It’s true: Today’s employees want more. The challenge for HR leaders and managers is that the aspirations of today’s employees are not necessarily traditional ones.

Employers can’t simply throw money at workers in the form of bigger paychecks–that didn’t work out well for the Big Tech companies–and still expect to compete for talent with others in their industry. C-suite leaders and managers need to be more thoughtful, creative and intentional, because the current demands of the workforce, writ large, are far more abstract than dollar sums. 

Among other intangibles, employees want better work-life boundaries and exhibitions of trust in them to get the job done without micromanagement. Perhaps above all, a new study shows that when people go to work, they want to feel a sense of purpose. And that kind of emotional connection can boost not only their commitment but their performance as well.

The report comes from Benevity, builders of a leading employee-engagement platform. Among its most compelling data, the study found that companies see 52% lower turnover among newer employees when they participate in “purpose programs,” which include charitable giving, volunteering, and other positive actions. 

“There’s a clear link between corporate purpose and employee retention,” said Janelle St. Omer, VP of impact and inclusion at Benevity. “For both the corporate social responsibility (CSR) practice and HR leaders, this is a really tangible solution for them, showing the value of their investments in their social-impact programs, particularly in highly competitive industries that are always looking for talent. They’re not just a nice-to-have; they’re actually a strategic lever for your business and should be a part of your talent-retention strategy.”

This link between purpose and retention is strengthened especially in the first two and a half years that employees work for a company. And such an approach to retention translates across regions. Reduction in turnover among employees with a tenure of 2.5 years or less who participate in purpose programs scored 51% in North America, with similar results in Europe, the Middle East, and Africa. The figure was just one percentage point lower in Benevity companies located in the Asia-Pacific area.

Multiple industries see even higher retention than the 52% average. In retail, there’s 60% lower turnover among those employees who engage in purpose programs during the first 2.5 years of their tenure, while some industries scored lower, including finance (42%) and media and internet companies (35%).

“The impact a purpose program can have on improving a company’s bottom line, by reducing employee churn, cannot be underestimated,” said the Benevity report. “The cost of replacing an entry-level employee is estimated to be around 30% to 50% of their annual salary. Go up a few levels, and you’re looking at 150% for mid-level employees and 400% for seasoned and specialized team members.”

There’s also team cohesion, morale and productivity to consider. All are negatively affected while teammates and adjacent workers “try to fill the gaps” that are opened up when a worker leaves, the report said. 

Of course, that has occurred en masse over the last two years.  “A lot of folks were really missing that connection and that sense of purpose in their day-to-day,” St. Omer observed while reflecting on the Great Resignation, which partly inspired the Benevity study. “They were really thinking about how their values aligned with the employers they were working with and, coming out of Covid, how much being true to yourself and your values really matters.”

Boosting Involvement in Purpose Programs

Given all the potential impact that purpose programs can have on newer employees, it’s alarming that, according to the Benevity study, those lesser-tenured workers engage in such programs at a lower rate than others who’ve been with their companies longer. Employees who have been with the same company for less than two years have a purpose-program participation rate of just 6%, compared to 20% for employees who have been with their company across a longer period. 

Reasons for this disparity, Benevity’s report said, include the possibility that newer workers have fewer social connections than longer-tenured ones, so they might not simply be aware that the company’s purpose programs exist. The recent rise in remote work could also be to blame.

“With Benevity data showing that 40% of employees in our client community have been at their company for one year or less, or they’re newly enrolled in their corporate purpose program, it’s clear companies must shift their approach to these programs to deliver on what new employees are looking for,” Benevity said in its report. “Simply having a program isn’t enough.”

The Benevity study arrives from inside its company incubator and resource hub, Impact Labs. The study’s leaders analyzed data from more than 10.6 million users of the Benevity platform at more than 400 companies that have maintained their accounts for a minimum of 14 months. The companies allowed each user to participate in giving, volunteering and/or micro-actions (also called “Missions”) for a full one-year cycle. Benevity also examined employees with varying levels of tenure and completed its analysis in August 2022.

