Aniline Blog

Sustainability is a Must-Have for Great Workforce Perception

4 Minute Read

Let’s take a quick trip back in time to 2001. Remember when the first Harry Potter film hit theaters, pop princesses and boy bands ruled the airwaves, Nokia was a market leader, and many companies thought going green was too expensive to be worthwhile? Fast forward to 2021, and not going green can actually cost you some serious green when it comes to workforce perception and employee retention.

Sustainability is dramatically changing workforces and company cultures, and while it has been that way for much of the last decade, it’s an inescapable part of your organization now. In fact, 70% of US working adults recently said that they would be more loyal to a company that helps them contribute to social and environmental issues, and 74% of them said that their job is more fulfilling when they have opportunities to make a positive impact on social and environmental issues. A quarter of them even went so far as to say that they would look for a new job if their current employer had a bad track record when it comes to environmental issues.

As Millennials and Gen Z begin to take up bigger percentages of the workforce, sustainability is only going to become more crucial to attracting and retaining quality talent.

By 2025, Millennials will make up about 75% of the US workforce, and 64% of them recently said they wouldn’t even take a job if the company didn’t have a strong corporate social responsibility (CSR) policy. A whopping 83% of them would be more loyal to a company that helps them contribute to social and environmental issues, and most of them would actually take a pay cut in order to work for a company that’s environmentally responsible.

As for Gen Z, they’ll make up 30% of the US workforce by 2025, and they’re the first generation in history to say that they prioritize purpose over salary. They expect authenticity and consistency, and if you as an employer don’t provide it, they won’t hesitate to call you out on it—with a social media-amplified complaint. The same “rule” applies to CEOs, as nearly 75% of the entire workforce places a large emphasis on the CEO’s personal involvement in corporate responsibility.

In other words, making sustainability a priority will make your team more sustainable in the long run.

The world’s biggest companies are taking these insights very seriously. The majority of global companies have targets in place to reduce their carbon emissions, and 90% of North American companies report on sustainability in their annual assessment of corporate performance and risk. Many of them even present environmental, social, and governance (ESG) information that goes beyond what various industries and the SEC require.

Companies that place an extra-special emphasis on sustainability grab plenty of positive attention. Here are just a few examples:

  • In addition to eco-friendly manufacturing, distribution, and recycling practices, outdoor clothing retailer Patagonia conducts waste audits to discover additional opportunities for recycling and composting.
  • Disneyland’s Circle D Ranch collects 20 different commodities for recycling, which diverts 99.8% of its waste from landfills.
  • Apple made huge headlines back in 2017 for reaching its goal of covering 100% of its operations with 100% renewable electricity.

Only 27% of US workers say that they are very satisfied with their employer’s sustainability efforts, but luckily you don’t have to start off as big as Patagonia, Disneyland, and Apple in order to start satisfying your own workforce. Even kicking off some small initiatives, like using greener office supplies, continuing to let employees work remotely (at least part of the time), and recycling your outdated electronics, can show employees that you’re willing to walk the walk.

Whether your sustainability efforts are big or small, how does all of this affect workforce perception?

Since workforce perception is all about how your employees feel about your organization, how they’re treated, and how they’re asked to treat customers and suppliers, sustainability can go a long way towards raising it. Even back in 2012, a UCLA study found that employees at companies with green practices and standards were 16% more productive than their non-green counterparts. More recently, experts have said that employees at sustainable companies are more motivated, receive more training, and experience better interpersonal relationships—all of which makes a huge impact on workforce perception.

Another thing to consider, the higher your workforce perception is, the lower your turnover rate is likely to be, which can save you some big money. It’s estimated that US businesses lose $1 trillion every year simply because of voluntary turnover. Depending on the employee’s expertise, the cost of replacing them can range from 50% - 200% of their annual salary. There are additional costs that can come into play when you lose talented employees too, like lost clients, damage to your reputation, lower morale for the employees left behind, and lower productivity while the replacement gets up to speed.

Bottom line—the world’s workers are watching to see how your organization handles sustainability. Simply relying on dollars and cents to measure your success doesn’t work anymore. If you want all of the benefits that come from positive workforce perception, you need to think about what’s going to make your employees feel fulfilled. Today’s job seekers are being encouraged to make a list of what they want/expect from their next employer and then research which companies fit the criteria. There are several things that make people feel more whole at work, and sustainability is a big one that you can no longer afford to ignore.

Kevin Gregson

Kevin Gregson

A consulting industry veteran, technology entrepreneur, and insurance industry innovator, Kevin formed Aniline while working on the insurance vertical of Plug and Play, a technology incubator in the Silicon Valley. His vision for Aniline is based on applying the power of artificial intelligence and machine learning to help organizations improve the lives of their people. Also a senior advisor to Plug and Play and a board member of Nassau Insurance Group, his past roles include senior executive positions at Willis Towers Watson, Alvarez & Marsal, and Ernst & Young.