A new investment mega-trend is pushing companies to improve recruitment methods.

Over the last 20 years or so a new mega-trend has emerged in the hard-nosed world of investing. This is known as Environment, Sustainability and  Governance (ESG) and is basically all about doing business ‘responsibly’.

Surprisingly, for the investment industry, ‘responsibly’ does not come with any particular connection to making money. Yet today we are seeing leading global investors such as Blackrock, Amazon, Google and others pledging to radically increase the proportion of their investments which are ESG-based.

What’s going on? And what does this have to do with recruitment?

Investors are latching on to the popular mood in the western world about taking care of the environment. This has branched out into social and ethical concerns about how businesses are run and the people they affect.

So ESG includes how corporations respond to climate change, how good they are with water management, how effective their health and safety policies are in the protection against accidents and how they manage their supply chains. But it also includes how they treat their workers and whether they have a corporate culture that builds trust and fosters meaningful team interaction.

Now the connection between recruitment/retention/employee satisfaction and ESG becomes clear. What’s the point of looking after the planet if you don’t look after the needs of employees who inhabit that planet?

Recruitment policies in industry over the last 100 years have been little short of disastrous. Gallup and other consultancies routinely report that around 70% of employees are either partly or wholly disengaged. That means people either hate their jobs or else are simply unhappy with their jobs.

Until recent times, management were not bothered that people hated their jobs. They had little concern for what employees ‘felt’. It only mattered that the work got done. Work was not there to be enjoyed, it was there to be suffered.

But more and more, managers and investors are aware that if people are unhappy at work, this often translates into poor mental health and a miserable home life. This is completely out of kilter with the ESG mega-trend which demands a duty of care for staff.

We would argue that employers should be seeking to match job roles with natural talent because 1) it’s good for business and 2) it’s good for employees. But ESG adds a new imperative. If businesses continue to use old-fashioned résumé-and-interview recruitment methods that routinely put people in the wrong jobs and cause misery, they will be sidelined by investors. That means a fall in the company share price, an increase in the cost of borrowing and loss of competitiveness.

It’s not just investors. Entire supply chains are looking for players who are moving with the times and will not be an embarrassment in the future. No CEO will choose a supplier who may come to public attention because of a toxic working environment. That’s guilt by association.

Looking on the bright side, there are now more reasons than ever to recruit primarily by talent, not skill. Speed and quality of work rise dramatically whilst deadlines are met. Efficiency and productivity spiral upwards. Team and organization morale increase. Employees stay longer in post which protects company knowledge and builds a stronger culture. The organization becomes a ‘talent magnet’ making recruitment easier. And now, your company becomes more attractive to investors and lenders and more likely to keep its place in the new economy supply chain that is taking root post-Covid.

Method Teaming is the proven key to building your organization with talent and so becoming attractive to investors. Get in touch for an initial chat to find out how we can help. We look forward to hearing from you.

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