Workforce in Sustainability

Workforce in Sustainability

Making sure that the workforce is healthy and well and optimally supported to contribute to the organisation goals in line with applicable (employment) laws is a longstanding task of the HR function. The alignment of the Employee Experience to the Business strategy is essential to make sustainability stick – making sure that what is done on the inside corresponds with what is said outside and vice versa. 

Workforce sustainability is obviously relevant through the lens of productivity, via talent attraction, deployment in health and well-being and retention, it is less often obvious through the lens of brand, reputation and supply chain perspective. The impact on people in a broader sense, either disclosure via so called S topics or by active development of inclusive products, processes and ‘new’ markets is an unknown space, which sustainable business development may uncover. 

 

The immediate effect of a lack of people sustainability mostly affects organisation performance and profitability via vacancies that remain open, high turnover, court-cases, repair payments and long-term absence and illness. 

Supporting the workforce in the sustainability journey of an organisation is important by offering a sustainable workplace, the contribution to the E in ESG (E1 in CSRD) by sustainable working conditions and preparing your workforce for the business model transformation. 

The essence of workforce sustainability is however respecting and improving their human rights, and captured in employment laws, ESRS S1 in CSRD and CSDDD.

PwC's support

Employers and HR professionals are supported by PwC in socially sustainable workforce strategy; by data, systems & insights, by policy creation and people experience design in a variety of topics. 

Sustainable workforce strategy

An organisation's need for a socially sustainable workforce strategy can arise through different triggers. 

  • Sourcing needs: Developing a people value proposition to support a sustainable people and business strategy that is greener, more caring and/or more equal to attract and retain the right candidates. 

  • Legal obligations: Responding to EU Pay Transparency and CSRD requiring policies, action plans, targets and metrics in for example Fair Reward practices (as Equal pay or Adequate wages) or the upcoming CSDDD.  

Workforce sustainability

Step by step, your way to Workforce Sustainability are:

  • Ensure your HR strategy aligns with your organisation view on sustainability and/or your Double materiality assessment. What is important in relation to Workforce?   
  • Translate this vision on sustainability explicitly in your internal and external message, for example; 
    • (How) Are you an employer where people are (psychologically, mentally and physically) safe and healthy? How are you measuring and tracking this? 
    • (How) Are you an inclusive and an equal opportunity employer? Are you ensuring the right training and development on awareness, and Sustainability in general? 
    • (How) Are you holding your board accountable for your sustainability efforts? 
  • Embed your strategy in your workforce experience; the way your internal practice, processes, policies, and actions come to life in Moments that Matter. This can range from preventing burn-outs and celebrating recovery, from closing the equal pay or adequate wage gap, to proudly communicating reaching near zero emission on the Lease fleet.
  • Review your current excellence in workforce sustainability topics (whether it is Health or Inclusion or Equal pay) and transpose your learnings of excellence in these topics into your other topics.
  • Select your must win topics, track your progress, actions and revisit your targets ... and ensure they are proudly communicated (and maybe reported). 

 

Employee Wellbeing

An important aspect of Workforce sustainability is “employee wellbeing”. Apart from employers having a social responsibility to take care of its employees, it also benefits them directly as healthy and engaged employees are more productive. 

Taking care of an employee's wellbeing covers elements like prevention of accidents happening, ensuring a psychological safe environment, facilitating a healthy work life balance, an inclusive working environment, but also providing sufficient income, smooth internal working processes and inspiring leadership. The interventions taken to influence these elements have a direct impact on key HR KPIs like retention, sickness and burn out rates making it important for organisation to address wellbeing.

Employee engagement is an important metric to keep track of the wellbeing level as it summarises the status of the different wellbeing drivers and therefore is an early warning indicator that can flag upcoming changes in sickness and retention levels. 

So, in all respects, it is worth investing seriously in the wellbeing of your people. And many organisations do so. But how do you know what works for you? PwC’s wellbeing approach provides transparency and structure to provide you with data driven insights and results. Read more on wellbeing

Diversity, Equity and Inclusion (DE&I)

Companies need a workforce that is inclusive to the diverse talents and backgrounds to succeed in an increasingly complex and heterogeneous world. Achieving this workplace inclusion that can let diversity flourish and can unlock its potential involves a whole set of practical challenges. Equity is the basic precondition needed for Inclusion and therewith Diversity to flourish.

First it is important to establish and maintain a fair, equitable and welcoming environment for all people, a culture of belonging is required: a shift from awareness to empathy and demonstrating inclusive leadership. 

Second it is essential to follow-up on this vision and ensuring the employee experience is inclusive, fair and robust from application to exit.

  • Understand inclusion and possible gaps in your organisation
  • Attracting more diverse talent to their organisation.
  • Retaining & developing diverse talent.
  • Identifying and mitigating systemic bias (for example gender bias or sexual discrimination) in policies and practices.
  • Measuring and applying fair reward practices.
  • Deep insights through quantitative and qualitative observations and recommendations. Based on analysis your organisation knows the effectiveness of the existing interventions with regard to I&D.
  • Impact of the interventions, a.o. communication around the interventions, feedback and experiences, differences across gender, age and education.   

 

Read more on DE&I and Inclusion Insights

Sustainability & performance management

Organisations are placing increased emphasis on ESG factors due to increased stakeholder pressure, tightening regulations and the intrinsic motivation to embrace ESG topics. As a result, ESG-related performance measures in executive and broader workforce remuneration are on the rise.

Having proper ESG-related performance measures stimulates behaviour that is beneficial to the broader sustainability strategy and/or the socially sustainable workforce strategy. Having the right performance measures gives the right signal to both the internal and external organisation that ESG is a priority. 

It is important to carefully think about what ESG-related performance measures will be adopted. Some factors must be considered when selecting ESG performance indicators.

  1. It is crucial to secure internal stakeholder alignment to get the best out of the performance management framework. Equally critical is the external alignment with for example stakeholders and investors.
  2. ESG performance indicators should be truly relevant to the company to create an impact. It should align with the company's overall strategy and its sustainability strategy. 
  3. As with financial metrics, ESG performance indicators should be data-driven with clear, measurable targets.
  4. The ESG performance measures should have sufficient weighting and should be sufficiently and not too challenging to have impact where there is no one-size fits all approach. 
  5. Internal and possibly external disclosure of measures and achievements is an important but delicate matter and, if done correctly, can add to achieving the company's sustainability goals. It is a manner for the company to convey their commitment to ESG matters.
  6. The scope of whose remuneration is affected by ESG performance measures must be determined: C-suite only or broader workforce. Applying it to broader workforce, resulting in a collective effort, may have a positive effect on achieving the ESG goals.

E-related ESG performance measures can contribute the company's socially sustainable workforce strategy if well designed, implemented, measured and audited.

Read more on Sustainability and Executive Remuneration in our survey.

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Contact us

Bas van de Pas

Bas van de Pas

Partner, PwC Netherlands

Tel: +31 (0)62 263 83 99

Sander Schouten

Sander Schouten

Director, PwC Netherlands

Tel: +31 (0)65 342 05 42

Nicolien Borggreve

Nicolien Borggreve

Partner, PwC Netherlands

Tel: +31 (0)62 081 66 41

Lisette  de Zwart

Lisette de Zwart

Senior Manager , PwC Netherlands

Tel: +31 (0)61 09729 35

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