This article is brought to you by Mercer.
The ability to attract and retain talent is one of the most pressing issues for companies in Hong Kong as they plan for post-COVID-19 recovery and growth opportunities.
While border restrictions over the past two years have impacted the flow of human capital, competition for talent will only intensify as companies invest back into the business again – and most are already doing so.
While remote working, wellness, and flexibility are all important talent management trends of the post-COVID landscape, a clear position and commitment to environmental, social, and governance (ESG) can also be an important differentiator when competing for talent.
While ESG and sustainability are not new concepts, the pandemic has catapulted them to the top of businesses’ agendas. According to a 2015 Nielsen survey, 66% of consumers globally (and 73% of Millennials) are willing to pay more for sustainable products, which include being eco-friendly, ethical, and contributing to the community or planet.
This trend grows stronger in younger age demographics, so if you are looking to capture the current and future generations of customers, ESG is important to embed into your company’s purpose, value, culture, and brand.
“Employees, especially the younger generations, are less interested in working for organisations that don’t have a purpose aligned to their values,” said Vicki Fan, Mercer Hong Kong, CEO.
One in three employees would prefer to work for an organisation that shows responsibility towards all stakeholders, not just shareholders and investors, according to Mercer’s Engaging Today’s Workforce: Insights from 25 Years of Research report.
The Harvard Business Review (HBR) reported in 2016 that organisations that have clear ESG actions and accountability show 16% higher productivity, with measurable impact on shareholder value.
As a workforce strategy, ESG can help address or close gaps on a number of challenges, including more complex employee expectations, the evolving dynamics of employee-employer relationships, organisational resilience, future of work, and talent. Moreover, ESG-led employee retention has benefits beyond market competitiveness.
Research indicates 55% higher employee morale and up to a 50% reduction in employee turnover, saving 90-200% of a retained employee’s salary, the same HBR report said.
ESG requires a people-centric transformation approach, one based on authentic dialogue and true co-creation. Measuring, managing, and reporting are key to ensuring progress and accountability.
Three-quarters of boards are not yet mandating ESG targets for executives, and when they do the onus is often on CHROs (23% of CEOs/COOs have environment metrics versus 44% of CHROs).
Being explicit about your organisation’s ESG goals is what lies behind a winning ESG strategy. Organisations that are the most successful in their ESG endeavours not only tie their goals to their purpose, they also keep the process transparent to their employees. Just over three in five (63% and 64%) businesses in Hong Kong and China, respectively, say this action has the biggest impact, according to the Mercer Global Talent Trends 2021 report, Hong Kong and China edition.
As vaccination rates go up and borders reopen, employers must expect more movement in human capital. Companies in Hong Kong are already seeing or started experiencing “The Great Resignation” – an area that needs meaningful and preventative action.
“More than ever, employers need to listen to their people,” Fan said. “Organisations should be proactive in thinking about the levers of employee attraction and retention, and embedding ESG as a key lever of their workforce strategy.”
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