Signaling Environmental, Social, and Governance Values: ESG Practices and Moral Identity in Attracting Generation Z Prospective Employees

Abstract

As Generation Z (Gen Z), characterized by their pronounced ethical awareness and strong sense of social responsibility, increasingly comprises a significant segment of the workforce, corporate entities are strategically adapting their environmental, social, and governance (ESG) practices to optimize employee recruitment and retention. This study examines the relationship between Gen Z prospective employees' moral identity and the ESG practices of companies in influencing perceptions of job attractiveness. A between-subjects experimental design was employed, developing three conditions (i.e., environmental, social, and governance practices) that focused on sustainable practices in retail companies. To test the main and interaction effects of ESG practices on perceived job attractiveness, a two-way MANOVA was conducted. The study found that individuals with high levels of both internalized and symbolized moral identity are particularly drawn to companies that demonstrate strong ESG performance, as perceived by job attractiveness. By applying signaling theory to the context of moral identity and ESG practices, this study extends its theoretical scope and offers novel insights into Gen Z's job selection criteria. The findings underscore the necessity for companies to develop tailored ESG strategies that appeal to a diverse range of Gen Z prospective employees, ensuring alignment with their ethical values and career expectations.