Right now, I fear that D&I is often being left to sit quietly in HR – without, crucially, being embedded  into companies’ wider strategy.

But leaders need to know that not addressing D&I will create a leakage of good talent, reduced flow of innovation and barrier to harnessing the brilliant people that can make a business grow.

The ROI of any business does depend on its people – and if people are excluded or worse, demonised, a business cannot flourish.

One illustration of this is a story once told to me by a British Muslim Asian man who was a high flyer through education before joining one of the big four consultancy firms as part of its graduate training scheme.

So far, so good. He’s got the qualifications and personal skills, he’s landed the role with a blue chip company and, as far as he understands it, all he has to do is work hard.

However, he soon found that he unknowable, opaque, parts of his company’s culture would ultimately stymie his progress. In his case, an out-of-hours drinking culture that created the kind of conversations with, and proximity to, leaders that ultimately oiled the wheels of promotion.

He wasn’t opposed to others’ drinking but didn’t feel comfortable participating in it. But he found that even holding a non-alcoholic glass of something in his hand, he started to be pushed out of the loop and experienced negative comments upon about his faith.

And ultimately, although the man had the same experience, qualifications and work ethic as colleagues, he realised he wasn’t getting promoted at the same rate – and left the organisation.

His potential as part of the emerging generation of young talent was lost.

The opposite of an inclusive culture, we need to remember, is an exclusive culture where only a certain type of person will be welcomed.

What this does to a business is reduce its access to ideas and creativity that can fuel growth and productivity.

Whether it’s the Asian man, a disabled employee or a working mother, you get the picture.

But I’ve been working in this area since the 1980s and experience has taught me that just as the economy works to familiar cycles, so, too, does HR.

In this world though it’s not about boom and bust, rather the narrative that can play out during times of economic crisis is ‘hire, hire, hire’ followed by ‘fire, fire, fire’.

And it’s time to rewrite it. We must abandon so much of our traditional thinking and find new ways to successfully negotiate the increasingly complex – and combustible – world we live in.

Let’s start with the very first building block: don’t believe everything you’re told.

Over the past couple of years, the HR industry has galvanised around a familiar theme: the war on talent. And it’s true of course that the market has experienced some extraordinary pressures.

Combine Brexit with the effects of the pandemic – everything from empty posts created by laying off workers to people taking early retirement – and it created a vacuum that needed to be filled.

But at times, as I’ve looked at the headline vacancies being quoted in the press, creating anxiety in HR departments up and down the land, and wondered if I was living in a parallel universe.

Where exactly did these figures come from? How many of these vacancies were actually real? And how many have disappeared now we’re experiencing a downturn?

If the Queen’s funeral is anything to go by, then we must question the statistics.

Within days of the event, it was being quoted that four billion had watched her funeral worldwide. The number was repeated across so many news outlets it became fact.

Then it emerged that this figure was quoted by one analyst at one website who used it for the expected number of viewers – not even those who did actually watch – and didn’t extrapolate how they’d come up with it. Their prediction was taken as read.

All of us working in the field of HR must take care not to buy into the headlines, be accountable for our part in behavioural cycles. HR – like so many industries – is subject to the whims of the headlines. And as we rush to respond to them, we risk creating a ripple effect that morphs a micro trend to a concrete macro movement.

Businesses are clearly all competing for the best young talent. But let’s not characterise it as a war. Because war creates a sense of increased pressure that can lead to bad decision-making – and an often-panicked hiring strategy.

And then what happens when times get more difficult as they are now?

That’s when we usually flip from the hire, hire, hire side of the coin to the fire, fire, fire one. And young talent is usually at the sharpest end of this.

Two experiences in my early career taught me vital lessons about how to negotiate difficult times.

The first was doing recruitment for the Central Electricity Generating Board in the 1980s. When it was broken up, many of its specialists were made redundant and moved into other industries. When demand returned again, there was a void of talent.

The second was when I was asked to hire people into the IT functions at the forklift truck manufacturer Lansing Bagnall, which had just been acquired by the German company Linde AG in 1989.

It wasn’t a good time economically. UK manufacturing was depleted, and Lansing Bagnall’s order book was worryingly empty. But the new management didn’t follow accepted British wisdom and cut to save costs.

In fact, they brought me – as well as redeploying much of the existing workforce to modernise and streamline their manufacturing processes.

When better times returned – as they always do – Lansing Linde was in a far more competitive position, able to quickly response to increased demand with a better product offering. Instead of contracting during the difficult times, they pivoted, strengthened and future proofed their business.

It taught me that so much of what we think of as ‘fact’ is actually culturally determined. The Germans had an entirely different view on how to respond to downturns. And yet even all these years later, many British industries are sticking to the bad old ways.

