a strong sustainability policy, and 84 percent say they’d show greater loyalty to a company that contributed to social and/or environmental issues. The data on Gen Z is even more compelling, with research finding this socially conscious generation (expected to make up 30 percent of the workforce in four years) go so far as to prioritize the purpose of an organization over salary. They want the values of their employer to match their own.

As an executive coach, I see this desire to step outside of a 9-5 job and move into a purpose-led career all the time. Even better, I see firsthand the increased motivation and productivity that this kind of move can bring. One survey found that across U.S. companies where workers are actively engaged in the ambitions of their employer there was better customer engagement, higher productivity, better retention and 21 percent higher profitability.

Activating Purpose

What this all means when it comes to recruiting talent is twofold:

  1. You need to ensure that your purpose, mission and values are properly promoted on all job specs, as well as websites, social media and any other promotional materials. Ensure that when a candidate spots a role open in your organization, they don’t have to work hard to see they’ll be working for an employer with purpose and impact at their core.
  2. Make sure you’ve built a killer hiring strategy designed to snag sustainability and impact specialists that can deliver on your ambitions. That may mean creating brand new roles or reshaping existing ones. Sustainability teams that used to be shoved in a corner office and only occasionally rolled out for a charity donation drive will now have far more central roles, for instance. They’ll be far more embedded in the operations of a business and that could mean new titles, new criteria and remuneration that reflects a higher skillset.

Next, once those roles are defined, ensure you have a data-driven strategy for selecting the very best candidates. Getting in the applications for an impact-focused role likely won’t be a problem (often recruiters receive upwards of 200 applicants for a single role) but that makes it even more crucial to have a proper filtering system in place. Aim for applications to be split evenly between the three main recruiting channels: inbound (i.e., people who apply directly for a position), outbound (i.e., people you actively search for and target) and referrals (i.e., the people your current team recommend). Around a quarter of these applicants should emerge at the top, and make it through to your screening process, and 25 percent of these to the interview stage.

Then, at interview, look to frame your questions around some of the core competencies of ESG and sustainability: bravery and resilience, a balance between global and local perspectives, the ability to influence and engage others, and an innovative mindset. For example, to explore resilience ask a candidate to, “tell me about a time when you were challenged to stay committed to a project” or “when you feel uncomfortable in a situation, what do you do? Give an example.” Or for an insight on their skills around influence and engagement ask, “What is your approach to negotiating with strong-willed person?”

Finally, though there can only be one successful applicant, don’t miss the opportunity to still leave them as supporters of your brand, something that’s particularly important with ESG and sustainability roles. Use the recruitment process to demonstrate your organization’s commitment and convert unsuccessful candidates into brand advocates.

As you can hopefully see, the current evolution toward more purpose-led business will send major ripples through company’s recruitment strategies going forward. Not only will hiring managers need to source (and keep satisfied) the best professionals in ESG and impact. they’ll also need to engage all employees and potential candidates in the ESG and sustainability ambitions of the company, or risk missing out on top talent to competitors.

Unilever may have been ahead of the curve when it spotted the clear link between profit and purpose. But it’s carved out a trajectory in which all successful businesses, and hiring teams, must follow.

This article was originally published by SHRM and can be found here.

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