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purpose for recruitment

Human Resources

Tapping into the power of purpose for recruitment

Published 19 September 2022 in Human Resources • 7 min read

Despite growing concerns about the global economy, CHROs can expect fierce competition for top talent to remain the norm. Purpose could be the key to attracting the employees your business needs to succeed.

It is a challenging time to be a CHRO. As concerns about the economy grow, many businesses find themselves facing a moment of real uncertainty. Could a period defined by pressure on hiring and competition for talent suddenly flip and become an era of lay-offs and cuts?

On the one hand, many economies still have lively growth rates and highly competitive labor markets. US employers added more than half a million people to their payrolls in July 2022, taking unemployment back to pre-pandemic lows of 3.5%. Similarly, most EU countries’ employment rates are equal to or above pre-pandemic levels.

On the other hand, there are growing concerns about the impact of supply chain disruption, soaring inflation, and geopolitical instability. Many economies are expected to slow or tilt into recession this year or next. Could CHROs find themselves spending less time on hiring drives than lay-offs? Cuts are increasingly reported among many major US firms, including Microsoft, Oracle, and JP Morgan Chase. In Europe, meanwhile, Sweden-based consumer credit firm Klarna recently received critical headlines when it cut more than 10% of its global staff.

Another possibility is that we will see both economic downturn and continued high employment. Some commentators hypothesize a “job-full recession” could be possible—the opposite of the “job-less recovery” that followed the 2008 crash.

Regardless of how things play out at a macroeconomic level, many CHROs know that they will likely continue to face stiff competition for talent. Some key skills will remain in demand, such as those related to digital transformation: business surveys regularly highlight shortages in areas such as artificial intelligence and data analytics. When talent has a choice about where to work, CHROs know their organizations will have to maximize their appeal to potential candidates.

But how can they do so? Many organizations have become locked in a vicious cycle focused on money, competing on wages, generous benefits, and joining-on bonuses. Yet this transactional approach risks overlooking other powerful motivators, such as purpose. Putting purpose at the core of hiring efforts has the potential to transform how organizations hire and improve their success in recruiting the talent they need.

Hiring
“Putting purpose at the core of hiring efforts has the potential to transform how organizations hire and improve their success in recruiting the talent they need.”

Understanding purpose

What is purpose? At its heart, it’s simple: it’s your business’s reason for existing, and in a broader way where and how value is created. Purpose is often thought of in connection with strategy and culture, and the three are related but distinct. Strategy is where you decide to play and how you intend to play to win as you work towards your purpose, while culture is about the workplace behaviors adopted along the way—it’s “the way we do things around here.” Strategies come and go, and cultures evolve, but purpose can be consistent for decades.

It’s increasingly common for corporations to declare a purpose, and this has significant implications for how CHROs attract and hire talent. The below three areas stand out.

 

1. Meet expectations on transparency

First, if a company makes claims about its purpose, prospective candidates want evidence to back it up. Candidates increasingly demand transparency from companies about the authenticity of their purpose and, more broadly, what it’s like to work for a company.

Some firms have found candidates asking to see engagement survey results to check whether existing employees agree that the company’s purpose is real, while some even ask to see feedback or references about the hiring manager to understand what the company would be like to work for. Candidates are increasingly less likely to accept a company’s claims about its purpose and culture at face value.

Progressive companies are getting ahead of this trend by providing relevant information, whether on website recruitment pages or by sending it directly to candidates, even if it has not been requested. That indicates an intention to be transparent, and it should be allied with honesty about where there is work still to be done.

One benefit for companies is that a discussion about purpose can help move the hiring conversation away from just money, as, if the conversation is only about money, companies may not be making good decisions about which candidates align with their purpose and values. Further, purpose-driven companies may be able to compete better on purpose than on cash. A strong social purpose can be a major appeal to candidates, even when a company is struggling financially.

 

2. Hire for purpose

CHROs need to help their organization learn to hire for purpose—something too many companies fall short on. When people who have a poor fit with the company’s purpose and culture are brought in, it can be hugely damaging.

Some techniques are relatively simple adjustments to standard recruitment practices, but CHROs may need to coach and support hiring managers to prioritize alignment with purpose. For example, guidance on how to talk about purpose in job ads or role descriptions and explore purpose in interviews may be useful. Discussing purpose in interviews sends a powerful signal to candidates about the company’s priorities that may help attract some candidates while filtering out those who may be a poor fit.

But just talking about purpose is not enough—hiring managers must ask questions that yield relevant insights on candidates. In general, interviewers should avoid questions about hypothetical scenarios, as such questions allow candidates to paint themselves in the best possible light based on what they think the interviewer wants to hear. In effect, candidates can “purpose wash” themselves.

Instead, interviewers should ask for real situations where the candidate has put purpose-driven outcomes first, perhaps at the expense of short-term financial returns. It is the classic “STAR” approach: seek detail on the situation, the task at hand, the action taken, and the result. Candidates may resist such questions, saying they have not encountered such a dilemma or that if they have, it was trivial. Interviewers should insist on examples. Give candidates several minutes, if need be, to think of an answer, rather than just moving on to the next question. Even if the situation described is relatively trivial, interviewers can learn much about a candidate’s values from hearing about their reasoning in a specific situation.

“Interviewers should ask for real situations where the candidate has put purpose-driven outcomes first, perhaps at the expense of short-term financial returns.”

3. Join the dots—from corporate to personal purpose

Companies must find ways of building connections between their corporate purpose and individual employees’ sense of purpose in their own lives and careers. In the post-pandemic world, where employees are rethinking the role of work in their lives and seeking alignment with their personal priorities, creating those connections is increasingly important.

One company leading the way on this is Anglo-Dutch FMCG conglomerate Unilever—a firm that has become synonymous with purpose in business. The business defines its corporate purpose simply as being “to make sustainable living commonplace,” and it has committed that every one of its 400-plus brands will be a brand with purpose. For example, personal care brand Dove aims to encourage all women and girls to develop a positive relationship with beauty to boost their self-esteem and help them fulfill their potential.

Yet, while Unilever has a clear view of its corporate purpose, it also encourages employees to think about their personal purpose, delivering its “Discover your Purpose” workshop to more than 55,000 employees. Unilever does not expect employees’ personal purpose to be identical to its corporate purpose (although it is helpful if the two resonate, or employees may find it better to move on). Unilever’s activities regarding purpose have significantly benefitted employee engagement and wellbeing.

Purpose is a powerful tool for attracting talent. If a candidate is weighing two potential job offers and other factors are equal, a strong purpose can offer a substantial advantage.

When companies genuinely and authentically adopt purpose, it affects their strategy, culture, and day-to-day decisions in the organization’s running. But it also has major implications for HR and hiring talent.

CHROs’ to-do lists could look very different in the next 12 months compared with the past year, but competition for talent is likely to remain intense, particularly for key skills. CHROs will need every tool at their disposal to succeed. There are few more powerful than purpose.

Authors

Lars Häggström

Lars Häggström

Senior Adviser, IMD Business School

Lars Häggström is a CBS Executive faculty member and an Executive in Residence at IMD, while at the same time heading up Enable Performance, a consulting company focusing on driving large-scale change in global organizations.

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