The airline industry has suffered huge reputational damage after firing during the pandemic – and being left completely unable to properly redeliver when demand increased.

I’d argue that Warren Buffet – who once famously said, “Only when the tide goes out, do you see who’s been swimming naked” – should have included the tide is coming in as well. Fail to prepare for the eventual upturn at your peril.

So how do we create this kind of culture shift? Because make no mistake – that’s what it is. What I’m talking about is a move away from businesses being led by a short-term, one-dimensional, sense of the bottom line to a longer, more expansive, view of their profits and processes.

We are increasingly understanding of the critical importance of the human element to a business. It’s no longer simply about hitting targets. We have a far more nuanced understanding these days of the impact our people have. We are more accepting too of our environmental considerations.

But we must start to interweave our financial strategies for economic downturns with a vital people element too. We must recognise the critical need to protect and develop a workforce even in the leanest times.

Who best to argue this? HR leaders. 

Currently, however, HR has very limited representation at the top of corporate life with limited opportunity to input strategically at board level. All too often, HR is used as a reactive tool to grow or shrink a workforce depending on the economic climate.

Or do they?

Those of us in senior management are hearing a lot of this kind of thing right now.

And it’s certainly true that the fundamental dynamic in the employer/employee relationship has shifted unrecognisably during our working lives.

But it’s time to put the scepticism to bed.

Because only by understanding and embracing the world that younger people are now living in, will we attract them to jobs with our businesses and, crucially, retain them.

The good news is that you don’t need to have ‘campuses’ or be a tech start-up to attract emerging talent.

And for Gen Z the alignment between their values, the changes they want to see in the world and how the company they work for not only reflects these values, but embodies them too, is critical.

This is not a trend. It’s a fundamental shift in the forces shaping business today and into the future. And while purpose is one of many factors in recruitment, as salary still drives choice, what we see it that it is critical to retention.

According to the Deloitte Global Gen Z and Millennial survey, nearly two in five (37% of Gen Zs and 36% of millennials) say they have rejected a job and/or assignment based on their personal ethics. Nearly half (46%) of Gen Zs and millennials in senior positions have rejected a job and/or assignment based on their personal ethics.

Purpose is lived not laminated

But what exactly is purpose? You have a sustainability strategy. You’ve posted a statement on your website. That’s it right?

Sorry but no. Value statements are a blunt tool. Your mission and vision are often more abstract concepts. Purpose is a far sharper and more strategic way of transforming your thinking into behaviours and sets a higher agenda to align your organisation behind.

Purpose helps guide decision making throughout businesses with the aim of having a positive impact on the world as well as your bottom line.

And it matters to employees. The most critical aspect of retention is ensuring that employees feel you live up to your purpose promise. This matters whether you are 20 or 60. It’s a living, breathing set of every day micro actions that create a vital sense of trust in your business.

We recently did some research with YouGov that showed 69% of employees at large companies felt the organisation’s expressed purpose was conflicted, or only partially aligned, with their day-to-day experience. This is a retention problem waiting to happen.

But delivering against a purpose-led agenda isn’t easy. Right now, many businesses are still in the foothills of this change. And when people like Yvon Chouinard are signing away billion-dollar businesses to make ‘Earth [Patagonia’s] only shareholder’, it can feel daunting.

But there are concrete ways in which all organisations can close the gap between what they say and what they do.

Setting a new agenda

First, a shift is required to fully embrace the commitment not just to your employees, but a much broader stakeholder base about how you’re going to behave and who your business is set up to serve. This means thinking about your business not just as an engine for profit, but also a force for good.

A key challenge facing many is that ownership of the purpose agenda has until now often been adopted by one section of the business, usually marketing. Brand purpose (important distinction) is being used as a way to drive awareness of a company, but not create operational change or meaningful impact.

If you are going to truly embody purpose, its articulation, design and delivery must start at CEO level. It is down to leaders to model purpose in behaviours and decisions. Then they must communicate that and set objectives around it. These are the people your employees will be looking at and thinking – ‘does this match up?’

Making that shift at CEO level starts with embracing the idea that business is about more than financial health. Creating shareholder value can no longer be the sole pursuit of business leaders. Broadening your stakeholder base is a critical element of building more successful purpose driven businesses, but it requires a different way of measuring impact, different forms of governance and new ways of engaging employees.

Co-create your purpose

We recently worked with the John Lewis Partnership for instance. It was one of the first purpose-driven businesses, set up over 100 years ago by a man who created a business structured around his employees, or Partners.

