Business leaders the world over have been urged to review their approach to employee engagement after a recent study carried out by the global brand consultancy group ‘Calling Brands’ has shown a considerable shift in employee attitudes towards work. The research has revealed that after pay, purpose is the second most important factor for employees when considering who to work for, and is a very significant driver of discretionary effort and loyalty.

The research report entitled “Crunch time: The Power of Purpose” is the first of its kind to study the impact of corporate purpose on employee attitudes. Interviews were conducted with HR and communications chiefs from multinational organisations, which included among others Unilever, Time Warner, Bupa, Santander and Experian. In addition to these interviews, an international poll was also carried out by YouGov surveying 4,202 people in the UK, Germany and US about their attitudes to purpose at work. In the latter, respondents were asked to rank in order of importance workplace culture, purpose of the organisation, level of responsibility in their role, pay and benefits and finally, opportunity for promotion.

The report defines ‘Purpose’ as something beyond the typical mission statement, beyond fulfilment of businesses’ commercial and operational goals. The real ‘purpose’ is characterised by an ambition to make a difference to the world we live in, by a sincere desire to make a positive impact on society and to offer a wider benefit to the community. Moreover, for businesses with a purpose, delivering shareholder value remains crucial but it becomes the means to a greater end – not the end in itself.

The majority of those interviewed in this study have all came to a consensus that employees today are seeking a greater and deeper fulfilment from their working lives, but that many organisations have yet to respond to this recent shift in attitude. Across the UK, US and Germany, an average of 52 per cent respondents ranked pay and benefits as most important, purpose was ranked as the next most important (18 per cent) ahead of work culture (17 per cent), responsibility (seven per cent) and opportunity for promotion (six per cent). Of particular interest was the fact that opportunity for promotion was ranked as least important by respondents in the US (26 per cent) and Germany (33 per cent). Only four per cent of UK respondents judged it as most important. Furthermore, the survey revealed that, on average, 57 per cent of respondents (64 per cent Germany, 58 per cent US, 48 per cent UK) said they would favour joining an organisation that has a clearly defined purpose. Finally, an average of 65 per cent of respondents claimed that purpose would motivate them to go the ‘extra mile’ in their jobs and 64 per cent claimed it would engender a greater sense of loyalty towards the organisation they work for. Helena Christopher from QBE Group commented: “Purpose provides context and rationale. It helps people understand why the company is pursuing a certain direction. If they understand why, then they are more likely to deliver on it. People will give more. For the average employee, delivering shareholder value does not seem that exciting, but delivering a purpose is.”

In response to the above findings, Brook Calverley, senior consultant at Calling Brands, explained that the importance placed on purpose is a significant discovery considering how little attention business leaders have given to it until now. Calverley explained that this research clearly demonstrates that purpose matters for organisations today and is increasingly becoming a critical factor in attracting and keeping talent, highlighting the fact that this is no longer an HR issue but a board issue. She commented: “Ultimately, people want to work for a good business; they are ready to believe that their employer has a positive role in society because this in turn reinforces positive self-image. What our report highlights is that now is the time for employers to have – and communicate – a strong sense of purpose. Those businesses that do will enjoy a huge commercial advantage over their competitors, driven by the superior performance of recruitment, retention and engagement of the best talent, and the attendant innovation and productivity this brings.”

In fact, another interesting fact that came out of this study that should be of particular interest for those organisations that face heightened risk of the expected flight of talent is the fact that the majority of those interviewed stressed the disruption caused by high churn or the departure of key personnel. They argued that not only is there the actual cost of finding, interviewing and hiring people; but what is even worse is that the business loses valuable time and resources to bring new hires up to a productive and useful standard; and then loses much of that intellectual equity when they move on. Hence, in such a scenario it becomes imperative that organisations do all they can to engage and keep their best talent. Here the report highlights the fact that those organisations that are able to hold on to their best talent, even if it is for just a little longer, gain a significant advantage from that retention.

The underlying message that this study wanted to portray to businesses out there is that organisations need to start to clearly define what they are really for, what good they do for the communities they work in and for the many stakeholders that support them. Another very important point that came out is that this is not an HR issue: it is a Board issue. This is mainly due to the fact that the benefits on offer go right to the heart of the businesses’ performance. What is more, purpose not only directs and improves recruitment and retention but also the culture of innovation and invention. It can help re-set the fundamental relationship between the employer and the employee and drive up the sense of trust and shared goals between them, which is now essential to winning performance. Getting it right, of course, requires consideration and investment. As Jacqueline Brassey, PHD, Ex-Unilever rightly puts it: “If you don’t have purpose, you will attract people who are only committed to you for the salary they get; you’ll never get the best performance out of those people. It is like a certain type of commitment and as soon as the money machine stops, that’s it. You won’t get extra effort from these employees.”

In addition to the above, the report explained that purpose is based on fundamental truths or convictions embedded in the organisation or within the leadership team. The report stresses the fact that the purpose needs to be believable by employees and external stakeholders alike. Even though an organisation might not necessarily overtly communicate their purpose to consumers, investors, partners, the supply chain and others will all be affected to some degree by the purposeful goals it claims. The really important work occurs after the business has resolved what its purpose actually means and starts to act and work on it. Without action, the report explains, this becomes another piece of corporate spin, more likely to further damage reputation, credibility and trust.

Finally, the profound benefit of purpose will only be realised once it’s seen to drive decisions within the organisation, when the business is shown to really believe it. Only then will employees be able to take their first steps towards a new relationship with their employer; a relationship that will considerably change their experience and satisfaction of their work and so transform and improve the performance of the organisation they work for. Today, people want to work for good businesses; they are ready to believe that their employer has a positive role in society. Now it is up to the employers themselves to start making the argument – and act on it.

Ms Camilleri is a researcher at the Foundation for Human Resources Development (FHRD)