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Management and Strategy News
Fifteen percent of employees have taken a pay cut to work for
sustainable companies
20-December-2012
by Bain
Fifteen percent of employees have taken a pay cut to work for a
company that embraces sustainable business practices; New Bain & company
Global survey
New York, Dec 20, 2012—A firm’s
sustainability efforts are an increasingly visible and important factor
in hiring and retaining top talent; this according to Bain & Company,
the global business consulting firm, in a newly-released “Employee
Perspectives on Sustainability” study.
As part of the study, Bain surveyed 746 employees of companies, split
equally among six countries: three developed (U.S., U.K. and Germany)
and three emerging market countries (China, India and Brazil), and
across 20 industries. Approximately 250 survey respondents were between
the ages of 21 and 30 years old; approximately 300 were between 31 and
40; and roughly 200 were 41 years old or older. There was an equal mix
of men and women who participated in the survey.
Seventy percent of employees surveyed in the study stated greater
concern for sustainable practices versus three years ago, primarily due
to a greater awareness of global issues and a perceived higher urgency
for companies to play a role in addressing them. Employees placed
greater importance on behaviors related to eliminating negative effects
of business practices, including ensuring employee safety, reducing
pollution, and eliminating child labor, than they did philanthropic
activities.
The study also suggests shifting perspectives around who is most
responsible for ensuring sustainability: the number of respondents who
feel that government can have the greatest impact on sustainable
business practices has fallen by 33 percent versus three years ago,
while the number who feel that employees and employers can make the
greatest change has grown over the same time period. Younger employees
are more likely to see companies as being most responsible for effecting
change.
Despite this strong employee sentiment, employers are still catching up.
Bain’s study found that only one-third of employees give their companies
high grades for fully incorporating sustainability into strategy and
operations. Companies must take note of this, as employee decisions are
increasingly impacted by their view of a firm’s level of sustainability,
particularly among younger employees:
-
Among those surveyed, one third of surveyed
employees in developed markets have excluded specific industries for
employment in the past because they do not match their personal
sustainability beliefs, while over 20 percent have excluded specific
companies. This awareness is higher among younger employees: over 50
percent of those under the age of 40 felt that a company’s approach
to sustainable business practices have influenced their decision
about accepting a job, as compared with 29 percent of those over 40.
-
This focus on sustainability has extended to
compensation. In developed market economies, over 15 percent of
those surveyed stated that they have taken a pay cut in the past to
work for a sustainable company. Looking ahead, over double that
percentage of employees indicated a willingness to accept a pay cut
of 5 percent or more to work for a global sustainability leader,
particularly among employees under 40 years of age.
-
Once within a company, younger employees also
expect to play a role in shaping their employers’ sustainability
agendas: 50 percent of those under 40 felt that they personally
influenced their employers’ sustainability efforts, versus only 27
percent of those over 40.
-
Bain’s survey also suggests that sustainability
is of even greater importance to employees in developing market
countries, where the effect of less sustainable environmental and
social practices tend to be more pronounced. Employees in these
countries were more likely to seek out sustainable employers, accept
lower pay, and play an active role in personally shaping their
firms’ sustainability efforts.
Bain’s survey also found that in developed markets
a small but growing segment of ‘sustainability enthusiasts’ are
particularly influenced by their firm’s sustainability behavior. This
group, which makes up about 10 percent of the sampled base, is more than
twice as likely to factor a potential employer’s sustainability into job
decisions and over 40 percent more willing to accept a pay cut of 5
percent or more to work for these companies. Once hired, enthusiasts who
identify their employers as sustainability leaders are more likely to be
loyal and more engaged while at work.
“We’re seeing direct evidence that individual attitudes on global
sustainability are affecting employers’ ability to recruit and retain
engaged talent,” said Jenny Davis-Peccoud, head of Bain’s Social Impact
Practice and lead author of the study. “We expect the number of
sustainability enthusiasts to grow in the future, making this even more
critical. Companies that engage employees in embedding sustainability
into their core business will have a competitive advantage in the war
for talent.”
Bain’s work in this area has further examined the range of ways that
employers engage their employees in sustainability efforts, with leaders
in the field going far beyond philanthropy to engage employees in
building sustainability into the firm’s operations. Companies are
increasingly providing sustainability training and tools, forming
working groups and forums for employees to identify sustainability
measures, and in some cases, going as far as to build sustainability
metrics into compensation and rewards.
“We’re seeing the era of piecemeal philanthropic activities give way to
an age where sustainability is becoming a part of the way that a firm
does business” says Davis-Peccoud. “Employees will demand to be at the
forefront of driving their employers to change.”
This press release originally appeared on the
Bain & Company Website
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