A Thinking Business publication
As the conversation around responsible business continues to gather pace, it is clear that a growing proportion of the workforce is looking to employers for leadership around ethics and corporate values.
Values hold particular significance for Gen Z workers – those born between 1997 and 2012 – who are poised to represent over a third of the labour market by 2025. In a survey conducted by LinkedIn last year, a remarkable 87 percent of Gen Z workers said they’d be prepared to leave their current job if they found a company whose values more closely aligned with theirs.
The survey, conducted among more than 7,000 workers in the UK, France, Germany and Ireland, also showed that 60 percent of Millennials and Gen Z professionals now prioritise values when they are thinking about changing jobs, and 59 percent of all workers would strongly hesitate to accept a job offer if the company’s values did not match their own.
“The number one challenge for employers today, across sectors, is recruitment and retention,” says Trowers & Hamlins head of employment and pensions Rebecca McGuirk. “The war for talent is fierce, but the best businesses, with the best cultures, really stand out. If your organisation is struggling to appeal, it may be time to look inward at your culture, your ethics, your responsible business agenda, your work on diversity, equity and inclusion, and your environmental practices.”
Talent shortages are impacting every sector of the UK economy right now, and while many industries are responding with pay wars, most businesses cannot afford to just add 15 percent to starting offers in order to attract hires. Instead, the new way to stand out may just be corporate values, as potential employees seek out a more impact-driven working environment.
“Values are a particular issue for Gen Z,” says Nicola Ihnatowicz, partner in the Trowers employment team. “But they are not the only ones that care. Millennials and Gen X also increasingly put great store in ethics and values and, perhaps empowered by Gen Z, are able to express that more explicitly. This is now an essential for running a good business, because attracting a diverse pool of talent is good for business and good for the bottom line.”
The actions that companies need to take will vary depending on where they are on their responsible business journey. For those that already have clear, positive and well-articulated values in place, the challenge is around communicating those beliefs to the market and making sure they remain embedded throughout the organisation.
“For those that are not so far along the journey, or are perhaps intimidated by what competitors are doing and don’t know where to start, my advice would be not to get overwhelmed,” says Ihnatowicz. “Start with looking at where your culture is today. Most of our clients don’t have a bad culture, but that doesn’t mean they can’t do more on the environmental side, on the DE&I side, or on social mobility, for example.”
She argues it is about getting a good picture of where the organisation currently sits and then identifying areas where it might be able to do better, which may mean working hard to address the progression of women or seeking to do more to support neurodiverse colleagues in the workplace.
“It’s about finding a starting point first,” says Ihnatowicz, “and in order to do that you need to make sure you have the engagement of senior people within the business. This becomes impossible without that.”
Failings of corporate culture continue to hit the headlines as a reminder to business leaders of the perils of getting this wrong. Organisations as diverse as the Metropolitan Police, the Post Office, the Confederation of British Industry and the England & Wales Cricket Board have also suffered accusations of deep-rooted cultural issues in the last few years, with toxic corporate environments frequently cited as a contributing factor when businesses fail. Since the #MeToo movement took off in 2017, employees have become much more proactive in calling out inappropriate behaviour and corporate ethics have been pushed into the spotlight.
On the other hand, the positive drivers for companies to get better at enhancing their company cultures are also increasingly evident. “A good culture is really attractive to potential candidates and you will get the pick of the talent market if your values are clear and align with those of your employees,” says McGuirk. “If your people are happy, they are your most powerful marketing tool.”
With more generations working together in increasingly diverse workplaces, there are growing demands on leaders to take a more nuanced approach to management. It can be hard to oversee teams that include people of all different ages. Recent research from the London School of Economics and Political Science, in collaboration with consulting firm Protiviti, found employees who are much younger than their managers report lower productivity than those closer in age, due to a lack of collaboration between employees of different generations.
Another report from LinkedIn found that one in five Gen Z workers reported not having had a single conversation with someone over the age of 50 in their workplace within the last year.
Bringing people together is a key challenge for leaders today: “If you are a manager, it certainly makes your life easier if you can engage and interact with everyone on your team in the same way,” says McGuirk. “But the reality today is that you have to take a more nuanced approach, and that requires more thought. Diversity brings many advantages, but it is not what many managers are used to.”
The need to tackle productivity and skills gaps in the UK employment market has been top of the agenda during the election campaign of 2024, and there is no doubt the new government will now prioritise efforts to galvanise workers into action.
Data suggests it will be those companies that are clear on their corporate values and put those into action on a daily basis that will get the most out of the employees of the future.
