Could recruiters with strong ESG values beat the high payers in the war for talent?

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.