Executive Summary
The phrase “What a difference a year makes” was never truer than in 2020. A year ago, The Conference Board published its first report on the topic of how organizations manage social change, Higher Expectations: How Organizations Engage With Social Change Issues. We highlighted the fact that organizations are now being judged on the quality of their relationships with customers, employees, owners, and communities while being expected to play a role in social change conversations. These higher expectations accentuated organizations that were purpose-driven, as well as profitable.
In November 2019, the COVID-19 pandemic hit, and as it spread globally, a domino effect ensued that demonstrated weaknesses in health care systems (national and private) which cracked under the pressure of managing the magnitude of serious and fatal cases. The shock of the pandemic and shutdown measures plunged the global economy into a severe contraction, as millions lost their jobs to furloughs and layoffs. Remote work became the norm wherever possible due to government-mandated lockdowns. In addition, shortages of food and basic necessities due to supply chain disruptions caused widespread panic. Schools and facilities for childcare, seniors, and other dependents closed, creating new, 24/7 responsibilities for many employees.
In the midst of these social crises, on May 25, 2020, George Floyd was killed while in police custody in Minneapolis, Minnesota, US. Extensive protests erupted in the US and globally, from New York to Tokyo,2 which criticized police brutality and racism against Black people. The protests did strike a chord with many organizations and prompted or required a response.
Given the new realities of 2020, The Conference Board decided to repeat its 2019 survey to see whether organizations are responding differently to social change issues and whether employees think differently about how organizations should respond. In this study, we investigated 16 human capital-related social change issues. To ensure that we measured various facets of this topic, we combined a short online survey with nearly 850 global respondents (with 43 percent outside North America) with a literature review.
This report sheds light on changes around the globe in employee sentiment and in how organizations are rising to the challenge of meeting new expectations for business.
The Conference Board defines an organizational response to social change issues as:
The use of an organization’s leadership, brand, and resources to respond, internally and/or externally, to changing cultural and social norms.
Insights for What’s Ahead
- As stakeholder expectations increase, responding to social change issues is an opportunity for organizations to improve employee and customer engagement, and ultimately profitability. It is well known that both employee and customer engagement improve profitability, and our survey found that employees emphatically want their organizations to respond to social change. Specifically, we found that 99 percent of respondents believe that organizations should respond to social change issues at least some of the time (72 percent of survey respondents believe unequivocally that organizations should respond, and 27 percent believe organizations should respond “sometimes”).
- Organizations that respond specifically to issues of equity in race, gender, and sexual orientation help promote a deeper culture of inclusion. Workplace inclusion is positively correlated with employee engagement and occurs when employees feel respected and valued for being who they are, trust that they can speak up, share a sense of belonging, and can expect to be treated fairly. Over three-quarters of surveyed organizations in Europe and North America have responded to “racism” in the past year. Over half of organizations surveyed in all regions have responded to “gender inequity.” Many organizations in North America, Asia-Pacific, and Europe have also responded to “LGBTQ+ inequity.”
- If an organization chooses to respond publicly, it should do so quickly and mindfully, or risk being seen as inauthentic. Over 10 percent of our respondents reported feeling uncomfortable with an organizational response to a social change issue. Many respondents wanted their organizations to respond more quickly or more thoroughly with action or ongoing support. Others believed that their organization seemed to respond to issues solely to improve their reputation.
- Making a public response is only half the equation. Taking action internally demonstrates a committed response to employee concerns and builds inclusion and engagement. Many employees believe organizations should first take action internally to address many social change issues. While respondents told us that they appreciated the organization taking a public stance when appropriate, they most often felt that issues should be addressed internally. Respondents cited actions such as starting a task force, involving employee groups, opening dialogue and discussions, and offering a wider variety of benefits as ways their organization responded internally to social change issues.
- To be responsive to employee concerns, organizations should proactively monitor the social change issues that matter the most to employees in their region. While “racism” and “gender inequity” were first and second in most regions, “unemployment” is the most important social change issue in Asia-Pacific. In North America, “unequal access to health care and well-being” is more highly ranked, perhaps reflecting perceptions about the health care system in the US. Organizations should engage their local teams and stakeholders to help respond in a way that is meaningful in each cultural context.
- Organizations should be agile in their response and be sensitive to the fact that concerns may differ amongst various demographic groups. Understanding these differences may help organizations take appropriate action internally, by, for example, involving representatives of different demographic groups to participate in developing a plan of action. In our survey, women were more likely to raise concerns about “gender inequity” than were men, who were more likely to rank “unemployment” as a top critical issue. In addition, older workers were more likely to raise concerns about “nationalism “and “ageism,” while younger workers instead valued increased responsiveness around “unequal access to health care and well-being” and “benefit inequity.”
