What are some of the key reasons why employees choose a particular company and what determines how long they stay? There are some obvious answers like compensation, benefits, growth opportunities, or flexible schedule. But another factor is becoming more and more prominent: purpose. According to a new report by global brand consultancy Calling Brands, corporate purpose – a deeper role that goes beyond satisfying commercial and operational goals and demonstrates exactly why a business is valuable to all its stakeholders – is emerging as a powerful driver of employee attraction, retention, and productivity.
The report is based on interviews with HR and Communications chiefs from large multinational companies and a survey or over 4,000 workers in Germany, the UK, and the U.S. This research found that after pay and benefits purpose is the most important factor for employees when considering who to work for and it is a very significant driver of discretionary effort and loyalty. It ranks ahead of other traditionally valued factors such as level of responsibility in a job and even career progression. To that effect, 65% of respondents claimed that purpose would motivate them to go the ‘extra mile’ in their jobs and nearly two-thirds (64%) felt more loyal toward businesses that aim to do more than simply create shareholder value.
These findings are on some level very intuitive. After all, who doesn’t want to see the value of their work mean more than just a paycheck? Purpose is a company’s ambition and commitment to make a difference in the world that provides this much-needed motivation. Demonstrating how strong this desire is helps drive home a crucial point for businesses.
When a good employee leaves, it takes time and resources to find a replacement, it disrupts company operations, and translates into losses to both the immediate bottom line and longer-term business potential. Since employees increasingly seek the alignment between their personal values and the values of the business they work for, purpose translates into a real competitive advantage because it helps companies attract and retain top talent while avoiding the costs of personnel turnover. That is why companies should consider it as one of the core elements of their strategy and operations.
Calling Brands experts conclude, “People want to work for a good business (…) all it needs is for employers to start making the argument – and act on it. (…) This is not an HR issue: this is a Board issue.” That is the message that every employer must take to heart.
Corporate purpose is closely intertwined with good corporate citizenship, or CSR. Consequently, the business case for purpose demonstrated by the Calling Brands study complements the related argument that corporate citizenship is not just good business, it is a good business strategy. Especially in the global context, being a good corporate citizen can lead a business to prosperity and at the same time help build better societies, protect human rights, and facilitate economic development.
As such, corporate citizenship – and purpose – must go beyond philanthropy and extend to broader socio-economic management that affects how a company works in an interconnected ecosystem of countries where it operates. What that means in practice and how companies can become CSR 2.0 leaders was the topic of today’s conversation hosted by Business Civic Leadership Center’s Executive Director Stephen Jordan with Katherine Pickus, Vice President of the Abbott Fund and Vice President of Global Citizenship Policy of Abbott Laboratories. Testifying to the importance of having a corporate purpose and the value of employees devoted to that purpose, Pickus noted, “CSR is about more than philanthropy, it’s about tapping into the value that the business brings. (…) We get our best ideas from people embedded in the business who are thinking about corporate citizenship in an innovative way.”