Could recruiters with strong ESG values beat the high payers in the war for talent?
Employers with ambitious environmental commitments may have an edge, especially in attracting younger candidates, according to research for Bupa. The firm’s chief sustainability officer explains the findings
The great resignation and record vacancy figures have made it an incredibly competitive jobs market for businesses to operate in. The latest vacancy figures stand at just under 1.3 million, roughly 500,000 higher than the pre-pandemic peak.
To say that great resignation has made the UK jobs market challenging for recruiters would be an understatement. The latest estimated figure for unfilled vacancies stands at just under 1.3 million – roughly 500,000 higher than the pre-pandemic peak.
Now that jobseekers have more choice than ever, recruiters are reviewing the packages they’re offering to see what elements could make them stand out from the crowd. While some businesses have opted to raise wages and/or enhance benefits packages, Sally Pain, chief sustainability officer at Bupa, feels that a company can gain an advantage in the war for talent if candidates can see that it’s made ambitious environmental, social and governance (ESG) commitments.
She reports that an increasing number of candidates have been asking questions about the health insurer’s sustainability goals during their job interviews. This observation prompted Bupa to commission Opinium to conduct a survey of 2,000 UK adults and seek their views about the importance of ESG.
More than half of the respondents (52%) said that they would stay longer than they otherwise might with a company that had made stretching ESG commitments and also recommend it to others as a good place to work. The figure rose to 60% among respondents from generation Z (those aged 18 to 22).
“We wanted to find out how interested potential employees really are about business sustainability goals and whether it’s important to ensure that an individual’s values line up with those of a potential employer,” Pain explains.
The survey also revealed that gen Z were more prepared than the average respondent to prioritise a potential employer’s commitment to sustainability over what it could pay them. More than half (54%) said that they would be willing to take a pay cut to work for a business that reflected their ethics, while 31% said that they would turn down a job offer from a firm if they weren’t happy with its ESG credentials.
At a time when many recruiters are competing on pay, the fact that a significant proportion of younger candidates would be willing to compromise on salary to work for a business that reflects their values may come as a surprise to some, according to Pain.
“Everyone’s talking about the war for talent – it’s such a hot marketplace at the moment,” she says. “So it’s very interesting that this has become such a priority for people looking for a new job. It’s great from an employer’s perspective, because you want to hire enthusiasts who believe in your organisation’s values.”
Although Opinium found that gen Zers were more likely than their older counterparts to be concerned about ESG issues such as climate change and social inequality, respondents from all generations favoured employers that were committed to tackling these challenges. More than half said that they would be more engaged (51%) and satisfied (53%) in their jobs if their employer demonstrated strong environmental and social commitments.
“Our research shows that it’s a trend right across the board, but it’s a particularly important factor for generation Z,” Pain says. “Your sustainability commitment is a powerful attraction tool, although only if you live up to your commitments it is truly meaningful. That’s why making public commitments is so important, because it holds companies to account.”
Making sustainability an organisational objective
Since he was appointed as group CEO in January 2021, Iñaki Ereño has made sustainability part of Bupa’s purpose. The organisation used to focus on helping people “live longer, healthier, happier lives”, but it has since added “making a better world” to its priorities.
Pain explains that it was crucial to make sustainability a core element of the company’s strategy and stresses that ESG commitments can’t simply “be something that you put out in your marketing materials”. Bupa has set science-based targets covering every source of its greenhouse gas emissions and is aiming to achieve net zero across its global healthcare operations and value chain by 2040.
“We share our sustainability plans internally, we track progress and we report on our achievements,” she says. “This is an ongoing conversation across the business, because it’s important that employees can see that we’re living up to our commitments.”
For Pain, the exercise entails working closely with all functions. She argues that “sustainability isn’t something that can be driven by a small team of enthusiastic experts”. It has to involve the entire business – and each team should feel ownership over its sustainability goals.
“Sustainability has to be a balanced part of your overall business strategy,” Pain says. “This is an incredibly important element. It should have an equal weighting to that of performance and customer focus.”
Some institutional investors have started questioning the predominance of ESG ambitions in the largest organisations. For instance, Terry Smith, the founder and CEO of Fundsmith, recently criticised Unilever’s leadership team for prioritising sustainability over profit margins, arguing that many businesses had been losing their focus on the bottom line.
But Pain believes that the two can go hand in hand. “Sustainability is incredibly important for the longevity of your business,” she argues.
As Opinium’s research for Bupa indicates, if businesses want to continue attracting talent – especially new entrants to the jobs market – having demonstrably strong ESG values may prove to be a crucial enticement.