In Part 1 of our current blog series on the Purpose-Led Business model, we focused on how purpose in business leads to higher consumer advocacy, loyalty, and willingness for customers to pay more for brands they view as having a positive impact on the world around us.
This study tells part of the story…
The Kantar Purpose Study in 2020 revealed that over a twelve year period, those brands that were perceived to have a positive impact by leading with a purpose-led business model had a brand growth of 175% versus 86% for medium positive impact and 70% for low positive impact businesses.
It would be best to read part 1 of our blog, as per the link above, but in a nutshell the changing face of your customers to include a large portion of Gen-Z and Gen-Y (Millennials) consumers is at the heart of why the industry needs to continue adopting a purpose-led business model.
The spin on all of this is that those same Gen-Z and Gen-Y consumers are also your current and future employees which, again, emphasises the need for a purpose-led business model.
Employees and their choices
‘64% of Millennials won’t take a job if their employer doesn’t have a strong CSR policy, and 83% would be more loyal to a company that helps them contribute to social and environmental issues.’
This is according to the Cone Communications Millennial Employee Study which is a USA-based study, however it is good to remember that we are living in an ever-evolving digitised and globalised world where trends from one side of the planet can quickly catch fire on another side.
It is not unusual to employ an entire section of one’s workforce from a different country today.
In that same study ‘88% say their job is more fulfilling when they are provided opportunities to make a positive impact on social and environmental issue.’
Forecasts reflect that Gen-Z will make up 30% of the US’s workforce within the next four years, and this will certainly not be confined to the USA, as time marches on and new employees replace older ones.
Gen-Z is ‘The first generation to prioritize purpose over salary. They read Mission Statements and Values documents to select where they work and want their employer’s values to match their values. They expect consistency and authenticity and will call you out, often publicly, if they don’t see it. They will leave companies they believe are hiding or putting too much spin on bad news, ignoring their negative environmental or social impacts, or that have toxic workplace cultures.’ – This according to a study by WeSpire.
The study goes on to suggest that Gen-Z are obsessed with authenticity and that ‘pride in the organisation that they work for’ is paramount. Gen-Z have even higher expectations than Millennials, the study concludes.
75% of Gen-Z believe that work should be more meaningful than simply to earn a salary.
A Peakon study on employee comments suggests that Generation-Z is “the only generation to reference social concerns within employee comments. Raised in a time when the effects of climate change are making weekly headlines, it shows that they care deeply about the world around them.”
Employee Performance and Retention
Now that you have come to terms with the fact that you will inevitably be employing Gen-Z and more Millennials in your business as time progresses, it is a good time to point out that it’s not all about their expectations and employee welfare.
An engaged employee that intrinsically cares about the company they work for and what that company represents is an engaged employee and a sense of purpose, along with autonomy and mastery, is a key driver of employee engagement.
Employee interest and/or engagement beyond ‘doing their job’ proved to be rather low at 34% in Gallup’s Employee Engagement Poll.
It is not rocket science to appreciate that higher engaged and interested employees perform better and so will your company.
Engaged workers even reported better health outcomes.
And if none of this completely convinces you, then consider this nugget: Fast Company found that ‘most millennials would take a pay cut to work at an environmentally responsible company.’
Furthermore, this 2020 Global Marketing Trends Report states that ‘purpose-driven companies had 40% higher levels of workforce retention than their competitors.
The total cost of losing an employee can be as high as 1.5–2 times an employee’s annual salary according to some studies.
In a world that is changing fast, since the financial crisis of 2008 to the current global pandemic, our lifestyle choices have been questioned and these are being asked by Generations, Y & Z more than any other.
The argument for industry and brands to adopt a purpose-led business model is stronger than ever.
Are you ready?
Drop us a message on the form below and let’s talk.
Inspiration and the source for much of the content in this blog was sourced here:
More great reads on the Bigger Than Me blog.
- Eight questions every purpose-driven brand should ask
- What is Conscious Consumerism and why we should care?
- Consumers are changing and so are their choices
- Purpose-led businesses are gaining relevance says Unilever CEO
- What are socially conscious brands?
- A Socially Conscious Brand business model is the future