Ethical, social and environmental values appealing to employees in the global workplace

There was a time when virtually the entire focus of business was on the ‘bottom line’ – financial results and shareholder returns. Now many organizations recognize a wider set of obligations and devote considerable resources to managing their reputations and undertaking community projects. These initiatives are largely aimed at customers and critical stakeholders outside the business. But they also have an impact when it comes to employment and recruitment – one that varies according to the attitudes of Gen Y (aged 18-29), Gen X (30-47), and baby boomers (48-65).

Introduction

When deciding where to work, there are a host of factors that entertain the minds of prospective employees. Salary, conditions, promotion, and the challenge of the work are just a few.  But it is also apparent that the issue of business reputation is increasingly one that comes into play.

Perhaps in the wake of the Enron-era shakeout and the questionable standards exposed by the global financial crisis, the issue of business reputation has taken a larger share of attention amongst workers.

The reputation of a business is profoundly important to its ability to make sales, attract customers and engage with key stakeholders in government and across the community. But there is also a distinct impact on employees and even prospective employees, based on what they hear and see about the organization in question.

However each generation has a slightly different perspective on what organizational reputation means and how much it is worth. The latest findings of the Kelly Global Workforce Index show that employees are significantly influenced by the reputation of an organization in areas such things as ethical conduct, environmental awareness and community engagement.

The survey obtained the views of nearly 100,000 people in 34 countries across North America, Europe, and the Asia Pacific region.

What the survey found

Across the globe, the main findings of the survey show:

• 87% of respondents say they are more likely to want to work for a company that has a reputation for being ethically and socially responsible.
• 80% are more likely to want to work for an organization that has a reputation for being environmentally responsible.
• In deciding where to work, 33% say that policies to help reduce global warming are ‘very important’, and 55% say they are ‘somewhat important’.
• In deciding where to work, an organization’s reputation for ethical conduct is ‘very important’ to 69% of respondents, and ‘somewhat important’ to 28% of respondents.
• 48% of respondents would take on a lesser role or a lower salary to work for an organization that is environmentally friendly, caring about employees and the wider community.

Impact of Reputation on Recruitment

When it comes to deciding where to work, reputation matters. There is a strong tendency for employees to gravitate to those organizations that have a positive corporate reputation. A solid 87% say that they are more likely to want to work for a company that is considered ethically and socially responsible, something that is consistent across each of the three generational age groups.

It is perhaps not surprising that employees and recruits place such a high premium on sound ethical behavior. The global financial crisis and the bail-out of troubled firms have shed renewed light not only on the state of financial management in the corporate sector, but on the ethical practices of boards and management.

It raises the wider issue of what exactly corporate reputation means to an employee or a recruit. Many employees have probably been unsettled by the fallout that has followed Enron-style shortcomings and the enormous personal and business costs that have been incurred.

From a purely personal standpoint, a business with a reputation for ethical conduct is likely to be less volatile and, arguably, able to deliver longer term career prospects.

But a firm with a known reputation for good ethical and social conduct is also likely to appeal to employees at a deeper psychological level. It will engender a sense of pride that flows from the knowledge that the business is operating according to a sound ethical and moral basis. Such a business is also likely to appeal to a certain type of worker.

Employees take pride not only in what they do while at work but in what their organization stands for and how it is perceived by the entire community. It provides a sense of fulfillment to be part of an enterprise that is focused not only on performance outcomes but also on wider social goals.

Impact of Environmental Initiatives on Employment

There is also a strong desire by employees to work for firms with good environmental credentials, but it is not as powerful as the attraction to firms with well-regarded ethical credentials.

An average of 80% say they would be more likely to work with a firm that is considered environmentally responsible, somewhat less than the 89% cited for firms considered ethically and socially responsible.

Also the appeal of employers with ‘green’ credentials is skewed to older workers. Some 85% of baby boomers are attracted by an employer with an environmental reputation, compared with 82% of Gen X and 78% of Gen Y.