Benevity Impact Labs was formed as a “social innovation lab to help more companies around the world accelerate their impact and inclusion through data insights, innovation and community,” said Sona Khosla, Benevity’s chief impact officer. “Our hope is that this will catalyze an even bigger global movement of purpose-driven businesses to act on solving the world’s biggest challenges in a way that engages employees more meaningfully in their work.”

In terms of the Benevity report specifically, Khosla says she hopes conscientious companies who read it will “raise purpose on the investment list for HR executives.” 

“There are few programs and investments that have the potential to deliver such high returns,” she added. “Considering how many companies have a significant portion of their workforce who are new to the company in the last two years, it shows the power of purpose in helping to retain new talent and building a culture that will be more resonant for an increasingly purpose-driven talent market.”

Practical Advice for Infusing Purpose From the Beginning

The Benevity report does go beyond facts, figures and research, providing steps that organizations can take to integrate the company’s sense of purpose into its workplace culture. 

“Infuse your purpose into your employee onboarding,” St. Omer said, summarizing the first step outlined in the report. “Don’t just mention it. Seek to provide donation currency or a link to your site where they can make a donation, or encourage a volunteer opportunity out of the gate. Give them a real sense that giving back is part of the company culture and invite them to participate so that it becomes part of their employee experience.”

Organizations shouldn’t be shy about sharing the details of their impact. There’s a way to openly express pride in philanthropic work without making it sound too self-congratulatory. Doing so effectively will help inspire workers to participate. 

“Communicate your company’s contribution and your commitment,” St. Omer said. “Always letting your employees know, either through storytelling or at all-hands meetings or any of your written communication–internal or external–demonstrates that your leaders and your company values purpose. There should be advocates of the purpose programming.”

Benevity also suggests “activating middle managers” to “champion social impact activities.” Not only should newer employees be targeted with such messaging, but also younger ones. Millennials and Gen Zers care more about purpose than other generations do, the Benevity study pointed out, and “they are quick to move on when they don’t find it in their workplace.” The data is quite convincing of this: More than half of Gen Zers say it’s very important for their work to have meaning, and 71% in one study said they would even take a pay cut to “do more meaningful work.” In considering the long-term sustainability of a workforce already in place, a sense of purpose, so coveted by young workers, has to be cultivated among them. 

Organizational leaders should also, according to the report, “tap into and support affinity groups,” or ERGs, which “are a powerful driver for connection, as many people who join a new workplace want to find ‘their people’ and get involved.” Showcasing and amplifying the work those groups do will give those employees a better sense of belonging, which will help build a sense of community and impact. It will also go a long way in supporting diversity, equity, and inclusion (DEI). 

“If you have your LGBTQ+ employees getting involved in other organizations that support that community, or your Hispanic employee network finding ways to support their community through volunteering or working at nonprofits or mentoring programs, that will help connect your ERGs to your DEI programming as well,” St. Omer said.

This communication should be done year round, Benevity advised in the report, and technology can help. An online hub for all of these groups will make connectivity, messaging and amplification easier. More broadly, companies should ensure they’re including remote workers in the programming by building a mobile app, or even a mobile computer station for device-less employees, to reach them.

The most eager of companies that want to nurture employee sense of purpose can go one step further. Benevity said in its report that organizations should even engage workers in corporate grant-giving. According to additional company research on stakeholder philanthropy, employees want to have a say in how their company directs corporate funds and grants. The formation of employee selection committees to help in that area is an effective way to create a channel through which they can provide their guidance.

“People are looking for companies to do good, to make an impact and to show up in moments that matter,” St. Omer said. “They’re also looking for companies to inspire them to get them to contribute as well.”

Editor’s note: From Day One thanks our partner, Benevity, who supported this sponsor spotlight.

Michael Stahl is a New York City-based freelance journalist, writer, and editor. You can read more of his work at MichaelStahlWrites.com, follow him on Twitter @MichaelRStahl, and order his first book, the autobiography of Major League Baseball pitcher Bartolo Colón, at Abrams Books.