In 2023 treating your people well goes beyond the provision of good pay, benefits, and a positive working environment. More and more people are looking to work for a company with Purpose.
The flip-side of this statement is that companies who are reinvigorating their Purpose, solidifying their ESG strategies, and engaging their people in the process will create the conditions for a more resilient workforce.
Your People are your customers too. Yes, they’re an asset. In addition to the work they do to contribute to the provision of your products and services, they're also advocates. They’re ambassadors. They are the human face of your company and, some would say, your most important customer. Even if they don’t buy your products (usually a cost decision, sometimes a supply issue), they will certainly buy into what you think, say and do. And if they don’t, they will likely speak with their feet! And there is a very real cost associated with that.
“Nearly two-thirds of US-based employees we surveyed said that COVID-19 has caused them to reflect on their purpose in life. And nearly half said that they are reconsidering the kind of work they do because of the pandemic. Millennials were three times more likely than others to say that they were reevaluating work.” - McKinsey & Co.
Don't let making a living prevent you from making a life - John Wooden
1. Before the pandemic, job tenure was already on the decline. Once upon a time the average employee once stayed around five years in a role, however a 2021 report from the Bridge Group found tenure today can be as low as 1.8 years.
2. According to a Gallup study, employee turnover costs US businesses a trillion dollars every year.
3. When measured in monetary terms, the direct costs of replacing an employee can range from one-half to twice their annual salary. So, a 100-person organisation that provides an average salary of $50,000 could have turnover and replacement costs of approximately $660,000 to $2.6 million per year.
If we don’t know, how can we grow? Companies have been tracking KPIs (Key Performance Indicators) for decades to assess and project their success. In our work at Barefoot Citizens Consulting, we’ve been exploring a new form of KPIs – where the ‘P’ stands for Purpose. Key Purpose Indicators™ are based on the belief that Purpose drives people, people build communities and communities change the world.
Purpose is no longer intangible; it has proven to be the key differentiator between organisations who succeed and thrive, and those who stagnate or stumble. For the past decade, companies with a social conscience have outperformed their rivals by 120 percent year on year. (Keohane, K. 2016, The Case for Purpose Driven Brands) and this number continues to grow year on year.
Our Key Purpose Indicators are directly aligned to a business' purpose and the goals it sets itself to achieve environmental, economic and social outcomes, increasingly known as SROI (social return on investment). Key Purpose Indicators sit alongside financial KPIs and measure purpose engagement through four key organisational pillars:
1. Employee engagement
2. Customer engagement
3. Supply chain engagement
4. Key stakeholder engagement
Key Purpose Indicators are not based on annual surveys; they are a continuous assessment tool tied to your overall business outcomes. They provide ongoing data insights and enable organisations to pull various levers to gain deeper insights into their purpose journey and effect change.
A growing list of organisations recognise that they have a responsibility to the communities in which they operate. Consumers making purchasing decisions based on a company’s attitude and commitment to being socially and environmentally responsible has played a role in this recognition, but it’s not the only reason. Programs focused on energy efficiency and CO₂2 reduction, for example, have very clear cost benefits.
The time is now to associate Purpose not with trade-offs, but with competitive advantage and enduring business performance. Without a holistic approach to Purpose, a company cannot truly reach its full potential and thrive.
At Barefoot Citizens Consulting, we believe that Key Purpose Indicators are an essential measurement alongside other business metrics to assess, strategise for, and ensure future success. It is predicted that by 2025, 75% of the workforce will be made up of millennials and, so too, a large proportion of the consumer base. With over 60% considering a brand’s social reputation before purchasing or making employment decisions, Purpose is no longer just a nice thing to have — it’s a critical component of business and must sit in the centre of business planning.
Key Purpose Indicators are directly linked to a company’s ESG plan and the ability to measure not scope 1, 2 & 3 emissions but rather the impact words, thoughts and deeds are having on a business’ greatest asset - its people.
Overall, companies with strong ESG policies tend to have improved long-term performance. They are better positioned to manage risks, capitalise on opportunities, and appeal to socially responsible job seekers, consumers, and investors.
If you are interested in talking about Key Purpose Indicators for your business to help you drive bottom line growth get in contact today. Profit with Purpose, made possible.