CEO and Founder, Best Practice Institute, West Palm Beach, Florida
In 2016, enterprises are increasingly finding that sustainability and corporate responsibility are pivotal selling points in the quest to attract and retain top-tier talent. Some companies like UPS, Praxair, Verizon, The Carlyle Group and MGM have gone as far as to create Chief Sustainability Officer roles within their organizations. The millennial workforce of today, which now comprises the majority of the labor pool at 34 percent, according to a Pew Research Center study from last May, is largely responsible for the heightened emphasis on sustainable business initiatives. More than a paycheck, the young leaders of the world want to make a positive impact on society. Organizations are taking note and seeking the leadership of the United Nation’s (UN) Global Compact, as they pursue new strategies to engage a new kind of employee consciousness.
Best Practices Institute (BPI) senior executive board, which includes human resources and talent development executives from Hilton Worldwide, Bristol-Myers Squibb, Tyco and others, visited the UN Global Compact’s headquarters in New York City to learn about the 10 sustainability principles which have governed the Global Compact’s operating mission for the last 15 years. They met with the UN Global Compact’s General Counsel & Chief of Governance and Social Sustainability, Ursula Wynhoven, who explained the Global Compact’s objectives and purpose. The organization, a subdivision of the UN, is a voluntary initiative, which relies on CEO commitments to integrate sustainability principles into their business models and support the UN’s goals. The world’s largest sustainability initiative, the Global Compact, counts 8,337 corporate participants in 161 different countries, according to the organization’s website. Wynhoven agreed that the UN’s sustainability certification is an obvious marketing boon for companies looking to hire and retain elite millennial talent. She then described the organization’s 10 principles.
"We have ten principles in the areas of human rights, labor, environment and anti-corruption and we engage companies on what they can do to respect those principles as well as what they can do to have a positive impact on society and the environment," said Wynhoven.
The Global Compact’s 10 principles include: support human rights; ensure you are not complicit in human rights abuses; respect collective bargaining rights; eliminate all forms of forced labor; abolish child labor; eliminate discrimination in the workplace; take a precautionary approach to environmental conflicts; promote greater environmental responsibility; invest in eco-friendly technologies; and uphold a zero-tolerance policy towards bribery and all forms of corruption.
In a hyper-digital era where a poor corporate citizenship scandal can be magnified exponentially by Twitter, Facebook and other online channels, corporate deviance poses a significant threat to an organization’s recruitment objectives. But beyond recruitment, media exposure of irresponsible business practices can do irreparable damage to brand identity, which diminishes margins and share value, especially if the law gets involved.
Since healthcare in 2016 is such an important topic on a national, regional and local level, the risks of poor public relations due to negative news surrounding medicine, care or the economics of delivery is so great, it is critical to make sure that carefully crafted employee engagement strategies and human resources’ practices are employed to ensure that only positive internal and external feedback reaches the public sphere. Today, due to the prominence of healthcare reform, the industry in general is under a spotlight aimed directly at any activity that could end up as negative news in the press. Thus, any damaging issue, large or small, can hurt a provider, health system or corporation’s reputation.
Aside from healthcare, other industries such as banking can be susceptible to scrutiny as well. HSBC Holdings, mired in a high-profile tax evasion scandal related to its Swiss banking division, saw year-over-year profits fall 17 percent in 2014 on the heels of the bad press. The corruption headlines contributed to lousy stock performance, as the bank’s share value dipped 6.5 percent on the day it disclosed Q4 earnings, according to a Bloomberg story from 2015.
And then, there’s SeaWorld Entertainment, Inc. When the 2013 documentary "Blackfish" shed light on the aquatic theme park’s cruel treatment of its marine life captives, the negative publicity went viral and had a catastrophic effect on its stock. In SeaWorld’s August 2014 earnings report, weak revenue and attendance data caused its share price to plummet 33 percent in one day, according to CNN Money. SeaWorld executives blamed their underwhelming numbers on bad weather.