But a century later, John Lewis Partnership recognised that retail – and the needs of their Partners – were rapidly changing. They needed to update their purpose – not just for today, but for the future.

The key ingredient was the co-creation of this updated purpose. It is an approach we use in all purpose projects. For employees to be fully invested in bringing the idea to life, they must be consulted, engaged and bought into the work: what they think, what they value, how the idea should be delivered practically.

Regardless of the size or structure of your organisation, a co-created approach to purpose allows for a diversity of viewpoints, creativity and critically the expertise of those who will be charged with delivering the change.

JLP is a huge organisation, so to ensure meaningful engagement, we created an online platform where views could be expressed, ideas developed and perspectives shared. By doing this we were able to identify what mattered and how Partners saw the opportunity for the future. Then we worked at board and executive level to design and refine an idea that worked specifically for them.

The next stage was about taking an abstract idea and making it real. We worked on operational structures to deliver to, measurement systems, and decision criteria for employees to use to ensure their actions aligned with purpose.

Communications-wise, it was also important to create signature actions the business could take to demonstrate their commitment to their people, and tell effective stories throughout the business because narrative certainly shapes culture.

John Lewis Partnership is now prepared for the future with a co-created, and crystal clear, sense of purpose.

The future of business

Embedding purpose into your business creates a long-term return by de-risking it against inevitable regulation. We also know that purpose drives bottom line success. [High growth brands (10%+ growth annually) are 66% more likely to see purpose as a means to guiding employee decision making (Deloitte).

Externally too, consumers are also becoming increasingly vigilant about buying into businesses that share their values. And in categories with increasing regulation, soon many businesses will be forced into squaring off profits with social and environmental impact.

It might sound like something from a sci-fi film, but it is, in fact, far more of a reality than you we are often led to believe.

The technology at our disposal today has the power to not only revolutionise how we recruit, but also discover new streams of untapped talent.

All we have to do is harness it effectively.

Why? Because the traditional ways of finding new talent are creaking at the seams. After all, there are only so many candidates with top degrees from Russell Group Universities.

And the more we discover about neurodiversity, the more we understand that some highly intelligent and talented individuals might slip through the education system which means there’s a whole pool of as yet untapped talent to be discovered.

Add all this together and it’s clear we must radically change how we recruit in order to truly assess each person’s human and hard skills – if not for now, then certainly for tomorrow. With the rise of AI will come an ever increasing need for what technology cannot do, the human and creative skills that we will need more than ever.

Ironically, technology can assess them for us.

Full disclosure: I’ve got a vested interest in this. The company I founded uses tech to measure what’s inside a person’s head. By doing so, we can break bias by evaluating each person’s human and hard skills regardless of their ethnicity or gender.

But this isn’t just a PR push for my business. It’s a call to arms. As an industry, we must be prepared to embrace the new in a way that hasn’t been done in decades.

We’ve spent years treading the same old paths. We need to find more forward-thinking solutions to enable us to effectively harness people at every stage of their career: from finding the best new recruits, to better deploying them mid-career, and retaining them at the other end to make best use of their accrued skills and knowledge.

Once again, technology can help us do that.

Cognisess started twenty years ago with one question: ‘Is there something other than academic grades we can use to determine an individual’s talent and potential?’

Knowing what academic qualifications someone has is one thing. But recruiting a nurse, for instance, based on academic grades alone doesn’t always ensure the best hire.

Academic grades don’t tell you their true potential in the most critical skills of all for nursing: the ability to communicate, empathize and resolve conflict as well as rapidly adapt to change and maintain the right attitude in a stressful environment.

The early shoots of a radical shift in what people want from work have been there for some time. When Millennials came of age, their older Generation X or Baby Boomer bosses sometimes despaired at their demands, their expectations, their lofty ideals.

But this wasn’t just an intergenerational spat. Millennials laid the seeds of profound change that Generation Z is now propelling forward ever faster.

All the data is telling us this. Research by PwC has shown that 86% of employees prefer to support or work for companies that care about the same issues they do. More than three-quarters will stop buying from companies that treat the environment, employees, or the community poorly. Job fulfilment and the ability to be authentic at work clock in just behind pay considerations among employees considering a job change.

By 2029, Millennials and Generation Z will make up 72% of the world’s workforce. It means a radically more expansive experience at work will no longer be just an attractive extra, but a commercial necessity. And for those of us working in HR, our remit will therefore expand increasingly further than pay, perks and progression.

I’ve experienced this in my role as Chief People Officer at the Yorkshire Building Society where social purpose and sustainability was added to my brief in September 2020.

