By Olivier Meier, Mercer
The sustainability concept and ESG analyses (environmental, social, and governance) are often used by investors, but they are becoming relevant for all parts of the business.
- Executives are increasingly concerned about how their organizations are perceived on everything from welfare practices to progress on climate and ethical practices. The pressure from management is trickling down to HR and mobility teams.
- International HR teams will need to review talent mobility practices to take into account ESG factors. Environmental issues, the wellbeing and inclusion of the mobile workforce, and how mobility can contribute to the resilience of the business will need to be assessed. Regular reporting about ESG progress will increasingly be expected.
- We are also seeing the rise of stakeholder capitalism: organizations need to create value not only for shareholders but also for consumers, employees, and local communities.
How do we track the environmental impact of talent mobility? Is talent mobility benefiting the business units and local communities that host assignees? Can a distributed workforce composed of expatriates, locally hired foreigners, and international remote workers contribute to business resilience?
Reputation. Two-thirds of organizations report that ESG will be a crucial focus for 2021 (see details below from Mercer's 2021 Global Talent Trends Study). All departments will be required to contribute toward the ESG goals including international HR and mobility teams.
Employee engagement and experience. Employees prefer to work for an organization that has responsible rewards (fair pay, ethical wages in the supply chain, pay equity), protects employees’ well-being, has a strong mission, values, and purpose, and shows concern for the environment and social equity.
Resilience and business efficiency. Businesses need to prepare for future shocks and maintain business continuity in times of crises. A sustainable business model also brings higher return on investment over the long term and more efficient talent mobility programs in the short term.
ESG goals: What does HR think will move the needle?
||Tying ESG goals to our purpose and keeping this purpose visible to employees
||Building ESG goals into our wider transformation agenda
||Ensuring all executives have shared obligations for ESG metrics
||Embedding select ESG metrics related to goals into executive scorecards
||Obtaining external recognition fo progress on sustainability goals
Increasing awareness and providing training on ESG issues is usually a first step. Education programs should not be purely prescriptive and need to help line management and assignees reflect on possible initiatives to limit the environmental impact of mobility or use assignments to foster ESG goals in the host locations. Mobile employees can play a role as ambassadors spreading best practices.
Environmental considerations should be taken into account when working with external vendors. Procurement guidelines might already be in place at a corporate level, but they could be complemented by questions focused on mobility issues.
Information about the travel or relocation carbon footprint and how to compensate for it should be captured. This information might already be available (e.g. in business travel management systems), but it should be consolidated and reported as part of the mobility program assessment.
Retention is not driven purely by pay. Organizations need to put more emphasis on the needs of the whole person (e.g. community, purpose, job satisfaction) and also take into account the needs of families.
New mobility models require new forms of social interaction, inclusion, and employee support. The productivity of the remote workforce will partly depend on a company's ability to support the wellbeing of remote workers.
Career parity can be an issue for the mobile workforce if not all employees have the same assignment opportunities or do not receive adequate support for their specific needs.
Training the local workforce should be part of the assignees’ performance indicators. Opportunities for employees to partner with local communities and do charitable work could also be encouraged.
Sustainability goals are set by top management, but empowered HR and talent mobility teams can determine what these goals mean at a practical level and work to achieve them.
Objectives should be turned into quantifiable values and KPIs that would allow for regular reporting to top management. Running an ESG analysis focused on mobility can keep the discussion directed to real-world results.
The company’s reputation should not be the only driver: the value of sustainability for all stakeholders at all levels of the organization should be well understood and communicated.