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Ep 421: The Purpose Gap

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As we all know, recruiting and retention are tough at the moment, and employers need to work harder than ever to acquire and keep the talent they need. Purpose is often talked about as a critical differentiator in employer branding, but what does that actually mean in practical terms?

New research from Cognizant has revealed just how important purpose is at work and has also highlighted a growing disconnect between employers and younger workers.

So what does purpose mean for Gen Z employees, and what should employers be doing to close the purpose gap. I’m joined this week by Eduardo Plastino, Director of The Cognizant Center for the Future of Work, to talk through the research and explore its implications.

In the interview, we discuss:

• Defining the purpose gap

• The increasing leverage of employees

• Understanding what is important to the Gen Z workforce

• Scepticism around employers’ messaging on critical issues such as climate change and DE&I

• Shared values

• Implications for employers

• How to fix the purpose gap

• Aligning external employer brand communication with internal reality

• Advice to talent acquisition teams on how brand, marketing and recruiting process can demonstrate an employer is a great place to work.

Listen to this podcast in Apple Podcasts.

Interview transcript:

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Matt Alder (48s):
Before we start the show, a quick announcement to say that my latest book, Digital Talent, is now available to order or pre-order wherever you get your books. In a disrupted and technology-enabled world of work, a company’s ability to attract, recruit, and retain people with digital skills can be the difference between business success and business failure. I’ve co-authored again with Mervyn Dinnen and in the book, we explore how employers can find, recruit, retain, and develop the people they need in a time of intense digital transformation. The books are out now in the UK, and will be published in the US and around the world on March the 29th.

Matt Alder (1m 50s):
Hi there. This is Matt Alder. Welcome to episode 421 of the Recruiting Future Podcast. As we all know, recruiting and retention are tough at the moment and employers need to work harder than ever to acquire and keep the talent they need. The purpose is often talked about as a critical differentiator in employer branding, but what does that actually mean in practical terms? New research from Cognizant has revealed just how important purpose is at work and has also highlighted a growing disconnect between employers and younger workers.

Matt Alder (2m 30s):
What does purpose mean for Gen Z employees and what should employers be doing to close the purpose gap? I’m joined this week by Eduardo Plastino, Director of The Cognizant Center for the Future of Work, to talk through the research and explore its implications. Hi, Eduardo, and welcome to the podcast.

Eduardo Plastino (2m 51s):
Hi, Matt. Thanks for having me here.

Matt Alder (2m 53s):
An absolute pleasure to have you on the show. Could you just introduce yourself and tell everyone what you do?

Eduardo Plastino (2m 58s):
Of course. My name is Eduardo Plastino and I am the director at Cognizant Research, which is, I guess, the company’s internal think tank. We think strategically about what’s coming in the business and technology world.

Matt Alder (3m 16s):
Fantastic stuff. Just for people who might not be aware, tell us a little bit about Cognizant and what the company does.

Eduardo Plastino (3m 22s):
Cognizant is an IT services and consultancy company. It’s a multinational company present pretty much around the world.

Matt Alder (3m 30s):
Fantastic. Now, you have just researched and published a very interesting report called The Purpose Gap. Can you tell us about the research, what it’s about, why you did it, and how it was put together?

Eduardo Plastino (3m 44s):
Sure. The Purpose Gap was a project that was developed across 14 European countries but to be honest, I think, it applies pretty much everywhere, surely in advanced economies. We interviewed 500 young workers between the ages of 20 and 40. We wanted to understand what purpose means for them and what impacted us in their lives and their work lives and, of course, the consequences of those two companies. I think one important thing to add is right now, because, obviously, purpose, as a theme, has been a big topic for businesses for, already, a good number of years, but we believe it is really important to have a new look at it now for making it to reasons that are not unrelated.

Eduardo Plastino (4m 43s):
One is, of course, just the sheer amount of people who are reassessing their life choices and, in particular, their career choices in the light of the pandemic. That’s one area. Then related to that, of course, is the great resignation that is adding pressure and companies. Just this week, the Office for National Statistics here in the UK published a really impressive figure that there are 1.3 million unfilled positions in the British economy, so think about that. When you look at that figure, how many businesses are struggling with this, it actually becomes a key business topic of our days.

Matt Alder (5m 27s):
Absolutely. I think that that’s really interesting because, in some ways, purpose has been thrown around as a term so much, it’s lost a lot of its meaning in the conversations that we have. Really interested in this piece of research and yes, really interested in terms of what you found out and how it resonates with that younger generation who are in the workforce or coming into the workforce. Talk us through some of the key findings or the things that the research uncovered.