As a mutual, we have a strong purpose and have always been committed to people and community so there was a synergy around the societal piece and a broader ESG agenda for us. Our work in communities and on our I&D were already part of the people division agenda. It was a logical bridge for us into the arena of sustainability covering everything from the products we offer to the partners we work with.

Taking it on was certainly a personal learning curve. To prep for the role, I did some training at Oxford University and the data was more sobering than I could ever have anticipated. But they’ve also fuelled my passion for this work and the role business must play in finding solutions to these huge societal and environmental challenges.

It’s never been more critical. Sustainability is fundamental to our business model – on a practical, financial, and ethical level – and the younger generations we are looking to recruit know they are at the sharpest point of impact for all this.

They are inheriting a working world with significant social inequality and climate challenges that will need to be tackled in their employment lifetime – and these considerations are now forming a key part of their decision-making process about who to work for, and how long.

More than 50% of Gen Z who are dissatisfied with their organization’s societal impact, progress on diversity and commitment to sustainability would like to leave their job within two years.

But be warned: this isn’t time for headline-grabbing generalisations about your positive impact. Emerging talent is more discerning than ever about what you say – and what you do. They will research, evidence your claims via external agencies and call you out if you are not doing what you say. Their skepticism however will drive our collective accountability.

The reason I ask this is because for all the focus on the challenges diverse communities face us right now, it feels to me as if many people are treading the same old paths to trying to connect with emerging talent.

Milk rounds, graduate schemes, Russell Group universities, they all certainly have a part to play in finding accomplished young people. But I believe there is a talent pool that goes largely unseen and overlooked – and truly embracing the notion of socioeconomic diversity is the way to tap into it.

Right now, race is at the forefront and is often an uncomfortable topic. It’s forcing us to examine the inequalities in the world around us, the limits of our own thinking and the complex challenge of how to pay more than just lip service in this crucial area.

On one hand, progress is being made. We are moving for instance beyond a broad brush categorisation of BAME to a more nuanced picture of the disparities between the challenges facing employees of Asian and those of the black community. On the other, we still do not have a single black CEO of a FTSE 100 company.

Gender meanwhile is more embedded into our thinking. We’re certainly doing better on this. But women still only have 31.5% of leadership roles in the FTSE 350. It’s not exactly a level playing field yet is it?

But what is far less discussed is the impact of socioeconomic class, not only in the workplace but in wider society. I would argue that this missing tier is the crucial missing part of the jigsaw, the element that will allow us to unlock a truly three-dimensional approach to creating equity in the workforce.

In many ways I am an anomaly. A female senior leader. A black female senior leader. And, critically, someone from a socio economically deprived background.

I grew up in Bermondsey and was living independently by the age of 15. A year later, I’d started work. Eighteen years on, I don’t know many people like me working at a senior level in financial services.

What’s changed is that I can now talk about all this. For a long time, I needed to code switch and downplay experiences. Now I have learned just how powerful it is to be my full self. But there are many young people for whom this is not yet possible and we must find ways to reach them if we are to tap in to what they have to offer.

It starts with how we assess emerging talent by expanding our thinking into a more holistic approach. It’s time to acknowledge that a young person who’s grown up with a single parent working long hours and leaving them to self-start when it came to homework, perhaps cared for younger siblings, or experienced poverty might have ‘lesser’ qualifications but a set of skills that are vital in the workplace.

Then there is the impact of growing up in areas where there is little aspiration. The role of early mentors cannot be underestimated. I got my first job because I had the core GCSEs – as a result of my head teacher focusing me on my studies.

We can’t romanticise socio economic disadvantage. But resilience, passion and a relentless energy for moving upwards are just some of the qualities that many of those who’ve experienced it have forged into them. They have to fight in ways that young people from more economically advantaged backgrounds do not. It gives them valuable skills that we as employers can enter into a productive exchange with.

Then there is what I call the ‘gratitude gap’. I know from personal experience that being given opportunities creates an emotional connection with your organisation that builds loyalty, energy and motivation.

Social mobility however isn’t one quick fix. We hear a lot about the struggles that white young schoolboys from socio economically deprived backgrounds face in education. But the data shows us that these barriers are not translating into the workplace. The statistics tell us they are still able to progress at work. Black boys meanwhile are succeeding at school but finding themselves stymied in the workplace.

So socio economic mobility can’t be seen as a one hit solution to creating true equity. But it should be a crucial consideration in the practices and policies put in place to realise it.

If only it were that easy.

Everyone – from large businesses to start-ups – is aware of the current complexity in attracting and retaining emerging talent.

It’s something we think a lot about at Sanderson Solutions – and we could easily get snared in myriad details.

But I believe the core truth of what is driving the talent crisis should also be the constant touch point we use to identify solutions.