Balance sheet disasters like these are the reason that 90 percent of corporate boards have sustainability themes on their agenda, today, according to Wynhoven. UN Global Compact member and healthcare firm Bristol-Myers has a corporate board that exemplifies this trend. BMS Head of Organizational Performance Dottie Brienza, also a BPI board member who participated in the UN meeting, noted her company’s efforts to fight AIDS in Africa and remove racial barriers to specialty healthcare in developing nations. Brienza also highlighted the importance of sustainability initiatives in talent recruitment and management.
"Employees today, I think now more than ever are really doing due diligence on the companies or organizations that they want to work for to ensure they are good corporate citizens, that they give back and pay attention to sustainability efforts," said Brienza.
Beyond millennial’s sustainability awareness, Brienza also pointed to shifting labor demographics and argued that in the future the labor pool for Western companies will increasingly come from Latin America, China, India, the Middle East and Africa. Based on these projections, Brienza said companies should ask themselves, "What are we doing to engage in those markets around the globe and also what are we doing to understand the issues in those regions and countries?"
Wendy Branche, vice president of global organizational effectiveness at Tyco, the security company, seconded many of Brienza’s thoughts on sustainability and talent management. Branche, also a BPI board member, said sustainability initiatives are in place "not only to attract, but continue to engage people to a higher purpose." She highlighted Tyco’s vision of Zero Harm to People and the Environment, which guides the organization’s commitment to employee safety and environmental protection.
"Tyco’s commitment to zero-harm has most positively impacted the employee safety category," said Branche. In 2014, Tyco employees experienced 11 percent fewer work-related injuries—a reduction Branche attributes to Tyco’s policy efforts. Additionally, Tyco’s total recordable incident rate, (TRIR) which measures workplace accidents, fell below one percent to 0.97 percent last year, an unprecedented feat, she said. In 2012, Tyco’s TRIR was 1.3 percent, which indicates that its corporate responsibility initiatives are working.
Hilton Worldwide Vice President of Corporate Responsibility, Jennifer Silberman, whose company participated in BPI’s meeting with the UN, also noted the importance of sustainability in talent management. Hilton is a UN Global Compact member and has a presence in 97 countries. Additionally, the company has expanded or plans to expand into Myanmar, Guatemala, Tunisia, Georgia, Uganda and others, according to Silberman. Speaking to Brienza’s point of labor pool disruption for Western multinationals, Silberman cited Hilton’s efforts to engage international talent.
Specifically, Silberman discussed Hilton’s top-talent program, which identifies leadership candidates in Europe, Africa and the Middle East. Last year, the top-talent candidates were tasked with an assignment where they had to innovate a business model with an embedded sustainability component. Silberman also touted a Hilton 2014 commitment to impact one million young people through programs that promote life skills and career readiness and combat youth unemployment. "Promoting a sustainable corporate culture is especially significant to Hilton because a growing number of hotel general managers are nearing retirement-age," she said.
"We recognize that if we’re going to continue to sustain the growth that we have… we’re the fastest growing hospitality company in the world… we have to have the talent to support that, and a lot of that talent is going to come from young people," she said.
The healthcare industry’s corporate sustainability efforts have become an important component for meeting business objectives. Susan Camberis is Baxter International’s head of Human Resources (HR). Baxter provides acute care hospitals with products to treat chronic and acute medical conditions. Susan works with employees in the company’s supply chain and is involved in integrating sustainability measures into Baxter’s HR practices.
Susan also discovered that HR has a significant role to play in helping Baxter achieve its sustainability priorities and that sustainability matters to Baxter’s workforce. In the company’s recent bi-annual employee culture survey, approximately three-quarters of Baxter employees said the company’s sustainability programs were important to them.
Having a comprehensive sustainability program in place has helped corporations and healthcare organizations recruit and retain top talent. People want to align themselves with employers who demonstrate that they are willing to invest in their employees and add value to the communities.