Eduardo Plastino (5m 57s):
Sure. There are a number of areas. I think that the first they have to do perhaps is to define what we mean by purpose gap, right? The Purpose Gap, the way we see it, is the difference between what young workers say is important for them when they’re looking for an employer, in terms of areas such as diversity inclusion, social impact, poverty relief, the environment, and all those areas, and then how they perceive their companies are doing in those areas, how much their companies are actually committed to those areas. We ask our interviewees involved two questions – what’s important to them, what’s really important for you in those areas, and how’s your employer doing?

Eduardo Plastino (6m 46s):
There’s a gap. That’s, I guess, true to the extent expected, but what we really think is perhaps more serious for businesses is that this gap is actually increasing. If you look at millennial workers, those are people between the ages of 27 and 40, we get this high points so that’s what we found. Okay, so 80% say those areas are especially responsible business practices when we are small. 75% say they’re happy with what their companies are doing. Not necessarily extremely happy, but happy.

Eduardo Plastino (7m 27s):
When we actually lower the age range, if you were asking the Gen Z workers, that’s people between the ages of 20 and 26, there’s a 12 point gap. That’s, I guess, a red flag for businesses. The way we see it, this isn’t just because they are younger and perhaps more enthusiastic or idealistic. It’s because if you look at what happened in the last few years, in the last decade or so, and compared with what happened when their predecessors were growing up and really joining the job market, a lot has changed, right?

Eduardo Plastino (8m 9s):
First of all, I think it’s important to understand that many millennials are always a wide group, all of them, but many of them actually joined the job market around the time of the global financial crisis. That actually leads them to be more conservative in the way they see business and, perhaps, slightly more focused on their narrower objectives. For Gen Z workers, for people who are beginning their careers now, about to begin, or entering the job market, that’s different, especially again, in the countries, as a whole, we’ll go through these see saw in the job markets during the pandemic.

Eduardo Plastino (8m 56s):
What we see now, and we’re actually seeing it slightly before the pandemic, even more now, is that we have all those unfilled positions and the leverage of workers has increased a lot. They actually perceive that they are able to actually do in the market on their own terms. That’s one area. Then the other area is we believe that these are people who came to age in a different social environment. These are people who actually, again, live their adolescence or early adulthood in the world of me too, black lives matter, of explosion in interest and concern about climate change, inequality, and so on.

Eduardo Plastino (9m 40s):
We believe this is here to stay. This concern they have about those issues is that it’s here to stay so that’s an important area. Then how they see the purpose is also different from what people expected, how they the workers in general. Maybe we can go there later.

Matt Alder (10m 1s):
Yes, that’s really interesting. I want to dig into that in a second. I suppose, before we do, a lot of the things that you talked about as being part of that, things that companies say they’re doing or companies will talk about that a lot. Are they being believed? Is the Gen Z or everyone a call them, what’s their level of skepticism about what their employers are saying?

Eduardo Plastino (10m 23s):
Yes, there is a degree of trust in employers, but not too much. It really depends on the area. For example, when you look at what people say that their employees are doing in terms of climate change, they vary really more skepticism. For example, we found this only 24% of young workers believe that their employers’ commitment to climate change, to addressing climate change is very genuine. Now, a lot of people watching think, “Well, there’s some things.” They think they are, in a way, half-hearted in their commitments, but not necessarily extremely committed.

Eduardo Plastino (11m 7s):
It depends on the area. Again, I think most people are somewhat happy, but not very happy with what the companies are doing. Again, this is a problem for businesses. You wouldn’t be up from under any circumstances I think, but especially when they’re facing issues of attraction, retention, and so on, they, of course, want their people to be engaged with the companies and happy with the direction.

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Matt Alder (12m 5s):
I suppose, coming back to that point about defining what purpose means, what came back from the research as being important?

Eduardo Plastino (12m 14s):
I think that this is against one of the most important findings is that the way people define purpose is actually different when they look at the business as a whole and when they look at themselves. It’s absolutely true that people want to work for businesses that are active on the environmental front, on social issues, that promote diversity and inclusion, and so on. This is true. It was 65% of people, of young workers want to work for a company that shares their values in those areas and act in a way that reflects those values.

Eduardo Plastino (12m 58s):
I guess that’s not necessarily a surprise, but it’s a confirmation of something that has been wiping us. Perhaps, slightly more surprising for some people will be, at a personal level, young workers to find purpose in terms of issues and areas that have a more direct impact on their own lives. That includes, for example, passion for what they do and a healthy work-life balance. For example, overall we, in the 14 countries where we have people 59% are fine having a passion for what you do as one of the top areas in how they define purpose.

