The growing importance of ESG in recruitment and retention

Companies may risk losing talent if they don't take account of the greater ethical awareness of younger jobseekers and employees, with the majority willing to sacrifice earnings for their value.

Over the past few years we’ve seen businesses move their priorities to embrace environmental, social and governance (ESG) issues. Whilst it may not seem like the most exciting element of a remuneration package, increasingly job seekers are highlighting that its effective implementation is one of the reasons that leads them to initially accept a position and then stay with an organisation.

The influence of millenials and their commitment to social contracts is already being felt across business. Research by Robert Half shows that 38% of employees would look for a new role if they thought their organisation was not doing enough on ESG issues, and this rises to 47% of 18-34-year-olds. 53% said they would never work for an employer they thought was unethical, regardless of the salary on offer and this increases to 59% among the younger group.

When it comes to attracting new talent, it’s no longer as easy as offering the most competitive remuneration package. 22% of the 18-34-year-old group listed corporate values as their leading concern when choosing a new role, with 50% saying they research potential employer’s corporate values before making an application.

In a tight recruitment market a clear ESG strategy is becoming a vital tool for differentiation. If it came down to two employers offering the same salary, 69% of the 18-34 group said they would review the companies’ corporate values before making their decision.

Young professionals are looking to make a positive impact, in the workplace through the work they do and the choices they make. To attract the best and brightest talent, it’s vital to remember that todays and tomorrow’s job seekers aren’t just considering salaries and benefits. ESG has become a critical part of recruitment and retention especially among younger employees who want to work for an organisation that has a clear, demonstrable ESG plan in place with tangible, measurable actions.