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Date posted: 27th July 2023

27th July 2023

ESG-Centered HR Strategy: No Longer Optional for Organizations

ESG-Centered HR Strategy: No Longer Optional for Organizations

The article discusses the importance of integrating ESG (environment, social, and governance) values into HR strategies to attract and retain top talent. The CIPD’s Good Work Index 2023 highlights the need for a renewed policy focus on good work and improving job quality, narrowing the gap between public and private sectors, and making work more flexible and attractive. ESG integration is crucial for long-term organizational sustainability and can lead to a competitive advantage and better employee engagement. ESG leaders are expected to attract top talent as capital and talent flow from ESG laggards.

From the original article published in Spiceworks and written by Odette Engelbrecht, Asia Pacific Talent Acquisition Senior Director, Boston Consulting Group:

HR leaders must prioritize ESG values to attract and retain top talent this year

The role and responsibilities of the HR function have evolved considerably over the past three years. The combination of a global pandemic, ‘quiet quitting,’ increased awareness of social issues, and the growing importance of sustainability has culminated in HR leaders necessarily shifting focus to an environment, social, and governance (ESG) centered talent strategy. The opportunity to make a true societal impact by contributing to solving complex challenges such as climate change is more attractive than ever to today’s talent pool.

This shift was illustrated in a recent report from Marsh and McLennan Advantage. The report – titled ‘ESG as a Workforce Strategy’ – found that top employers’ ESG scores are 14% higher than the global average, depicting a clear connection between employer ESG and employee satisfaction. The report also uncovered that the companies most attractive to students and young professionals have ESG scores 25% higher than the global average, a critical consideration in today’s volatile labor market.

The correlation between ESG and employee satisfaction is more apparent than ever. Now is the time for recruiting and HR departments to integrate ESG values into long-term recruitment strategies.

A Company-wide Imperative

One of the biggest challenges companies face as they attempt to take action on ESG issues is overcoming a fragmented organizational approach. For example, human resources traditionally managed DEI topics, while sustainability was managed within operations. But for an ESG strategy to be successful, it must be implemented company-wide, across functions, and supported by the C-suite.
A holistic approach elevates ESG from a compliance matter to a source of competitive advantage. Rather than seeing ESG commitments as an obligation or a societal contribution, leading companies understand that it’s critical to the employee value proposition and, ultimately, to its innovation engine.

As ESG is embedded across the organization – from strategy to operations and culture – recruitment and HR leaders can articulate compelling, authentic ESG narratives to prospective and current employees.

Three Strategies for Recruitment and HR Leaders

How should recruiting and HR departments help organizations advance ESG objectives? First, it requires changing the core culture of an organization. To do so, leaders must inspire employees with the ESG strategy and consistently educate them about it while updating policies and practices.

Advancing ESG goals also requires improving the digital maturity of recruitment functions to conduct business more efficiently and better compete for top talent. Recruitment technology, in particular, frees up human capacity through automation and empowers businesses to deploy that capacity to higher-valued activities related to ESG. The use of AI-driven solutions can also reduce bias in recruitment processes.

While each component of ESG is important, no area is as urgent as climate action. As sustainability becomes even more critical and sustainability roles evolve and multiply, HR teams must consider how to grow and develop these employees.

Read the full article to find out the three strategies for organizations to integrate ESG values into their long-term recruitment and retention plans here.


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