Eduardo Plastino (13m 42s):
In the UK, in Ireland, actually even slightly higher, 62%. Again, this doesn’t necessarily mean having an amazing, life-changing project. It can be something as simple as really feeling of ownership about your part of work, or really understanding, or having a more holistic view of the business. This is also purpose and that’s actually a very important part of the purpose for many workers. This is an area where we fear that many businesses really fall short, at least, in their understanding of what young workers want.

Matt Alder (14m 24s):
I suppose that brings me nicely onto my next question, which reflects back to something that you’ve already touched on. What are the implications for employers of this? What are the dangers, what are the issues that employers are facing?

Eduardo Plastino (14m 37s):
There are three major problems for employers. One is really a lack of understanding of how people define purpose. They need a more nuanced view. It’s not just about being inclusive. Those things are very important. Not saying they are not, they are important, but it’s also about allowing people to fulfill their own desires, their own career ambitions, and then having a healthy work-life balance. That’s number one. Number two is what we have already mentioned, the skepticism or the degree of skepticism among young workers in terms of whether their company is actually comitted to their statement positions in those big themes social impact, and so on.

Eduardo Plastino (15m 32s):
Then the third area, and this is probably the most serious of all four businesses, is that a lot of people are struggling to live their purpose in their day-to-day work life. This was really shocking. What we found was that only 18% of interviewees said they are living their purpose in their day-to-day work life. I think in all of that, if you’re managing a business and you’re thinking long-term, you cannot really expect many people to stay in your company for a long time, especially at times job markets if they are this unhappy with other job is stripping them.

Eduardo Plastino (16m 16s):
Then that has a number of consequences, long term. Of course, in the short term, it means more nutrition, more time and money spent on hiring and training, and so on, but long-term actually means you’re deprived of a strong talent pipeline to build the next generation of your leadership.

Matt Alder (16m 34s):
I know that in the report, you go into some detail about what employers can do to address The Purpose Gap and how it helps fake some of these issues. Can you just give us a top-line summary of some of the most important things that employers need to be doing or thinking about to solve what is obviously a very big issue?

Eduardo Plastino (16m 55s):
Yes, of course. I’ve been over there three major areas in which companies can and should work. One of them is really the area of internal communications. There’s a lot that can be done to improve it in many businesses. I actually found a couple of very nice examples of what companies are doing there. Then there is an approach to young workers that really has to be focused on empowering them. That doesn’t mean actually just leaving them completely alone to do whatever they want. Actually, it means giving them guidance because many people say they need guidance.

Eduardo Plastino (17m 36s):
They just want to be left to do whatever they’re told to do without someone helping them, but definitely, it does not mean micro-managing them. That’s number two. Number three, we have to look at the practices that are adopted by the current leadership. In many circumstances, those have to be modernized. Now, of course, each of those areas is quite comprehensive. Again, I’m happy to discuss.

Matt Alder (18m 3s):
Absolutely. I think as a final question, as part of that, obviously, lots of people listening are in position and trying to attract this next generation of people into their organization. What would your advice be in terms of the way that companies present themselves with their employer brand, their recruitment marketing, and indeed, their recruiting process to really illustrate that they understand these issues and would be a great place to work?

Eduardo Plastino (18m 34s):
Well, I think many companies actually do what, perhaps, is a good enough job in terms of presenting their brands externally. Perhaps, the big area in which many have to work is to make sure that that image is aligned with the perception of people who are already working for them because what they have to bear in mind is that we have been in a complete network and integrated work today so people know. You have websites let store, which allows people to not just tell their sellers, but also even give open opinions to the world about how it is to work what they work.

Eduardo Plastino (19m 16s):
It isn’t very helpful for businesses to project one image externally if, internally, there’s a lack of coherence with how people perceive them. I think that’d be the best possible advice, making sure that you absolutely do internally in areas that reflect the image you’re projecting.

Matt Alder (19m 39s):
Lastly, where can people find the report if they want to read things in more depth?

Eduardo Plastino (19m 45s):
It’s available on the Cognizant website and you can obviously Google Cognizant Purpose Gap reports and you’ll find it.

Matt Alder (19m 54s):
Eduardo, thank you very much for talking to me.

Eduardo Plastino (19m 58s):
Pleasure. Thank you.

Matt Alder (19m 58s):
My thanks to Eduardo. You can subscribe to this podcast in Apple Podcasts, on Spotify, or via your podcasting app of choice. Please also follow the show on Instagram. You can find us by searching for Recruiting Future. You can search all the past episodes at recruitingfuture.com. On that site, you can also subscribe to the mailing list to get the inside track about everything that’s coming up on the show. Thanks so much for listening. I’ll be back next time and I hope you’ll join me.

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