For example, if there are more jobs and less people to do them, the traditional power dynamic that many of us are familiar with has been reversed.

It’s no longer a question of businesses giving jobs to willing candidates queuing up for them. It’s about willing candidates deciding to choose businesses to be their employers.

And it’s that essential truth that must inform every decision and strategy we implement going forward.

Those entering the job market today do so with a very different set of experiences than older generations.

Macro trends – from the rise of globalisation and consumerism to more recent events like Covid and Brexit – have informed their expectations that now extend far beyond salary.

Some want to work from home, others want break out areas with snugs and pool tables in the office. Most expect mental health support, social opportunities and a fine balance between autonomy and mentorship.

All this goes far beyond pay cheque – and emerging talent wants to know how you approach all of the above before they decide to work for you.

Now though, many employers are focusing purely on the shortage of people and see the solution as a race.

If it’s no longer a question of young people competing for one job offer but weighing up the pros and cons of multiple opportunities, then surely the answer is to speed up recruitment processes and be the first past the post in making offers?

Not necessarily. This approach doesn’t always translate to winning the candidate.

The talk in recruitment right now is all about the war on talent. But there is one key area we’re curiously silent on – the fundamental generational disconnect in how we are looking to attract talent in the future. It’s time to accept the old ways of doing things are no longer fit for purpose. We must radically rethink both our attitudes and approaches. At universities nationwide this year, student engagement with employers has dropped. In a world of digital seminars, young people haven’t logged on in the way employers have come to expect in the drive to attract fresh blood. Exhausted by a pandemic and busy with study they’ve often had to negotiate alone, young people have been hard to reach. Many are also putting off career decisions until after they’ve crossed the degree finish line.

Drop in economic prosperity

But this isn’t just another Covid quirk. Underpinning this trend are the far deeper currents governing how young people now live their lives – and it’s these that companies, however large or small, must better adapt to. Too often, the talk in recruitment centres on the younger generation coming into business. But let’s start instead with those at the top of it – Baby Boomer or Generation X leaders who came of age without social media, the luxury of realistic house prices and an acceptance of anything from paternalistic to exploitative corporate culture. Put simply? We are now anachronisms when it comes to attracting future talent. And we must start to meaningfully empathise with the vastly different realities that young people are now coming of age with. Practically, they have more career choices than ever before. It’s a huge opportunity for them. But it’s also overwhelming. Financially, they are aware that the Millennials who came before them are the first generation to experience a drop in economic prosperity.

A sharp lesson

Psychologically, they can no longer live in blissful ignorance of the progression, promotions and pay rises of their peers thanks to social media. Add in the sharp lesson, at a relatively young age, about just how fragile what we’ve long taken for granted can be and it’s a perfect storm that employers must now skillfully navigate. We can start by acknowledging a fundamental psychological shift in the emerging talent we are trying to recruit. Just as Maslow said, there is a Hierarchy of Needs that motivates them. But, with rising food costs and energy prices, stagnant wages and ever-rising house prices, those entering the workforce today are facing a far more complex dance to meet even the most basic of needs.

All this certainly makes them willing to be more demanding of employers than ever before. But it is a misnomer to say that Generation Z is entitled.

Punishing landscape

They aspire to what older generations did – namely, security, lifestyle, home ownership and job satisfaction. But amid the punishing landscape they must now negotiate, they are understandably more bullish in their salary expectations and prepared to move jobs to achieve them. They’ve also come of age in a culture that is far more questioning about what motivates companies – and their leaders. Many young people have the sense that neither really cares about them. Gone are the days when those entering the workforce felt they had found an employer that would guide them parentally through life. They are consequently more individualistic about realising their aspirations. But still the attitude persists that talent is a resource – not an asset. And this manifests itself in a thousand tiny details – the expectation that graduate employees will stay for years and a sense of grievance when they don’t, or a distinct lack of curiosity about what drives the very people we’re trying to attract.

Investing in tomorrow’s talent

It’s crucial that companies focus on the time and effort they are investing in tomorrow’s talent. Increasing links with young people in local communities is key. Recruitment tomorrow is about laying the groundwork for long-term relationships today. To be an attractive employer to diverse talent, you need to demonstrate why young people would want to work for you and this starts with relationship building at a far earlier point in their lives. Greater focus is also needed at the early stages of careers. Those moving into the workforce are experiencing a far more rapid rate of change now than ever before. Technology is ever-relentless, the pandemic has radically shifted the practical ways in which many work – from physical spaces to a variety of hybrid working models.

But still we expect new recruits to hit the ground running. They’re young, they can do it surely? Well no. They need more support.