As the job market has tightened in many sectors, company performance on environmental and social matters has become an important consideration for people starting their careers and for the businesses hoping to attract those job seekers.
"People want to work in organizations that have a mission that they connect with in some ways," human relations expert Lars Schmidt told Newsweek. Schmidt is the founder and CEO of Amplify Talent and works with many leading companies to help them improve their workplaces.
"Any organization that is investing in ESG efforts, obviously you want to make candidates aware of that, and for the vast majority of candidates, that's going to be a positive," he said.
Job seekers care about a range of issues, Schmidt said, including, of course, job basics such as compensation and opportunities for advancement. But several surveys of employee satisfaction show a strong correlation with a company's performance on the group of characteristics known as ESG, or environmental, social and governance concerns.
The Society for Human Resource Management surveyed more than a thousand workers in 2022 and found that ESG initiatives factor into employee decisions to join and stay with a company, especially among younger workers starting their careers.
Across all age groups, the SHRM found, a little more than 4 in 10 workers said ESG factors were important to their employment decisions. Among millennials, that figure jumped to 55 percent of respondents.
The business consultant company Marsh McLennan surveyed students and young workers and found that the companies they found most attractive as prospective employers had ESG scores 25 percent higher than the average scores for comparable companies.
Environmental factors stood out as most important in the SHRM survey, and Marsh McLennan's work found that companies with high employee satisfaction have better performance on greenhouse gas emissions compared to other companies in their industry sector.
That type of correlation also shows up in Newsweek's various rankings of American workplaces. Among the companies on Newsweek's new ranking of America's Greatest Workplaces for Job Starters, 34 also appear on two other Newsweek rankings that include ESG measures, America's Greenest Companies and America's Most Responsible Companies.
Dell Technologies is one of them. Dell gets five stars—the highest possible rating—on both the lists of greenest companies and companies for job starters, and Dell's environmental performance score is the highest among the companies on Newsweek's ranking of responsible companies.
In an interview with Newsweek in December, Dell's VP of Sustainability and ESG Cassandra Garber cautioned against dismissing ESG concerns as "the soft stuff." She said sustainability is core to many aspects of the business and how employees view the company.
"People authentically care about this," Garber said. "Don't dismiss how powerful and how valuable it is."
Garber said she sees a direct link between sustainability and employee morale.
"That is absolutely inspirational, and people will give more than 100 percent when it's something that's meaningful beyond their day job," she said.
Schmidt said the growth in measures of ESG performance has also made job seekers more selective.
"They have so much more information to be able to do their diligence on a company and an employer," he said.
That information could include rankings such as Newsweek's and the verification of ESG pledges by independent assessors such as the B Corp Certification of company sustainability efforts and the Science Based Targets initiative for tracking climate action.
Schmidt said that also means companies must be able to back up their sustainability claims.
"Job seekers are a little more savvy to really scrutinize the substance behind the words," Schmidt said.
While companies should be talking up their ESG performance when recruiting talent, he said, they must also be committed to walking the walk on sustainability.
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