Going Green to Recruit and Retain Employees

November 10, 2007

“I have never seen anything equal to sustainability as far as attracting, motivating, and bring people together.”  --- Ray C. Anderson, Founder and Chairman of Interface in AmericanWay Magazine, October 1, 2007

As the baby boomers retire, the US labor market is expected to tighten, as the new generation of workers is simply much smaller than the one it is replacing.  Indeed, by 2010, the Bureau of Labor Statistics is projecting a shortfall of 10MM workers in the US.   In such a tight labor market, employers will have to pull out all stops to continue to attract top talent.  One way employers are learning to differentiate is to market their companies to employees and prospects as green.

Indeed, green may be a powerful recruitment and retention tool.  According to an recent Ipsos Mori survey, 80% of respondents across 15 developed nations would prefer working for a company that “has a good reputation for environmental responsibility” – the figure was 81% in the US. 

Most interestingly, it appears that more respondents – across all countries surveyed - were more concerned about working for an environmentally responsible company than purchasing from one.  One potential reason: “employees feel a significant sense of responsibility and association with their employer’s actions concerning the environment.”

              Preference for an Environmentally Responsible Company

 

employee-retention-charts_v1pdf.gif

 

Data from “Corporate Environmental Behavior and the Impact on Brands”, Tangberg and Ipsos MORI survey, October 2007; n = 16,823; Green employment preference: % of respondents that agreed with the following statement: "I would prefer to work for a company that has a good reputation for environmental responsibility”; Green purchase preference: % of respondents that agreed with the following statement: "I would be more likely to purchase products of services from a company with a good reputation for environmental responsibility”

The study points out that German (and perhaps Japanese) workers have a seemingly low preference for working for an environmentally responsible company.  This may be a bit deceiving, however, as green may not be a differentiator in markets where strict environmental regulations are simply a threshold to compete.

Interesting, there was there was relatively little difference in preference based on age based on a blended view of responses across all 15 countries.  The youngest workers – 24 years or younger – have the lowest preference for working for an environmentally responsible company.  This is somewhat surprising, as GenY is often cited for its relative social consciousness.

Preference to Work for an Environmentally Responsible Company by Age

employee-retention-charts_v2.gif

Data from “Corporate Environmental Behavior and the Impact on Brands”, Tangberg and Ipsos MORI survey, October 2007; n = 16,823

 

Encouragingly, there are signs that employers are beginning to recognize the importance of green in their recruitment and retention efforts.  A recent survey of UK employers by Chartered Institute of Personnel and Development (CIPD) suggests that many companies are responding by greening their operations and encouraging more eco friendly behavior at the office.

                                   Employee Environmental Activities

  

employee-retention-charts_v3pdf.gif

Data from “Labor Market Outlook", CIPD, Summer 2007; n = 757 UK employers

 

Moreover, some companies offer green benefits directly to employees –including incentives to purchase a hybrid or take public transportation or car pool, encourage working remotely or even subsidizing the purchase of renewable energy at home.  CIPD offers a useful green guide for HR officials on its site.

Yet, there seems to be an obvious disconnect at companies today: while green is increasingly an HR issue, the HR department is positioned to influence environmental policy at less than half the companies surveyed.
 

                  Departmental Responsibility for Environmental Policy
  employee-retention-charts_v4pdf.gif

Data from “Labor Market Outlook”, CIPD, Summer 2007; n = 757 UK employers

As the labor market becomes more competitive, companies will have to maintain a competitive edge in order to continue to attract top talent.    

Green can be an important differentiator given the interest in working for an environmentally responsible company by workers globally.  As such, HR officials should weigh in in order to shape environmental policy and benefits.  Moreover, these officials should actively market their companies' green activities to prospects and employees alike; their ability to recruit and retain future talent in an increasingly competitive labor market may depend on it.   

Postscript: An insightful article, "How Going Green Draws Talent, Cuts Costs" appeared in the Wall Street Journal three days after my posting. 

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