Workforce engagement is down. Here are 3 ways an ESG strategy can help turn the tide.

One of the most significant developments during the pandemic has been a shift in the social contract between employers and their employees. The rapid adoption of remote arrangements, increased HR efforts to ensure mental and physical well-being, and regular workforce surveys demonstrate companies’ increased efforts to care for their employees.

Despite these efforts, people needed more – if not their business, at least their jobs. Nearly 2 in 5 people surveyed in the annual Randstad Employer Brand Research survey said work has become more important to them since the start of the pandemic – part of the Great Lights. For many, the only way to find more meaning was to reset, which contributed to the Great Resignation and exacerbated the problem of talent scarcity. In fact, US employee engagement fell for the first time in a decade in 2021, with only a third feeling invested in their work and 16% saying they were actively disengaged.

Workers – and society at large – believe that employers can do more to create meaning and impact in the workplace. This is why the environmental, social and governance (ESG) movement is growing rapidly in many companies. In fact, the number of board members and C-suite leaders who say the pandemic has raised business expectations for societal impact, environmental sustainability and inclusive growth has increased by 27% l last year.

And it’s not just the workplace that’s changing as a result of ESG initiatives. Investors are also telling organizations that they need to pay more attention to sustainable efforts. ESG assets are expected to grow from $35 trillion today to $50 trillion by 2025, according to Bloomberg Intelligence.

What drives corporate sustainability?

Many recent developments have boosted ESG efforts, including the social justice movement. This has led to a groundswell of corporate activism and financial support for disadvantaged communities. More importantly, it has prompted companies to look inward to assess how they are promoting diversity, equity and inclusion (DEI) in the workplace.

This moment of introspection continues to reverberate with business leaders as they realize the importance of a strong DEI strategy on company reputation and employer brand. Randstad’s 2022 Workmonitor study found that 41% of workers surveyed globally said they would not accept a job at a company unwilling to make efforts to improve their diversity and equity; even more remarkable is that about half of 18-24 year olds feel the same way. Without a serious and sustained commitment to DEI, companies today risk losing great talent.

These sentiments also extend to environmental issues. Nearly half of those surveyed said they would refuse to join organizations whose position on environmental issues does not match their own. After another season of record-breaking temperatures in Europe, North America and elsewhere, initiatives such as achieving net-zero emissions remain a priority for many organizations.

Being good actors on social and environmental issues requires strong corporate governance and meaningful action – the key to corporate accountability and credibility. This has led more and more companies to mandate greater transparency in the workplace. People increasingly expect their employers to communicate company goals and strategies clearly and authentically. They know that without a robust system to guide behaviors and practices, their businesses risk serious consequences and even failure.

As Forbes pointed out, ineffective governance can hurt employee motivation. It is therefore important for leaders to determine the appropriate governance model to increase engagement and productivity. Establishing trust should be a hallmark of every approach, and workers are increasingly concerned about whether their company is doing a good job in adhering to policies and guidelines.

According to EY’s Long-Term Value and Corporate Governance survey, 28% of business leaders say attracting and retaining environmentally and socially conscious talent and engaging employees is key. one of the main benefits of integrating ESG factors into corporate strategy.

Focus on workforce satisfaction

There is no doubt that organizations will remain very focused on their ESG strategy and initiatives for the foreseeable future. However, to truly drive value for their workforce, business leaders need to think about how to leverage ESG to drive employee satisfaction: one of the most effective levers for employee satisfaction. innovation and productivity. And that comes back to the question of meaningful work.

It’s human nature that people want their work to be mentally stimulating and meaningful. It’s what keeps employees engaged and feeling connected to their organization, their colleagues, and their self-esteem. The decline in workforce engagement over the past year is disheartening, given that 71% of respondents felt supported by their employer at the start of the pandemic. An ESG approach that keeps employees top of mind can help reverse this trend. Here’s how:

1. Make ESG inclusive of all stakeholders.

Whether it’s volunteering, pay equity or speaking out on social issues, organizations must ensure that the concerns of all stakeholders are reflected in company policies, including the interests employees. People are more likely to feel included and supported on ESG issues when they are part of policy making and not just when they hear it top down.

2. Invest in initiatives aligned with organizational strengths.

For example, Randstad is a long-time partner of Voluntary Service Overseas (VSO), a non-profit international development organization that works with businesses to help communities in need. Over the years, Randstad has sent hundreds of volunteers to developing countries to support skills and career development. By leveraging the company’s core expertise, Randstad has helped these communities while supporting employees as they offer their professional skills to make a difference in the wider global community.

3. Create internal ambassadors to promote the Sustainable Development Goals.

When employees are engaged, included and energized, they become the perfect ambassadors to socialize ESG goals and company culture. This has a positive impact on internal engagement and external promotion of the company’s employer and corporate brands. Be sure to give employees tools to evangelize initiatives in their networks. Establish a process to monitor, evaluate and reward these efforts.

There are many good reasons why companies are investing more resources and budgets to advance their ESG strategies. Workforce satisfaction and productivity are clearly among the most compelling. By considering employee interests in every investment and policy-making exercise, employers help make work more meaningful and engaging for their people.

Michael A. Bynum