Investments in People Sustainability Drive Positive Business Outcomes, Says New SAP Research

When we think about the future — of our organizations, our employees, and even our planet — sustainability is a word that immediately comes to mind. Success is no longer measured by profit alone.

It is defined by the impact an organization has on every part of its ecosystem: workers, supply chains, communities, and the environment. Yet less than one percent of organizations today are fully aligned to all 17 United Nations Sustainable Development Goals (UN SDGs).

We know that getting this right — or wrong — has real implications. As organizations increasingly shift their strategies toward a triple-bottom-line approach focused on profits, planet, and people, it’s this last pillar that is intrinsically part of the other two despite being historically overlooked. People make the decisions that impact our environment. People design and execute the strategies that drive results and profits. And people are ultimately responsible for how we shape the future of our planet.

Introducing People Sustainability

At SuccessConnect, we introduced a new term to guide organizations on their journey to create a future-ready workforce and a more equitable world: people sustainability.

People sustainability is the intersection of employee engagement, empowerment, and corporate responsibility. It is defined as treating people — within an organization’s workforce, across their supply chains, and in the communities in which they operate — ethically and fairly. Just as environmental and economic sustainability require careful preservation and use of natural and financial resources, people sustainability requires treating people and human potential as precious resources that must be supported and valued to drive resilience and agility — and the future we all wish to see.

At SAP, we define people sustainability through six core pillars. While there may be even more considerations when you think about the broader social sustainability umbrella, we determined that these are the most important pillars organizations can focus on right now to help people thrive:

• Diversity, Equity, & Inclusion (DE&I)
• Well-Being & Balance
• Trust & Transparency
• Health & Safety
• Empowerment & Growth
• Organizational Purpose

A Focus on People Sustainability Can Improve Overall ESG Metrics

New IDC research released today* and commissioned by SAP demonstrates that by focusing on the needs of the people in their workforce, supply chain, and communities, organizations can drive positive results for their organization and the environment.

In other words, invest in your people and the results will follow.

Despite criticism of the current state of environmental, social, and governance (ESG) investing, the growing social and economic pressures from investors, employees, and shareholders for organizations to show how they are addressing inequity and climate change while maintaining growth indicates that ESG is here to stay. In fact, a McKinsey report found that 83% of c-suite leaders and investment professionals expect that ESG programs will contribute more to shareholder value in five years than they do today.

A holistic people sustainability strategy can help organizations improve their ESG metrics across all three pillars of people, profit, and planet. Our research found that more than 86% of respondents believe that investment in people sustainability, as outlined above, can drive positive economic and environmental sustainability outcomes.

Furthermore, people sustainability pioneers, or those with the most mature people sustainability strategies, are two times more likely than followers, those with the least mature people sustainability approaches, to include people metrics in their ESG reporting. This suggests that the pioneers see the value in demonstrating their commitment to inclusion, engagement, and well-being as an integral driver of their overall ESG success.

The results speak for themselves: our research found that employees of people sustainability pioneers reported higher employee job satisfaction and productivity, are less likely to leave their jobs, and are more enabled to achieve their career goals.

Developing a Holistic People Sustainability Strategy

We’ve established why people sustainability is important, but how can leaders successfully incorporate it into their organization? It requires substantial behavioral change combined with employee engagement and the right technology. According to our research, more than three quarters of respondents at all levels — executives, managers, directors, and frontline employees — believe that behavior change is necessary at all levels of the organization.

Part of this change is approaching people sustainability holistically. The six pillars we’ve identified already exist; however, they exist in silos, operated by different teams and measured with separate goals. Our research demonstrated a notable difference between pioneers and followers in how they approach this challenge: 80% of pioneers believe that addressing people sustainability with a single, unified strategy is more valuable compared to only 61% of followers.

One manufacturing employee surveyed as part of our qualitative interviews put it best: “It’s not even a question anymore. You can’t do social sustainability in isolation. You can be the best company in the world, but if your supply chain is not on board, then it doesn’t mean anything.”

While this won’t happen overnight, a unified approach will produce the rewards organizations need to build the resilient, results-driven, and people-first culture needed to meet business demands. A unified approach to people sustainability will have a positive impact on critical business KPIs, according to the research, including financial performance (71% of respondents agree), employee job satisfaction (78%), employee engagement (76%), and brand reputation (75%).

People Sustainability Helps to Change Work for Good

A sustainable workforce drives a sustainable business. At SuccessConnect, we introduced new capabilities within the SAP SuccessFactors Human Experience Management Suite that can transform how organizations can manage their talent. Collectively, these innovations use data and artificial intelligence (AI) to understand every individual’s whole self — their skills, interests, aspirations and much more, even as they change over time — and then use that to match them with opportunities over the course of their career.

When we think of the challenges organizations face today — the skills gap, hiring challenges, and a rapid pace of change — the ability for people to move and grow within an organization is how we will successfully build diverse teams, drive growth and learning, foster belonging, and increase organizational agility.

This is why a unified people sustainability strategy is paramount to the future of work. You cannot make progress on DE&I without trust and transparency. Empowerment and growth are limited without clarity on organizational purpose. Bringing it all together is what creates a resilient, results-driven, and people-first organization — one that’s not only equipped to meet the business needs of today, but one that can learn, grow, and adapt to meet the business needs of tomorrow.

Read the “Investments in People Sustainability Drive Positive Business Outcomes” IDC Document # US49724322 and join the People Sustainability Research webinar with IDC on October 27, 2022.

*From May through August of 2022, IDC conducted qualitative and quantitative studies of employees and business leaders across multiple countries and industries; two focus groups in the U.S., 16 in-depth interviews with executives across three regions, and a survey of more than 3,500 employees and business leaders in 11 countries across NA, EMEA, APAC, and Latin America.