Why talent is leaving: The impact of non-sustainable practices on employee retention

The importance of business sustainability continues to grow and along with it is the desire to work with eco-conscious organisations. Employees today are more environmentally and socially conscious. They want to align their personal values with their professional lives.  Therefore, companies that integrate sustainability into their business not only benefit the environment but also enhance employee retention. Keep reading as we delve into the growing significance of sustainability to employees and identify non-sustainable practices that drive talent away. 

The growing importance of sustainability to employees

The importance of sustainability to employees is growing rapidly, reflecting broader societal shifts towards environmental and social responsibility. Employees increasingly prefer to work for companies that demonstrate a commitment to sustainability, as it aligns with their personal values and ethical beliefs. 

For instance, a study by Cone Communications found that 75% of millennials would take a pay cut to work for a socially responsible company. Sustainability initiatives have been found to lead to higher employee engagement and job satisfaction. Research by the Society for Human Resource Management (SHRM) indicates that companies with strong sustainability programmes experience a 55% improvement in employee morale and a 38% increase in loyalty. 

When employees see their employers taking meaningful steps to address environmental and social issues, they are more likely to feel proud of their workplace, which can translate into higher productivity and reduced turnover rates. Additionally, sustainability provides employees with opportunities for professional development through upskilling and reskilling.

As businesses increasingly prioritise sustainable practices, employees, regardless of their department or sector, need to acquire new skills and knowledge to stay relevant. Sustainability training in areas such as Sustainability Plan Development, Circular Economy, Decarbonisation, and Diversity, Equity and Inclusion can enhance employees’ career prospects and make them more valuable to their organisations. 

Non-sustainable practices that drive talent away

Just as sustainable practices can attract top talent, non-sustainable practices can potentially drive them away. Some key non-sustainable practices that are causing this talent exodus include:

Environmental negligence

Companies that ignore their environmental impact risk alienating employees who value ecological responsibility. This includes excessive carbon emissions, poor waste management, and harmful industrial practices. A study by IBM found that 71% of employees and job seekers say that environmentally sustainable companies are more attractive to work for, and 78% would be more likely to stay with an environmentally responsible company. 

Lack of ethical standards

Businesses engaging in unethical practices such as labour exploitation, unfair wages, and poor working conditions can drive talent away. Employees increasingly seek out companies that uphold high ethical standards and provide fair treatment. According to a survey by Edelman, 56% of employees would refuse to work for an organisation that is seen as unethical, while 77% would be more loyal to ethical employers. 

Resistance to innovation

Companies that are slow to adopt sustainable technologies and practices may lose innovative and forward-thinking employees. A lack of investment in renewable energy, sustainable materials, and green technologies can signal to employees that a company is not committed to future-proofing its operations, thus driving talent to more progressive employers. Deloitte’s Global Millennial Survey revealed that 40% of millennials choose employers based on their innovation agenda. 

Poor Corporate Social Responsibility (CSR)

Companies that do not engage in robust CSR initiatives are less attractive to modern employees who value social impact. This includes community engagement, charitable contributions, and active participation in social causes. The Cone Communications CSR Study indicated that 88% of employees whose companies have a strong purpose say they are more engaged, while 76% feel a strong sense of loyalty to their employer.

5 strategies for improving sustainability to retain talent

Improving sustainability practices is crucial for businesses looking to improve employee retention. Below are 5 effective strategies. 

1. Implement comprehensive sustainability programmes

Developing and implementing comprehensive sustainability programmes can signal a company’s commitment to environmental and social responsibility. This includes setting clear sustainability goals, measuring progress, and communicating achievements to employees.

2. Promote employee involvement

Encouraging employees to participate in sustainability initiatives can enhance engagement and loyalty. Companies can create green teams or sustainability committees that involve employees in planning and executing sustainability projects.

3. Invest in training and education

Providing employees with opportunities for upskilling in sustainability can enhance their commitment to the company’s sustainability goals. At the Institute of Sustainability Studies, we offer a variety of courses designed to equip employees with the knowledge and tools needed to drive sustainability initiatives. Our online, self-paced courses span topics like Green Marketing, Sustainable Supply Chain, Sustainable Operations, and ESG Reporting and Auditing and are delivered by a faculty of experts. 

4. Foster a culture of sustainability

Creating a culture that prioritises sustainability can help retain talent. This involves integrating sustainability into the company’s core values and everyday practices. Leaders should model sustainable behaviours and recognise employees who contribute to sustainability efforts.

5. Offer incentives and recognition

Recognising and rewarding employees for their contributions to sustainability can motivate them to stay engaged. This can include awards, bonuses, or other incentives for achieving sustainability targets.

Companies that are attracting and retaining talent by integrating sustainability

Below are some case studies of companies that are successful in attracting and retaining talent as a result of their implementation of sustainability initiatives. 

Unilever

Unilever, a multinational consumer goods company, has been a leader in integrating sustainability into its business model through the Unilever Sustainable Living Plan (USLP). The USLP focuses on reducing environmental impact, improving health and well-being, and enhancing livelihoods across the value chain. 

Unilever aims to halve its ecological footprint by 2030 and improve the health and well-being of over a billion people. The company’s commitment to sustainability has significantly improved its ability to attract and retain talent. They report higher employee engagement and morale due to its sustainability efforts. A study by MIT Sloan Management Review reports that employees at Unilever feel proud to be associated with a company that prioritises sustainability. 

IKEA

The global furniture retailer, IKEA, has integrated sustainability deeply into its business strategy with initiatives aimed at creating a positive impact on the planet and people. IKEA’s People & Planet Positive strategy includes commitments to becoming climate-positive by 2030, using 100% renewable energy, and sourcing materials sustainably. The company also promotes circular economy principles by offering services to recycle old furniture.

IKEA’s sustainability efforts have been instrumental in attracting environmentally conscious employees. The company’s focus on sustainability has enhanced its employer brand, making it a preferred workplace for individuals passionate about environmental and social issues. Additionally, IKEA’s employee engagement surveys indicate that sustainability is a key factor in job satisfaction and retention.

Patagonia

Patagonia, the outdoor apparel company, is renowned for its environmental activism and commitment to sustainability. Patagonia’s mission statement, “We’re in business to save our home planet,” reflects its dedication to environmental causes. The company donates 1% of sales to environmental groups, supports regenerative agriculture, and focuses on producing durable, repairable products to reduce waste.

Patagonia’s strong environmental stance attracts employees who share similar values. The company’s commitment to sustainability and activism fosters a passionate and loyal workforce. According to Harvard Business Review, Patagonia’s employee turnover is significantly lower than the industry average, attributed to its strong mission-driven culture. 

Conclusion

The number of businesses embracing sustainability is increasing and it’s easy to understand why. Incorporating sustainability into business operations has a multitude of benefits, including attracting and retaining talented and motivated employees. 

The research above shows that those businesses that follow this path will witness improved employee morale, engagement, and loyalty. Those who do not could risk losing valuable employees who wish to work with purpose-driven organisations. The bottom line is that business sustainability is key to securing future competitiveness and growth.