With considerable international debate surrounding the issue of global warming, there is also focus on the efforts of individual firms to reduce carbon emissions. From a HR perspective, it is worth considering what impact these initiatives have on employment attraction and retention.

In deciding where to work, 33% say policies to address global warming are ‘very important’ while 55% say they are ‘somewhat important’.

Baby boomers emerge as the most attracted to workplace global warming initiatives followed by Gen X and Gen Y.

This would suggest a relatively strong link between an employer’s green credentials and the talent it can attract and retain.

Certainly, many employees are prepared to look beyond the financial bottom line and the KPIs to other activities undertaken by an employer which were once on the periphery of its core business.

The late American economist, Milton Friedman once remarked that the social responsibility of business was to increase profits. He was hostile to the idea that a ‘business’, as opposed to a person, could possess a ‘social conscience’ and pursue wider social goals.

It’s a sentiment summed in the oft-quoted phrase: ‘the business of business is business’.

Yet scores of businesses of all sizes actively implement plans to address social responsibility, and there is a growing public expectation that narrow performance outcomes are not the sole determinant of business success.

This debate will continue, influenced, among other things, by cycles in the economic and social calendar.

But what some early critics of business social responsibility probably overlooked is how the practice plays out among a workforce that is becoming more activist and where, for many, the workplace has become an extension of social life.

In professional ranks, many employees view their employment as much more than a means to earn an income; it fulfils longer term aspirations for personal growth and self-belief.

Many staff will take pride in the activities that their organization pursuses outside its day-to-day business, amongst the wider community or on environmental and social initiatives. This, in turn, becomes a mechanism that deepens employee engagement.

It’s worth remembering that while there is a distinct attraction to environmental initiatives, these are weaker than those attached to sound ethical conduct by business.

As the chart below shows, the share of people who regard ethical considerations as ‘very important’ in job selection, is double that identified in the same question about global warming.

And it is baby boomers who place the greatest emphasis on ethical conduct as a condition of employment.

Willingness to Sacrifice for Social Responsibility

It is one thing to express a desire to work for a ‘socially responsible’ employer; quite another to pay a price for the experience.

Yet a significant number of employees say they would be prepared to forego income or status in order to work for an employer with a reputation for being environmentally friendly, caring about employees and the wider community.

With approximately half of all employees prepared to give up salary or promotion in order to work for a socially conscientious employer, there is substantial evidence of the drawing power that these firms possess.

When viewed from an international perspective there is a consistent pattern of employees displaying a willingness to give up salary and position to work for more ethically and environmentally focused employers.

It is noteworthy that amongst the top dozen countries, where 50% or more would make a salary or promotional sacrifice, there is a diverse mix of developed and lesser developed nations including China, India, Portugal, Australia, Canada, New Zealand and Spain. Those countries where there is a reluctance to make such a sacrifice are dominated by European nations including Ukraine, Russia, Finland, Czech Republic, Netherlands Germany and France.

Conclusion

Employees and prospective employees will weigh up a host of issues when deciding where to work or whether to stay with their employer.

What is clear is that included in the mix will be consideration for firms that have a focus beyond the bottom line; that care about their community and their immediate stakeholders.

Many employees are actually prepared to forego pay or position in order to work for an employer with a social, ethical and environmental conscience.

Employees take pride not only in what they do while at work but in what their organization stands for. 

They gain fulfilment and respect when their work is admired by others and when they are seen collectively to be doing something of worth in the wider community.

This is not to say that the focus of business must be on wider social goals – but that there is a balance between meeting key business performance outcomes, and meeting the expectations of employees and the wider community.

Establishing these ethical and social signposts has other benefits. It sends a powerful message to candidates and employees about acceptable norms and behavior.

Firms that develop a culture of social responsibility send a clear signal about the type of talent they want to attract and the way they want their business to function.