Some 42% of UK employees don’t know what their organisation’s purpose is – even though 86% say that their employer has issued some form of ‘purpose statement.’ Those are the main findings of a new poll of more than 2,000 staff, including 500 at C-suite level, from EY's leadership, skills and talent arm Lane4.
Lane4 says an ‘authenticity gap’ – a disconnect between what organisations say they stand for and what staff experience on the ground – is at the heart of that disparity. Indeed, 71% of employees believe that their leaders still always or often make critical decisions based solely on financial considerations, such as profit, costs and growth.
And yet organisations would do well to up their game on the purpose front; the research also shows that 37% of respondents would take a 20% pay cut to work for an organisation with more positive social and environmental impacts – a figure that rises to almost half (44%) among Gen-Z staff. Meanwhile, 74% of Gen-Z respondents would likely quit their current role if they found a job at an organisation with a more meaningful purpose.
In Lane4’s assessment, the research raises questions about just how genuine some purpose statements are and how well the initiatives they are designed to drive are embedded in employers’ everyday operations.
At the same time, the findings serve to remind business leaders of the growing importance that employees place on authenticity of purpose: more than half (55%) of the respondents agreed that leaders will need to become more purpose-led in future and give equal consideration to people, planet and profit in their decision-making.
Interestingly, the research showed that senior leaders were more likely to be influenced or excited by purpose than their junior colleagues. Half of the business owners surveyed said their organisation’s purpose has a “great impact” on their day-to-day role – compared to 26% of those in middle management roles and 24% in entry-level positions. And 86% of C-suite and director-level respondents said they felt energised by what their company does, compared to just 60% of entry-level staff.
Failure to resonate
EY Lane4 Managing Partner Adrian Moorhouse says that a disconnect between an organisation’s purpose and its employees’ lived experience is quite stark for some of the companies surveyed – posing a risk amid a competitive talent market, where employees “may decide to vote with their feet”.
Moorhouse says: “Employers know that the workforce of today and tomorrow values purpose highly, but the research suggests that some of these initiatives just aren’t resonating with their people due to a breakdown in either communication or authenticity.
“Purpose is a service statement, not a marketing badge, so it should both be articulated and reflected by a tangible shift in how business operates,” Moorhouse adds. “For purpose to be truly effective, it needs to be seen as a guiding star, underpinning key business decisions, and widely understood at every level of the firm – not just at a leadership level.”
Commenting on the findings, ICAEW Director of Corporate Governance and Stewardship Peter van Veen says a well-articulated purpose statement can provide a focal point for a company’s stakeholders, in terms of communicating to the outside world what you’re doing, and what you’re about. “It establishes clarity and a useful platform for senior execs, including in finance, to frame the business’s plans and activities, and convey a sense of what it’s trying to achieve.”
“There’s so much evidence to suggest that employees – especially younger ones, who tend to be more mobile in any case – are increasingly less content to stay in jobs out of loyalty. So, in the interests of attracting talent, a purpose statement can be a useful tool for maintaining a dialogue with staff about why they should join or remain with the business,” van Veen adds.
However, Van Veen warns that some organisations will take a lazy, cookie-cutter approach to drafting purpose statements that simply string together a series of bland buzzwords that aren’t going to offend anyone, or get shareholders spooked. “A lack of authenticity is something that employees will be able to spot very easily, and can lead them to look elsewhere – and in that sense, accountants are no different to any other staff.”
“The challenge for the finance function is to apply a critical eye to the organisation’s statement and quantify its impacts,” Van Veen adds. That’s about asking, what does it mean in practical terms? How does it influence and shape our business plan or strategy? Does it require us to change what we’re doing? And what does it mean for the bottom line? “Those are the areas where accountants can add some real rigour.”
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