Last month, we considered ‘Why sustainability practices should be part of your HR strategy’. This month, we present the opposing view:

While the future of Australia’s Emissions Trading Scheme is in some doubt, one thing we can be sure of is that sustainability will remain on the national political agenda for some time to come. But is sustainability a business – as well as a political – issue?

The ‘social licence’ theory of sustainability

The last decade has seen the growth of triple-bottom-line reporting and senior corporate sustainability roles in business. However, many of these initiatives are based on the idea that businesses need a ‘social licence’ to continue to operate in democratic society. The theory is that businesses need to demonstrate their social and environmental responsibility, in order to maintain their social licence.

Sustainability as a way of attracting talent

A second reason why sustainability might be a business issue is that people want to work for organisations that are socially and environmentally responsible. Under this theory, if your firm can build an employer brand which is associated with social and environmental responsibility, then talented employees will flock to you. And as the economy picks up, Australia’s ageing population will mean that the war for talent – notwithstanding the ceasefire of the last 18 months – will be more vicious than ever. So any advantage that firms can create is worth investing in. But the question is: do employees really care about the social and environmental responsibility of their employers?

Sustainability is a second-order issue for employees

Beaton Research & Consulting has been researching attraction and engagement of talent in Australian professional service firms for the past decade. In November 2008, we completed a study that collected the responses from over 6,700 partners and staff working in professional organisations including legal, accounting, patent attorney and engineering firms.

One question we sought to answer was: what is really important to recruits when they are considering joining a firm? To this end, we asked respondents two specific questions:

1. What is MOST IMPORTANT to you when considering a firm as a place to work?
2. If you received similar job offers from two firms, what would make you choose one firm over the other?

Respondents were then provided with a list of 16 attributes, which included ‘social and environmental responsibility’. Respondents could select more than one attribute. The results for ‘social and environmental responsibility’ were surprisingly – and consistently – low. In the legal industry, only 12.1% rated social and environmental responsibility as an important consideration. In order of importance, it was the 14th attribute out of the 16 measured. (See Fig 1. below.)

Fig 1. Drivers of consideration – partners and staff of Australian law firms

When it came down to choosing between two similar employment offers, social and environmental responsibility was cited as important by only 5.8% of those in the legal industry. (See Fig 2. below.)

Fig 2. Critical factors – partners and staff of Australian law firms

Similar results were seen in both the accounting and engineering professions. This was particularly surprising in the engineering sector, as many consulting engineering firms have invested heavily in their green credentials. Only 14.1% of those working in consulting engineering firms rated social and environmental responsibility as an important consideration. In order of importance, this was 13th – only slightly higher than in the legal profession. (See Fig 3. below.)

Fig 3. Drivers of consideration – principals and staff of Australian consulting engineering firms

Whilst these data relate only to professional service employees, I see no reason why the results would be different in other sectors. If anything, I would expect professionals to care more about social and environmental responsibility than those in lower-paid jobs, where pay and conditions are more immediate concerns.

What this means

The inevitable conclusion is that building a reputation for social and environmental responsibility is not going to help firms win the war for talent. What people really want from employers is to be treated well, be assisted with professional and career development, and have a life outside work. Essentially, employees want to know ‘what’s in it for me’. And the WIIFM needs to be direct and tangible. This gels with my own experience. In my previous career as a lawyer, one of our clients was, for a time, a big tobacco company. What surprised me was that without exception, all the people I met from the company raved about it as an employer. The pay, benefits and opportunities for employees were substantial. And I’ve got to admit that, for a moment, I even considered working for them. This just shows that a relatively intangible, remote benefit – like working for an organisation that is socially and environmentally responsible – can be trumped by more immediate, direct benefits. Even if the contrast is stark, as with a tobacco company. So does this mean that employers should ignore sustainability? The answer is not a simple yes or no. The crux of the issue probably lies in understanding where sustainability is – and is clearly not – an issue. I think that businesses do need to maintain their social licence to operate, and this is where providing evidence of sustainable practices is critical. But if your aim is to recruit talented people in a competitive market, there are other important things that require attention. [Ed: To read more about how employees perceive firms who adopt socially responsible practices, see Maia Gould's article: 'Social Responsibility: an innovative idea'.]

Tristan Forrester is a Managing Consultant at Beaton Research & Consulting, a leading global research and consulting firm. As a former lawyer, he maintains a key interest in how firms retain their talent.

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