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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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