March 2022 - Creating a Higher Purpose
If you want to survive the Great Resignation, invest in your company culture and generate a higher purpose for your employees as well as your business.
Millions of U.S. employees left their jobs last year in what has been dubbed “the Great Resignation,” and in 2022 it appears that we are not finished yet. Yet the question remains, are employees really leaving the workforce OR are they just seeking a better balance OR are they simply interested in working for a better company?
Many of the best places to work have a focus on Stakeholder engagement or even Social Impact that is built into their companies DNA. Companies that have a commitment to building an empowering company culture has helped them recruit and retain top talent even in the middle of the Great Resignation. By being creative and providing new and fun perks for their employees, it has allowed them to continue to be successful and even thrive during one of the toughest times in recent history.
In Larry Fink’s 2022 Letter to CEOs, he discusses how workers are demanding more from their employers and ultimately how business is changing. According to Fink, “At the foundation of capitalism is the process of constant reinvention – how companies must continually evolve as the world around them changes or risk being replaced by new competitors. The pandemic has turbocharged an evolution in the operating environment for virtually every company. It’s changing how people work and how consumers buy. It’s creating new businesses and destroying others. Most notably, it’s dramatically accelerating how technology is reshaping life and business. Innovative companies looking to adapt to this environment have easier access to capital to realize their visions than ever before. And the relationship between a company, its employees, and society is being redefined.”
Companies that prioritize relationships with their employees are working towards a more engaged and satisfied workforce (stakeholder outcome) with improved potential to outperform (shareholder outcome). Blackrock Inc, 2022.
In fact, research completed by BlackRock Inc, shows the impact of employee sentiment on firm performance. Based on the chart below you can easily see that returns of companies with the highest employee sentiment, produced greater returns between 2017 and 2021.
BlackRock analysis of employee sentiment as of December 2021. The chart shows cumulative absolute returns for
companies within the highest and lowest employee sentiment over the MSCI World universe (2017 – 2021).
Companies that are committed to building mutually beneficial customer, employee, and supply chain relationships may stand to benefit from better business results. Companies that show that they have a social or environmental impact are more likely to gain more customers as well as employees that are interested in working for a company whose values align with their own. The takeaway from this data: if you want to survive the Great Resignation, invest in your company culture and generate a higher purpose for your employees as well as your business.
Jonathan Liebert, CEO/Co-Founder
March 24th, 2022