Building Purpose-Driven Organizations: How HR Can Take the Lead
While much of the current debate about the post-pandemic future of work has focused on hybrid working and whether or not people should be given more flexibility, employees themselves have gone one step further. Instead of making choices only about where, when, and how they work, they have begun asking why they work, too.
The ‘why’ question is particularly relevant because it implies that workers are not only concerned about how much and where they work, but care just as much about their work’s quality and purpose.
Purpose has become a blind spot business can’t afford
As a result of people’s changing expectations of work and work environments, not paying attention to or blatantly ignoring the growing importance of purpose has become a major blind spot for many companies. And it is not one they can afford.
In the current context of tight labor markets and the Great Resignation, companies need to use every tool in their arsenal to attract and above all retain the talent they have. Millions of people around the world are rethinking their relationship with work and as a consequence are leaving their jobs. In the US alone, more than 15 million workers have quit their jobs since April 2021.
Thus, hanging on to your existing talent and attracting new hires is becoming a mission impossible for more and more businesses. Meanwhile, companies are largely out of touch with what is driving people’s decisions to leave.
While 63 percent of US workers admit the pandemic has dramatically shifted their priorities and 82 percent of them say it is important for a company to have a purpose, companies are far too often fixated on the more transactional elements of work (e.g. compensation and benefits). This creates a mismatch between what employees want and what companies are prepared to give.
And as C-suite leaders will try to bridge this divide in an attempt to retain and attract talent, they will need to increasingly rely on their HR departments to help them connect the business and employees.
Making work meaningful is a win-win
Behind every decision to leave a job is a myriad of reasons, be it lack of appreciation and purpose, insufficient work-life balance, or better opportunities elsewhere. While a lack of purpose isn’t the only reason companies are struggling to retain talent, organizations have nothing to lose and everything to gain from becoming more purpose-driven.
Having organizational values that are reflected in decisions, conversations, and your company’s behavior across all levels and a clearly defined mission statement can go a long way in giving people that one extra reason to work for you and feel satisfied with their job.
For LinkedIn’s CEO Ryan Roslanski, the current wave of changes in the workplace is a great opportunity for people to do work “they love at companies they feel passionate about, leading to greater success for organizations who engage their employees with empathy and trust.”
In other words, running your business with a purpose in mind is a win-win situation. For both your company and your employees. And your HR department will be instrumental in making this happen.
HR professionals will help introduce and uphold purpose in the workplace while at the same time, their work will directly benefit from being part of a purpose-driven organization – namely by finding it easier to engage existing workers and attract new ones.
The power of purpose and why it matters
#1. More enthusiasm
Employees who feel aligned with the company values are more enthusiastic and committed to maximizing their potential. Work goes from a job to a source of pride and personal investment.
#2. Stronger resilience
This creates a better and stronger relationship between companies and their workers, as well as between companies and customers. Thus, organizations that are purpose-driven tend to be more resilient to market instabilities.
During the last financial crisis in 2008, for instance, the so-called Certified B Corporations (i.e. businesses that balance purpose and profit) were 63 percent more likely than other businesses of a similar size to make it through the downturn. Similarly, a 2018 study of 1,500 C-suite leaders found companies that defined and acted with a great sense of purpose outperformed financial markets by 42 percent.
#3. Better performance
Corporations with engaged, purpose-led employees deliver 21 percent higher profitability than their peers, and according to Harvard Business Review, purpose-driven companies are (among other things) better at product launches and major transformation efforts.
One more reason why HR should pay attention to purpose
Yes, aligning your organization’s and your employees’ purpose and values makes business sense, and yes, companies that do so tend to perform better than their peers.
But there’s one more reason why you should consider running a more purpose-driven organization: demographic change.
While it is true that COVID-19 has helped place purpose on the map of new work-related demands, the trend itself was always going to become a key one. It was just a matter of time.
That’s because studies have shown that younger workers (especially Millennials and Gen Z’ers) are more purpose-driven when it comes to working. According to the Cone Communications Millennial Employee Study (published before COVID-19), 64% of Millennials won’t take a job if their employer doesn’t have strong social and environmental values. What’s more, Gen Z is the first generation to prioritize purpose over salary.
We expect that by 2025, Millennials will account for about 75 percent of the global workforce, and the proportion of Gen Z’ers will continue to grow steadily as well. Consequently, purpose will only become more important.
And this is already having an impact on the ground. One good example can be found in the way Gen Z’ers work with technology.
According to a General Assembly survey, young people are far less interested in working in tech for the tech’s sake compared to their older peers. If and when they choose to work with technology, it’s usually in the fields that prioritize the “human element” such as UX design or digital marketing. They are interested in knowing how technology relates to people and how, for instance, data science helps solve health, environmental, and business challenges.
Zoom in on your purpose statement and revise your company’s culture
For businesses to survive and indeed thrive, it is no longer a question of whether but when and how organizations should become more purpose-driven. Many companies have previously paid lip service to purpose and its growing importance to workers. But COVID-19 and the generational turnover are driving change here.
Organizations no longer have a choice but to invest more in ensuring their purpose is clearly defined and better aligned with employees to ensure they will remain competitive and in business. Ultimately, they will need to upgrade their workplace culture to ensure that decisions, conversations, and behavior across all levels are integrated with that purpose.
And there’s only one department that will be able to drive and lead this change: Human Resources
That’s because HR professionals with strong business acumen are best placed to connect company-level purpose with employee-level purpose. They understand how the organization’s values reflect the broader world and how these core values help motivate employees themselves.
HR’s role is to help their organization identify its values, understand how these resonate with employees, update the organization’s business culture accordingly and then work with the management to ensure the company also lives by these values in practice. The result will be a more productive, engaged, and motivated workforce.
Moreover, having a clearly defined purpose also helps HR with talent acquisition. In the current tight labor market that is heavily tilted in favor of job seekers, having values that resonate with candidates can make or break a job offer. There are many examples of companies that have smartly used purpose and organizational values to their advantage, including Nike, Netflix, and Buffer.
Ultimately, while identifying and staying true to your business culture and purpose may not look like a solution to all your business challenges, it is a first (and necessary) step towards ensuring your organization becomes future-proof.