A majority of human resources leaders in Australia report a continued or increased pace towards an ESG and multi-stakeholder business approach, according to research from Mercer.
Mercer has released its Win with Empathy Global Talent Trends 2021 report, a survey of HR leaders around the world. According to data derived from Australian HR leaders, the bushfire crises, COVID-19, the Black Lives Matters protests and other issues have "spurred a renewed impetus for Australian companies to make progress on their ESG agenda as workforces demand action from their employers."
Of the 70% of HR leaders that reported continued or stepped-up pace on an ESG and multi-stakeholder approach, 55% said this was being accomplished by tying ESG goals to their purpose, and 40% are building ESG goals into the transformation agenda.
The report links a heightened sense of empathy with action, said Ephraim Patrick, partner (People Strategy and Organisational Enablement) at Mercer.
"I would say empathy is an expression of lived behaviours - it's not the words that you articulate in companies, it's the actual doing," he said. "COVID-19 has really ripped the band-aid off here, because companies were very vulnerable very quickly, and had to respond very consistently with daily and sometimes hourly check-ins with employees and address the emerging issues in the moment.
"I think there was the moment of truth for a lot of HR leaders as well. What we saw were HR leaders with authenticity are able to truly engage with people."
In some cases, the HR function has gained "massive momentum" in executive team leadership, Patrick noted.
Based on survey responses, Mercer anticipate workforces, as key organisational stakeholders, will continue to hold their employers to account in 2021 on the issues of climate change, individuals' health and financial wellbeing, gender equity and racial diversity.
Having a grassroots up approach to ESG acceleration, where employees are engaged in delivering and maintaining accountability, is key to authentic integration, Patrick said.
"Australia went through an awakening in 2020," he said. "We could all see it - bushfires, drought, pandemic, and so I think there was almost like no hiding any more. Australia has been seen as a good and compliant user of ESG norms, but there is that whole piece around looking at sustainability beyond ESG and take in the whole gamut and say as an organisation, how are we positioned and what is our response, and how do we tackle that through the customer, employee and investor lenses. That's an interesting one."
More than one-third - 35% of HR leaders - of those businesses evolving their ESG practices are tying metrics to the obligations of their executives, as well as executive pay, in most instances. In the area of Diversity, Equity and Inclusion, 42% are planning to improve pay equity analytics in 2021.
Companies, however, must get beyond metrics and analytics and put sustainable futures at the heart of their transformation agenda, Mercer noted.
Going beyond a surface level understanding of sustainability and diversity, equity and inclusion is "crucial" to attracting talent and investors, the report notes. It requires translating those metrics into strategies and programmes, but will result in "engaged and energised talent, authentic connection with stakeholders and higher levels of innovation and revenue growth," the Mercer study said.
"We know that a company's values and, more specifically, action on ESG is critical to attracting talent and investors. Companies that don't make meaningful progress in this area will pay the price, losing not only the trust in their brand but also the confidence in their ability to future-proof," Patrick said.
The report also revealed that Australian companies are lagging when it comes to meeting the needs of older, experienced workers via flexible career pathways.
"Australia has got a highly engaged, fit and healthy baby boomer population," Patrick said. "In Australia, 86% of baby boomers want to work beyond retirement age. That is great, the thing is that some of the other generations are not so happy about that because there's a real sense of there being a blocked career path in Australia. It's very pronounced. At the same time there's ageism at play."
The report noted that four out of five Australian organisations don't offer phased retirement.
"The question for Australia is how can the enormous experience and talent and value of an older population be leveraged in different, non-orthodox ways."
"Four in five Australian organisations don't offer phased retirement as an option to retain this vital cohort of workers. In addition to holding critical institutional knowledge, they are extremely valuable as mentors and foster collaboration, resilience and productivity."
Image credit Benjamin Child on Unsplash